New Tariffs Could Threaten Oil Production in Oklahoma

President Trump recently announced he is going forward with his plan to apply tariffs on imported steel and aluminum—25 percent and 10 percent, respectively. When he announced his initial plan in March, U.S. allies Canada, Mexico, and the European Union were to be exempt, but the most recent announcement includes all three.

The plan has been met with opposition by industries that rely on aluminum and steel, namely the oil and natural gas industries. Oil and gas will be greatly affected by these tariffs, in turn affecting the oil workers of Oklahoma. American Petroleum Institute CEO Jack Gerard said “Increased prices in specialty steel could threaten the continued domestic production of oil and natural gas and natural gas liquids — which are at their highest levels of production since 1949 — and could raise energy costs for U.S. businesses and consumers, while threatening the nation’s ability to achieve President Trump’s goal of energy dominance.”

He also pointed out that these tariffs could disrupt the industry’s supply chain and compromise current and future energy projects.

Potential effect on pipeline companies and employees

Many people in Oklahoma City and throughout Oklahoma are employed by pipeline companies, building and implementing the pipelines that bring us our natural gas and oil. While these tariffs will affect many parts of the industry, pipeline companies may feel it the most, as they use large amounts of steel in the construction of pipelines, storage tanks, valves, and other parts of the pipeline infrastructure.

Dan Eberhart told Fortune back in April that when the tariff plan was first announced, his oilfield services company saw an almost immediate 20% increase in the cost of steel. He worries about his employees, writing, “The economic consequences of a trade war are a real threat to our employees just as they were starting to see the benefits of the president’s other policies. Higher supply costs could force us to lay off as much as 17% of Canary’s staff of 300 employees.”

At a time when oil field services are already rising, President Trump’s tariff will be yet another additional cost. Over the past few years, service companies had been accepting lower price margins as the oil and gas industries recovered from a deep downturn. The oil industry has recently been recovering and looking more positive, but the new tariff plan could reverse that for American workers.

Don Santa, CEO of the Interstate Natural Gas Association of America, also spoke out on the tariffs, calling them “very troubling.”

“National security depends on pipelines to deliver the energy America needs to heat homes and fuel businesses, power plants and manufacturing,” Santa said. “The large-diameter, thick-walled steel used to construct natural gas transmission pipelines is a niche product with unique technical specifications. Federal safety requirements and industry standards require steel specifications beyond those commonly used in markets such as automobiles or building materials. Pipelines require specialty steel products not always available in sufficient quantities and specifications from domestic manufacturers. For certain steel products used in pipelines, no domestic product is available today.”

As Mr. Eberhart pointed out, if oilfield companies are forced to lay off workers, remaining employees may find themselves picking up the extra work. This can cause employees to become overworked and fatigued, leading to accidents and injury.

As an oil field worker, your safety on the job should never be compromised. The oil field injury lawyers at Cunningham & Mears are here to talk to you about your accident and your legal options. Our priority is protecting the workers of Oklahoma City. For a free consultation at our offices, call 405-232-1212 or fill out our contact form today.