The Briefing Room
General Category => Economy/Business => Topic started by: ABX on July 17, 2018, 04:20:02 pm
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So much for helping US oil companies.
The U.S. Commerce Department has denied what appears to have been the first request by a pipeline company to be exempted from the Trump administration’s 25% tariff on imported steel pipe.
The denial of the request by Plains All American Pipeline LP, disclosed in a regulatory filing, indicates that pipeline companies, several of which have sought similar exemptions, may soon face increased materials costs.....
https://www.wsj.com/articles/trump-administration-denies-pipeline-company-tariff-exemption-1531789351 (https://www.wsj.com/articles/trump-administration-denies-pipeline-company-tariff-exemption-1531789351)
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So much for helping US oil companies.
Not an oil company, but a pipeline company.
You have some background saying he was committed to assisting pipeline or oil companies while he was protecting our local steel manufacturers from foreigners dumping steel here?
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Not an oil company, but a pipeline company.
You have some background saying he was committed to assisting pipeline or oil companies while he was protecting our local steel manufacturers from foreigners dumping steel here?
Do you think oil companies don't benefit from the cheaper cost of transporting their oil through more pipelines versus trucking and rail?
Only three steel mills in the world could produce the material it needs, and none are in the U.S. Plains says it will still build the $1.2B, 550-mile pipeline from the Permian Basin to the Texas Gulf coast with steel from Greece, but calla the rejection “unjust†because it had ordered the steel last year, prior to the tariff decision.
https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff
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Not an oil company, but a pipeline company.
You have some background saying he was committed to assisting pipeline or oil companies while he was protecting our local steel manufacturers from foreigners dumping steel here?
Pipeline companies transport oil. They are part of the oil industry. And currently US Steel Pipe manufacturers don't meet tolerance thresholds required by high pressure pipes. Currently no US manufacturers make the pipe they need.
I don't want the President to protect any private US business, he should be butting out completely and let these companies source the best products for the dollar that meets their needs they can get. It should be up to the pipeline company if they buy from the US, Canada, or whomever (with the very few exceptions of enemy countries we have trade restrictions on).
Trump is acting like Woodrow Wilson with all these tariffs and attempts to central plan how private business operate.
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Trump got tired of our slanted trade deals.
The people that are responsible for these deals only have have self interest in mind.
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Trump got tired of our slanted trade deals.
The people that are responsible for these deals only have have self interest in mind.
There has never been, nor will there ever be "Free Trade". If anything, the goal of Trump's actions is to get other markets to open up to US goods. If they do that, the tariffs go away.
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There has never been, nor will there ever be "Free Trade". If anything, the goal of Trump's actions is to get other markets to open up to US goods. If they do that, the tariffs go away.
It shouldn't be his business. Constitutionally this power was supposed to be very limited and requires Congressional approval (Article 2, Section 2 regarding treaties & Article 1 Section 8 regarding Tariffs & Taxes). At that, all of these tariffs have not gone through Congress at all.
But the bigger picture is if this should be the role of the federal government in the first place. should they be making things 'fair' or should businesses work within the market they have.
BMW is a great example. Their largest plant is in South Carolina, yet, they will be hit by tariffs two ways due to this- 1. For parts they import to the plant to assemble here. & 2. For reaction tariffs to those as they re-export back to Europe and other nations. Without all of this, they were doing fine and moving more and more work here because they found a way to work within the existing market. Without all of this Wilsonian central planning, they were brining thousands of jobs to the US. Now, they are having to evaluate how much they build here as it costs too much to import the parts they need and then reexport all of this.
It is an unnecessary war that has not passed Constitutional muster.
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So you don't think that protecting certain industries is a matter of National Security?
What if the Japanese were producing our steel in the early 1920s when we were still allies?
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So you don't think that protecting certain industries is a matter of National Security?
What if the Japanese were producing our steel in the early 1920s when we were still allies?
The problem is the former can be made an excuse for almost every industry, and has been an excuse around the world to nationalize industry.
Interesting you brought up the second part because one of the critical factors many on the right point to that triggered events that led to Pearl Harbor was government blocking trade with Japan and not letting our industry work with them when we were allies. FDR and Stimson didn't like Japan's growing influence within the US (some said FDR was even motived by racism but it may be he was playing planner as his family had business dealings with China) and slapped massive tariffs on Japanese goods, blocking off trade between our country and industry.
