Texas oil and gas leaders call for metal tariff removal, warn of effects on the industry and Texas economy

The Texas Independent Producers and Royalty Owners Association, one of the state’s largest oil and gas advocacy organizations, issued a statement Monday warning about the negative economic impact Texas would feel from recently imposed steel and aluminum tariffs.

The statement, written by the organization’s president, Ed Longanecker, calls for the removal of those tariffs, echoing Gov. Greg Abbott’s own call for tariff removal from late June.

“Though operators have welcomed a reprieve from overly burdensome federal regulations targeting the oil and gas industry under President Trump, newly implemented tariffs on steel and aluminum products by the Trump administration already are having a negative impact on infrastructure development and drilling projects throughout the country,” Longanecker said in the statement.

Trump increased the steel tariff by 25 percent and the aluminum tariff by 10 percent in March in a change that took effect in late May. The increased tax applies to imports from Mexico, Canada and Europe.

The statement offers an overview of the state of Texas oil and gas at the moment, which Longanecker says is “not yet feeling the full effect of the newly implemented tariffs.”

According to the statement, the industry has added 6,060 net new jobs between January and July of 2018 compared with the same period in 2017. The salaries for these jobs add up to a total of $42 billion, with the most jobs in oil and gas extraction, followed by drilling oil and gas wells.

Additional contributions Longanecker points out include Texas’ record oil production, the industry’s large additions to state revenue and its role in building the $12 billion state Rainy Day Fund.

The Texas oil and gas industry has generally supported Trump, and the statement uses gentle language to condemn the tariffs, calling them “well-intended” but ultimately harmful to the industry’s continued growth.

“Ultimately the tariffs will result in a slowdown in exploration and production activity and infrastructure projects, job loss and decreased tax revenue, which will reverberate throughout the state and national economy,” Longanecker states. “The Texas oil and gas sector once again joins Governor Abbott in calling for the removal of tariffs on steel and aluminum for the benefit of our state and industry.”

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