Texas Gov. Greg Abbott called on U.S. President Trump to consider the negative impact of tariffs on the domestic oil and gas sector. File Photo by Kevin Dietsch/UPI | License Photo
June 29 (UPI) -- A Texas oil and gas trade group applauded the state's governor for calling on President Donald Trump to consider the negative industry impacts of tariffs.
"To maintain our energy dominance and continue meeting the energy needs of our nation and beyond, we need to be able to move unprecedented volumes of oil and natural gas to Texas refining complexes and the Gulf coast," Todd Staples, president of the Texas Oil & Gas Association, said in a statement emailed to UPI. "That means we need pipelines -- lots of them -- that are made from specialty steel that isn't produced in large quantities in the United States."
The Trump administration's tariffs on aluminum and steel frustrate his plans for energy dominance. The United States is on pace to become the world's largest oil producer. Output from one basin -- the Permian shale -- in the southern United States will account for 60 percent of world total production growth by 2023.
The United States is now an oil exporter, though infrastructure necessary to move oil to the market can't keep up with production trends. A report from consultant group IHS Markit found it was the lack of infrastructure, not the lack of spending on exploration and production, that presented a growth challenge for U.S. shale.
Texas Gov. Greg Abbott, a Republican, said in a letter to President Trump that if the steel and aluminum tariffs lead to a cost increase for domestic oil and gas production, it would significantly impair the president's energy sector objectives.
"I highly commend your commitment to curbing unfair trade practices and putting American businesses and workers first," his letter read. "As your administration continues to champion these businesses and workers, please consider the negative impact that the new tariffs on steel and aluminum imports and other goods will have on the economy of Texas and the nation as a whole."
Abbot said estimates show that for every job saved by tariffs, at least one job is lost in the oil and gas sector.
Concerns about the lack of infrastructure were raised outside of Texas, the No. 1 oil producer in the country. The Office of State Planning and Budgeting in Colorado said oil production there was holding at near-record highs, supported by relatively higher crude oil prices. Pipeline limitations near the main U.S. oil storage hub in Cushing, Okla., however, are expected to constrain further growth of Coloradan oil production in the near term.