So FDR's attempt to use tariffs for central planning purposes, choked off Japan leading to one of the fuses that triggered WWII.
Of course, it was in the name of protecting US interests too.
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Pipeline companies transport oil. They are part of the oil industry. And currently US Steel Pipe manufacturers don't meet tolerance thresholds required by high pressure pipes. Currently no US manufacturers make the pipe they need.
I don't want the President to protect any private US business, he should be butting out completely and let these companies source the best products for the dollar that meets their needs they can get. It should be up to the pipeline company if they buy from the US, Canada, or whomever (with the very few exceptions of enemy countries we have trade restrictions on).
Trump is acting like Woodrow Wilson with all these tariffs and attempts to central plan how private business operate.
Well, railroads and trucks transport a lot of oil in this country too.
When most people think of oil companies, they think of those companies engaged with the extraction of oil and gas. Some of these are integrated, meaning they include the midstream and downstream/marketing side of the industry. Google it and see.
Your point would make more sense if you had said oil industry instead of company.
Your comment implied Trump had favoritism toward oil companies, and I asked where the source for that favoritism existed.
And yes, dumping cheap subsidized steel onto this country from foreign entities does threaten our own domestic industry unfairly. It is particularly important that the US retains a viable steel manufacturing industry as a National Security matter. It saved us during the last World War and overwhelmed those who wished to destroy us.
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Well, railroads and trucks transport a lot of oil in this country too.
When most people think of oil companies, they think of those companies engaged with the extraction of oil and gas. Some of these are integrated, meaning they include the midstream and downstream/marketing side of the industry. Google it and see.
Your point would make more sense if you had said oil industry instead of company.
Your comment implied Trump had favoritism toward oil companies, and I asked where the source for that favoritism existed.
And yes, dumping cheap subsidized steel onto this country from foreign entities does threaten our own domestic industry unfairly. It is particularly important that the US retains a viable steel manufacturing industry as a National Security matter. It saved us during the last World War and overwhelmed those who wished to destroy us.
Well, here's the problem.
If you are producing oil, you are going to get some natural gas. How much varies, depending on where you are and what formation, and even where in that reservoir area you may be getting the oil and gas, but no one is hauling raw wellhead gas around on a train or trucking it out. Feeder pipelines are necessary to get the gas to processing facilities and to comply with methane release and flaring regulations in the US, which vary by state, but also have Federal limits imposed.
That wellhead gas is, except where it is the objective, a byproduct of oil production. If you can't get it to a processing facility, the amount of oil will be determined by flaring regulations and the Gas/Oil ratio of the produced fluid. In almost all cases cutting back on the gas produced means cutting production of oil, as they come out of the ground together (the gas actually can help get the oil out).
At a processing plant, the various compounds present in the raw wellhead gas, from helium, Carbon Dioxide, Methane, Water, Ethane, Propane, Normal Butane, Iso-Butane, Pentanes, including isomers, and a host of other volatile organic compounds, and inert gasses, are separated, some are liquefied, and moved out by pipeline, rail, or truck. The most common component is Methane, which we know as Natural Gas, and it is often present in such quantities that the only economical way to move it is by pipeline. While loading and transporting oil by rail has its complexities and, yes, dangers, those complexities would be amplified considerably in having to transport pressurized tank cars full of LNG in unit trains cross country, and the effects of an accident could be even more devastating than the effects of a derailment with a trainload of crude oil. In fact, in consideration of those potential problems, the Feds have issued only one permit to transport LNG (Liquefied Natural Gas by rail, in Alaska. source (http://www.sightline.org/2017/03/07/liquefied-natural-gas-coming-to-a-rail-line-near-you/) Considering the furor over rail accidents involving Crude oil cargoes, the objection to LNG transport would be predictable.
Trucking (aside from local distribution) and even rail transport of processed Natural Gas (mostly Methane), and the Natural Gas Liquids (ethane, propane, butane, isobutane, and others) which are separated from the raw wellhead gas at the processing facility is done by truck and rail, but more popularly, by pipeline.
Safety is a major consideration, but economics factor in, too.
