Oil lobby frets over trade war

The nation’s main oil lobbying group is growing increasingly concerned about the impacts to the industry from President TrumpDonald John TrumpPentagon update to missile defense doctrine will explore space-base technologies, lasers to counter threats Giuliani: 'I never said there was no collusion' between the Trump campaign and Russia Former congressmen, RNC members appointed to Trump administration roles MORE’s ongoing trade war.

Mike Sommers, the American Petroleum Institute’s (API) president, said U.S. tariffs on steel and China’s tariffs on liquefied natural gas (LNG) are among the top concerns of oil and gas companies.

“We want this dispute to end quickly,” Sommers told reporters Tuesday in advance of his "State of American Energy" speech, an annual event the oil industry group hosts in an attempt to set the energy policy agenda for the year.

ADVERTISEMENT

“We of course want to ensure that U.S. intellectual property is protected,” Sommer said, nodding to one of Trump’s main justifications for tariffs on China. “But at the same time, we have to do it in a way that doesn’t affect American economic leadership, that is really driven by American energy leadership.”

Sommers told lawmakers, oil executives and lobbyists later at his speech that the trade war threatens to leave a “void” in world gas markets, since China would buy less gas from the United States.

“It’s a void other countries are happy to fill,” he said. “Our position at API is pretty straightforward: fight back against anti-American trade practices. Just do it in ways that don’t undermine America’s economic leadership.”

China last year put a 10 percent tariff on LNG from the U.S., and threatened to increase it to 25 percent.

Also last year, Trump put a 25 percent tariff on imported steel in a bid to protect domestic steelmakers. Sommers said that’s hurting pipeline companies in particular, citing a Plains All-American Pipeline project faced delays and increased costs because of difficulty in buying steel.

“This is a major issue for us. We’re working closely with the administration to clear this matter up,” he told reporters.

Sommers identified “effective” trade policy as one of API’s top lobbying priorities for the coming year, along with less restrictive regulations and expanding infrastructure including pipelines.

After his speech, Sommers hosted a discussion with top oil company executives. They echoed Sommers’s trade worries.

Gretchen Watkins, president of Shell Oil, said trade barriers are especially disruptive if they impact ongoing projects.

“We have been very active and will continue to be very active to show that projects that are in construction and being executed right here in this country need free trade to continue to be successful,” she said.

Susan Dio, president of BP America, said her company works with global supply chains.

“It is important ... that we can actually move products and things across the supply chains very very effectively, and that does impact the investment decisions that we make.”