I recall transport costs for crude oil from this area (Williston Basin, Home of the Bakken) were some $5 per barrel higher by rail than they were by pipeline (DAPL, et. al.) and still some half million or more barrels of oil per day leave the region by rail. (last monthly production figures place oil production from North Dakota, alone at 1.25 million barrels of oil per day). For starters, that's 2.5 million dollars a day in transport cost differences, which would be passed on to consumers for just North Dakota and the DAPL. As Texans would gleefully remind me, we're second in State oil production, they lead by a considerable margin.
Any reduction in oil production or natural gas production to comply with State and federal methane emission or flaring restrictions will also cause an increase in prices, because production will have to be reduced. There is a pretty solid correlation between lower production and higher prices. (Need I say it, but there is another correlation between increased energy costs and higher taxes).
If the gas processing plants can't get product to market in an efficient way, that bottleneck will mean they can't process as much gas. Which takes us back to the flaring/gas emissions problem, compliance with Federal and State regulations, and having ultimately, to limit the flaring and emission of Methane and other VOCs by reducing the production of oil.
Pipelines for gas transfer (not gasoline, but wellhead gas and refined, processed gas) have to meet pressure and integrity criteria or you risk having the sort of explosions that make a real mess somewhere, or even in the middle of nowhere, but will definitely cause interruptions in supply. (We are also assured by some that the escape of greenhouse gasses could bring on TEOTWAWKI, but I have my doubts about that).
If you recall, when they were up-armoring Humvees, one of the bottlenecks in the process was the inability to obtain the correct steel to do so. Lesser steel would just not do, and could not stop the fragments from IEDs and other banes of the infantryman's existence from being a real and lethal threat. Some fragments still were, as was a serious hit by an IED, but the reduction was appreciated by our troops, I am sure.
Similarly, if the sort of tubular goods (pipe) needed for high pressure applications isn't available here, either the companies putting in the pipeline use below spec materials and risk disaster, or they go elsewhere and get what they need.
Considering we export Natural Gas, and export oil (helping keep the petro-dollar the exchange currency worldwide, which keeps the greenbacks in your pocket from being worth less than toilet paper given how many were invented in the last decade), having the ability to move the goods out of the Permian Basin, and for that matter, across the country in general, is important to the overall economy, not just West Texas. Of course, increased costs will be passed on, ultimately, to consumers, either in the form of higher prices due to materials costs with tariffs, or lower production because of bottlenecks, which just means higher prices.
Personally, I view such pipelines as critical infrastructure and a matter of National Security.
Energy distribution is vital, whether it be liquid, gas, or swarms of irritated electrons. Considering the Permian Basin represents an unconventional resource which is a game-changer, and currently the most active area in terms of drilling activity and new production in the country, the ability to bring those wells on line and move the produced oil and gas to processing, refining, and market is a priority, not just for Texas, but for the entire nation.
The ability to produce energy in quantities which make export possible will help reduce trade deficits and has the ability to alter the global balance of power. The Soviets/Russians have had Europe in a headlock over natural gas supplies since WWII, and the Far East is seeking energy, often in regions the Japanese sought to control for energy and raw material supplies during WWII. The entire South China Sea friction, from manufactured island bases to conflicting territorial claims is largely over the rights to explore for and exploit offshore oil and gas reserves.
Until such time as those are developed, we have a marketable commodity that can bring the trade imbalances of the past closer to balance.
But we have to be able to deliver the goods.
I might be able to see protectionism if there was a domestic supplier to protect, but in this case, and in the absence of a domestic supplier, it's just another tax on oil and gas.
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goopo
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@Smokin Joe
B R A V O ! ! !
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...I might be able to see protectionism if there was a domestic supplier to protect, but in this case, and in the absence of a domestic supplier, it's just another tax on oil and gas.
:thumbsup:
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So you don't think that protecting certain industries is a matter of National Security?
What if the Japanese were producing our steel in the early 1920s when we were still allies?
I don't think protecting certain industries is vital to national security.
Where in the Constitution does it say that Government has to protect factories?
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And yes, dumping cheap subsidized steel onto this country from foreign entities does threaten our own domestic industry unfairly.
Like they did oil. OPEC was trying to drive out US oil producers who were heavily leveraged.
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Like they did oil. OPEC was trying to drive out US oil producers who were heavily leveraged.
Except that strategy failed. It provided consumers with cheaper product while they spent more than they were taking in. It accelerated the fall of Venezuela.
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I don't think protecting certain industries is vital to national security.
Where in the Constitution does it say that Government has to protect factories?
SECTION. 8.
The Congress shall have Power To lay and collect Taxes,
Duties, Imposts and Excises, to pay the Debts and provide
for the common Defence and general Welfare of the United
States;
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Well, here's the problem.
If you are producing oil, you are going to get some natural gas. How much varies, depending on where you are and what formation, and even where in that reservoir area you may be getting the oil and gas, but no one is hauling raw wellhead gas around on a train or trucking it out. Feeder pipelines are necessary to get the gas to processing facilities and to comply with methane release and flaring regulations in the US, which vary by state, but also have Federal limits imposed.
That wellhead gas is, except where it is the objective, a byproduct of oil production. If you can't get it to a processing facility, the amount of oil will be determined by flaring regulations and the Gas/Oil ratio of the produced fluid. In almost all cases cutting back on the gas produced means cutting production of oil, as they come out of the ground together (the gas actually can help get the oil out).
At a processing plant, the various compounds present in the raw wellhead gas, from helium, Carbon Dioxide, Methane, Water, Ethane, Propane, Normal Butane, Iso-Butane, Pentanes, including isomers, and a host of other volatile organic compounds, and inert gasses, are separated, some are liquefied, and moved out by pipeline, rail, or truck. The most common component is Methane, which we know as Natural Gas, and it is often present in such quantities that the only economical way to move it is by pipeline. While loading and transporting oil by rail has its complexities and, yes, dangers, those complexities would be amplified considerably in having to transport pressurized tank cars full of LNG in unit trains cross country, and the effects of an accident could be even more devastating than the effects of a derailment with a trainload of crude oil. In fact, in consideration of those potential problems, the Feds have issued only one permit to transport LNG (Liquefied Natural Gas by rail, in Alaska. source (http://www.sightline.org/2017/03/07/liquefied-natural-gas-coming-to-a-rail-line-near-you/) Considering the furor over rail accidents involving Crude oil cargoes, the objection to LNG transport would be predictable.
Trucking (aside from local distribution) and even rail transport of processed Natural Gas (mostly Methane), and the Natural Gas Liquids (ethane, propane, butane, isobutane, and others) which are separated from the raw wellhead gas at the processing facility is done by truck and rail, but more popularly, by pipeline.
Safety is a major consideration, but economics factor in, too.
I recall transport costs for crude oil from this area (Williston Basin, Home of the Bakken) were some $5 per barrel higher by rail than they were by pipeline (DAPL, et. al.) and still some half million or more barrels of oil per day leave the region by rail. (last monthly production figures place oil production from North Dakota, alone at 1.25 million barrels of oil per day). For starters, that's 2.5 million dollars a day in transport cost differences, which would be passed on to consumers for just North Dakota and the DAPL. As Texans would gleefully remind me, we're second in State oil production, they lead by a considerable margin.
Any reduction in oil production or natural gas production to comply with State and federal methane emission or flaring restrictions will also cause an increase in prices, because production will have to be reduced. There is a pretty solid correlation between lower production and higher prices. (Need I say it, but there is another correlation between increased energy costs and higher taxes).
If the gas processing plants can't get product to market in an efficient way, that bottleneck will mean they can't process as much gas. Which takes us back to the flaring/gas emissions problem, compliance with Federal and State regulations, and having ultimately, to limit the flaring and emission of Methane and other VOCs by reducing the production of oil.
Pipelines for gas transfer (not gasoline, but wellhead gas and refined, processed gas) have to meet pressure and integrity criteria or you risk having the sort of explosions that make a real mess somewhere, or even in the middle of nowhere, but will definitely cause interruptions in supply. (We are also assured by some that the escape of greenhouse gasses could bring on TEOTWAWKI, but I have my doubts about that).
If you recall, when they were up-armoring Humvees, one of the bottlenecks in the process was the inability to obtain the correct steel to do so. Lesser steel would just not do, and could not stop the fragments from IEDs and other banes of the infantryman's existence from being a real and lethal threat. Some fragments still were, as was a serious hit by an IED, but the reduction was appreciated by our troops, I am sure.
Similarly, if the sort of tubular goods (pipe) needed for high pressure applications isn't available here, either the companies putting in the pipeline use below spec materials and risk disaster, or they go elsewhere and get what they need.
Considering we export Natural Gas, and export oil (helping keep the petro-dollar the exchange currency worldwide, which keeps the greenbacks in your pocket from being worth less than toilet paper given how many were invented in the last decade), having the ability to move the goods out of the Permian Basin, and for that matter, across the country in general, is important to the overall economy, not just West Texas. Of course, increased costs will be passed on, ultimately, to consumers, either in the form of higher prices due to materials costs with tariffs, or lower production because of bottlenecks, which just means higher prices.
Personally, I view such pipelines as critical infrastructure and a matter of National Security.
Energy distribution is vital, whether it be liquid, gas, or swarms of irritated electrons. Considering the Permian Basin represents an unconventional resource which is a game-changer, and currently the most active area in terms of drilling activity and new production in the country, the ability to bring those wells on line and move the produced oil and gas to processing, refining, and market is a priority, not just for Texas, but for the entire nation.
The ability to produce energy in quantities which make export possible will help reduce trade deficits and has the ability to alter the global balance of power. The Soviets/Russians have had Europe in a headlock over natural gas supplies since WWII, and the Far East is seeking energy, often in regions the Japanese sought to control for energy and raw material supplies during WWII. The entire South China Sea friction, from manufactured island bases to conflicting territorial claims is largely over the rights to explore for and exploit offshore oil and gas reserves.
Until such time as those are developed, we have a marketable commodity that can bring the trade imbalances of the past closer to balance.
But we have to be able to deliver the goods.
I might be able to see protectionism if there was a domestic supplier to protect, but in this case, and in the absence of a domestic supplier, it's just another tax on oil and gas.
I'll add that it is very important as a National Security matter that the US retains, in addition to steel and automotive industries, a viable domestic energy industry that includes all facets from upstream to downstream. This was proven to be important during the last World War to the US and for our enemies which did not have that access and went to war to obtain.
As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage? If so, that is some real condemnation on that industry
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SECTION. 8.
The Congress shall have Power To lay and collect Taxes,
Duties, Imposts and Excises, to pay the Debts and provide
for the common Defence and general Welfare of the United
States;
Doesn't mean that we should bailout GM or protect the steel industry cause they failed to compete. Central Planning is not they way to go.
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I'll add that it is very important as a National Security matter that the US retains, in addition to steel and automotive industries, a viable domestic energy industry that includes all facets from upstream to downstream. This was proven to be important during the last World War to the US and for our enemies which did not have that access and went to war to obtain.
As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage? If so, that is some real condemnation on that industry
Absolutely true. There are several pipeline specs that are not manufactured in the country. It was the case in the original article; only three companies worldwide meet the spec and none are in the US.
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As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage? If so, that is some real condemnation on that industry
Yes, the source is cited above. There are only three companies in the world right now that can supply pipeline to the required specifications. I posted an article a long while back about how the US steel industry is still stuck in 1960s practices and specifications, largely in part due to unions blocking technology advancement out of fear of displacing workers.
And it isn't just our steel industry that is in this predicament. Aluminum manufacturing is also being retarded by almost Luddite demands of the unions. They have been so concerned about protecting their monopoly on workers, they have blocked technology advancements to make us competitive for future (which is now as most of this happened in the 70s and 80s).
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Absolutely true. There are several pipeline specs that are not manufactured in the country. It was the case in the original article; only three companies worldwide meet the spec and none are in the US.
You overlooked the word 'potential' here.
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Yes, the source is cited above. There are only three companies in the world right now that can supply pipeline to the required specifications. I posted an article a long while back about how the US steel industry is still stuck in 1960s practices and specifications, largely in part due to unions blocking technology advancement out of fear of displacing workers.
And it isn't just our steel industry that is in this predicament. Aluminum manufacturing is also being retarded by almost Luddite demands of the unions. They have been so concerned about protecting their monopoly on workers, they have blocked technology advancements to make us competitive for future (which is now as most of this happened in the 70s and 80s).
Seems there has been an approach to address this, what with the recent lessening of unions' power in the courts and the election of a President who does not prop them up.
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Doesn't mean that we should bailout GM or protect the steel industry cause they failed to compete. Central Planning is not they way to go.
When it comes to our defense, one must have some central strategy to ensure we remain a viable entity if faced with war, which means we survive or not.
I agree there are better methods than bailing out GM and maybe even some improvements related to how to keep the steel industry vibrant rather than tariffs.
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Seems there has been an approach to address this, what with the recent lessening of unions' power in the courts and the election of a President who does not prop them up.
Which will get you to 1981 levels. The you have to update all the plants and processes (huge capital investment in an area that has low margins), implement the new processes, find buyers at competitive price points that covers these capital investments, and deliver. In the mean time, we have oil companies who need pipe now who can't wait a decade hoping this will happen.
The alternative, get the government out of it and let these businesses source the products and materials in the best, most cost effective fashion they can, be that from Kentucky, Canada, or Greece.
Protecting American industry should not be about government interventionism but just the opposite, protecting the freedom of these businesses to operate in the fashion they need in the markets they are in. If you want to protect American workers, stop this tariff and central planning nonsense.
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Which will get you to 1981 levels. The you have to update all the plants and processes (huge capital investment in an area that has low margins), implement the new processes, find buyers at competitive price points that covers these capital investments, and deliver. In the mean time, we have oil companies who need pipe now who can't wait a decade hoping this will happen.
The alternative, get the government out of it and let these businesses source the products and materials in the best, most cost effective fashion they can, be that from Kentucky, Canada, or Greece.
Protecting American industry should not be about government interventionism but just the opposite, protecting the freedom of these businesses to operate in the fashion they need in the markets they are in. If you want to protect American workers, stop this tariff and central planning nonsense.
Get our own damned house in order and all that will take care of itself!
http://fairtax.org (http://fairtax.org)
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Get our own damned house in order and all that will take care of itself!
http://fairtax.org (http://fairtax.org)
Absolutely. But in the mean time, more taxation, regulation, and protectionism is not the answer.
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You overlooked the word 'potential' here.
Where?
https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff
The Commerce Department says it denied the request because suitable product is available from domestic producers for the company's Cactus II pipeline project; Plains claimed in its application that only three steel mills in the world could produce the material it needs, and none are in the U.S.
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Where?
https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff
The Commerce Department says it denied the request because suitable product is available from domestic producers for the company's Cactus II pipeline project; Plains claimed in its application that only three steel mills in the world could produce the material it needs, and none are in the U.S.
Consider the government regulates flaring, regulates gas emissions, regulates rail transport of natural gas, NGLs, and other VOCs, and can put a tariff on the grade/type of tubulars needed to make a pipeline, I reckon the monopoly here is in the cards held by the government, whose members will promptly point fingers at the industry over any price increases which result from government policy and actions.
The oil company pays the tariff and passes that cost on, OR reduces production and the upstream end slips into the doldrums as the price of oil goes up. :shrug:
One thing about the oil industry, you need what you need, when you need it. Less just isn't less, it;s nothing if it won't do the job.
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I don't have any problems with the steel tariffs. None at all.
So there aren't any steel producers that can make this specialized pipe?
Why the heck not?
Well... because in years past the LACK OF tariffs enabled foreign producers (perhaps subsidized by their governments) to undercut American prices and whatever market we might have had either disappeared or never got started to begin with.
Don't tell me that U.S. Steel producers can't make this stuff because they don't have the ability or capacity. That's b.s.
The technology exists.
Apply it here.
Get the mills up-to-speed.
Roll that pipe.
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Consider the government regulates flaring, regulates gas emissions, regulates rail transport of natural gas, NGLs, and other VOCs, and can put a tariff on the grade/type of tubulars needed to make a pipeline, I reckon the monopoly here is in the cards held by the government, whose members will promptly point fingers at the industry over any price increases which result from government policy and actions.
The oil company pays the tariff and passes that cost on, OR reduces production and the upstream end slips into the doldrums as the price of oil goes up. :shrug:
One thing about the oil industry, you need what you need, when you need it. Less just isn't less, it;s nothing if it won't do the job.
I once worked on an island that had lots of proof of that statement in any direction you looked all made from production tubing that had mostly been fished out of the 31 wells offshore of that Island because it couldn't handle the hostile environment of those wells.
That cheap tubing ultimately cost the consortium that owned those wells many times what they would have spent buying the correct tubing to begin with.
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Don't tell me that U.S. Steel producers can't make this stuff because they don't have the ability or capacity. That's b.s.
The technology exists.
Apply it here.
Get the mills up-to-speed.
Roll that pipe.
@Fishrrman
I can't speak to steel, but I can speak to Forest Products, and what you said is pretty damn wrong...
American Lumber is *GONE* in the Rockies. There used to be 10 mills in my region - five huge ones, and hundreds of jippo mills.... Now there is only the plywood mill.
Even with tariff protections in place, the investment to put all that back - not just the mills, but the labor, the truckers, the cats/skidders/loaders and operators, hundreds of miles of gravel roads long unkept... And all the equipment to do that...
Not only do the money-pockets need long term guarantees (which are not there), but physically getting all that stuff back in place would take five years just to get to a workable disorder... It would take a couple decades to get the northern forests back to trim operations and real profit potential.
And lumber tech is a whole lot easier to do than steel, I bet.
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roamer wrote:
"Not only do the money-pockets need long term guarantees (which are not there), but physically getting all that stuff back in place would take five years just to get to a workable disorder... It would take a couple decades to get the northern forests back to trim operations and real profit potential."
Your argument as to why it can't be done calls to mind similar arguments made by the democrat-communists in recent years that it wasn't worth opening new oil fields because it would take "five years" just to get them going...
So... it TAKES five years.
And then things are up-and-running again.
Do you expect to get such things accomplished in a week, a month, even six of 'em?
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Your argument as to why it can't be done calls to mind similar arguments made by the democrat-communists in recent years that it wasn't worth opening new oil fields because it would take "five years" just to get them going...
So... it TAKES five years.
And then things are up-and-running again.
Do you expect to get such things accomplished in a week, a month, even six of 'em?
@Fishrrman
I ain't saying that... I am saying that without a long term commitment from the feds, NONE of it will happen.
Nobody is going to invest (to the tune of billions) just to have the gates back up and the land sales dry up with the next administration. You'd have to be an idiot to make that bet on 4 or even 8 years. Without it, Tump's tariffs are a waste of time.
The same thing goes with steel mills. who the heck is going to build a state-of-the-art steel mill, to include all the rail and supply side of it, just to have it regulated out of existence in less than a decade?
And, it does nothing at all to effect the short term anyway... The short term is what pipe layers need.
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roamer wrote:
"Not only do the money-pockets need long term guarantees (which are not there), but physically getting all that stuff back in place would take five years just to get to a workable disorder... It would take a couple decades to get the northern forests back to trim operations and real profit potential."
Your argument as to why it can't be done calls to mind similar arguments made by the democrat-communists in recent years that it wasn't worth opening new oil fields because it would take "five years" just to get them going...
So... it TAKES five years.
And then things are up-and-running again.
Do you expect to get such things accomplished in a week, a month, even six of 'em?
In the mean time just tell all those oilfield hands to go home and come back in five years?
That dog won't hunt.
If the mills want to compete, let them gear up and I'm sure the oil/pipeline companies would be more than happy to buy pipe up to spec in the US as soon as the mills can produce it. In the meantime, though, the need is there now. Or we can shut in wells and go back to $5 gas. :shrug:
As we saw with the Obama Administration, the ability to complete a pipeline is a perishable commodity any more.
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Just interlinking related topics.
Permian region natural gas prices fall as production continues to grow
http://www.gopbriefingroom.com/index.php/topic,324986.new.html#new (http://www.gopbriefingroom.com/index.php/topic,324986.new.html#new)
Bakken oil suffered from a $30/bbl 'discount' because of transportation problems, even as drilling costs skyrocketed.
Considering it is similar to WTI, the spread was huge. Increased takeaway capacity since then has all but eliminated that spread.
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Consider the government regulates flaring, regulates gas emissions, regulates rail transport of natural gas, NGLs, and other VOCs, and can put a tariff on the grade/type of tubulars needed to make a pipeline, I reckon the monopoly here is in the cards held by the government, whose members will promptly point fingers at the industry over any price increases which result from government policy and actions.
The oil company pays the tariff and passes that cost on, OR reduces production and the upstream end slips into the doldrums as the price of oil goes up. :shrug:
One thing about the oil industry, you need what you need, when you need it. Less just isn't less, it;s nothing if it won't do the job.
In this one specific case, the terms are even worse. The pipeline company already had the contracts to buy the steel. Already went through contracts to move the oil; prices set, papers signed. Now, before it can be constructed, prices of the steel jumps 25%.
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There are two companies on the US that could potentially scale up for pipe production. Welspun and Tenaris. The problem, Welspun is Indian owned and Tenaris is owned by a Luxembourg parent company. Both companies would be subject to tariffs to bring in machining into the US to scale up US manufacturing for pipeline. They would face issues BMW is having, even though they assemble here, they get parts and supplies from Europe making it not financially viable to bring in those parts. They are hurting US employees by applying tariffs to EU parent companies.
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We can't produce steel anymore with our coal burning antiquated plants. They are so old that they mix the ingredients with a measuring cup.
We have one modern plant in Oregon but they make fence posts.
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Where?
https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff (https://seekingalpha.com/news/3370510-plains-american-denied-request-exclusion-steel-tariff)
The Commerce Department says it denied the request because suitable product is available from domestic producers for the company's Cactus II pipeline project; Plains claimed in its application that only three steel mills in the world could produce the material it needs, and none are in the U.S.
As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage? If so, that is some real condemnation on that industry
http://www.gopbriefingroom.com/index.php/topic,324866.msg1746052.html#msg1746052 (http://www.gopbriefingroom.com/index.php/topic,324866.msg1746052.html#msg1746052)
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As to the last sentence, is it your belief that this country does not have a current or potential domestic steel industry that can supply steel for pipeline usage? If so, that is some real condemnation on that industry
http://www.gopbriefingroom.com/index.php/topic,324866.msg1746052.html#msg1746052 (http://www.gopbriefingroom.com/index.php/topic,324866.msg1746052.html#msg1746052)
Potential sure. But we need more steel based pipelines today. In an environment where the government is selecting winners and losers in the commercial market, I would be reluctant to invest.
There is a reason there is only three manufactures in the world making that particular steel. The global market for the continuous production of it is not big enough to create demand for a couple dozen.
Invest those dollars for a specialized pipe producing company. And easily after the next election, you have no market to sell to for 4 or 8 years. Too much possibilities of government intervention going the other way. The public needs to stand up and not accept this type of selective manipulation in markets, regardless of which party does it.
If tariffs are good, then apply equal tariffs to all goods. Not selectively punishing specific industries while benefiting others.
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Potential sure. But we need more steel based pipelines today. In an environment where the government is selecting winners and losers in the commercial market, I would be reluctant to invest.
There is a reason there is only three manufactures in the world making that particular steel. The global market for the continuous production of it is not big enough to create demand for a couple dozen.
Invest those dollars for a specialized pipe producing company. And easily after the next election, you have no market to sell to for 4 or 8 years. Too much possibilities of government intervention going the other way. The public needs to stand up and not accept this type of selective manipulation in markets, regardless of which party does it.
If tariffs are good, then apply equal tariffs to all goods. Not selectively punishing specific industries while benefiting others.
I will always support selective tariffs on goods that are being dumped into this country by unfair subsidizing, particularly if it is those industries which we require for strategic defense of this country. Example of an industry that do not need subsidy for defense is the sugar industry.
That is a generalization, of course and does not mean I support either union demands for hiking up wages unrealistically nor for tariffs whose express purpose if to solely strengthen domestic industries for profit.
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I will always support selective tariffs on goods that are being dumped into this country by unfair subsidizing, particularly if it is those industries which we require for strategic defense of this country. Example of an industry that do not need subsidy for defense is the sugar industry.
That is a generalization, of course and does not mean I support either union demands for hiking up wages unrealistically nor for tariffs whose express purpose if to solely strengthen domestic industries for profit.
Lest we forget, the tariff is a revenue generation device for government. Protection of specific industrial capabilities is a spinoff, and even an excuse, but in the end the money is a tax, and once funded the Federal Government.