Commerce Continues to Gas Up Duties

Gabriella Beaumont-SmithPresident Biden and others in Washington areimploring U.S.-based oil and gas companies to increase drilling and production to help temperrising energy prices. The administration even tried enticing these companies byresuming plans for oil and gas development on federal lands. But many of the largest firms are refusing to start new projects on the grounds that they cannot achieve a  sustainable return on potential investments. One important factor in these investment decisions is production costs, which can make the difference for a project’s viability and are rising in the current inflationary environment. You’d thereforethink that the Biden administration —eager to boost domestic oil and gas output—would be doing everything in its power to temper the rising costs of vital drilling inputs.Think again.Last month, the Department of Commerce announcednew“trade remedy” duties on oil country tubular goods (OCTG), which are types ofpipes used in oil and gas drilling. The new duties join a  barrel of others imposed over the last twelve years (and not just on imports from China). As shown in Table 1, the United States subjects seven of its most important trading partners to antidumping and countervailing duties (AD/​CVDs) on OCTG. (Note that China, India, and Turkey are subject toboth antidumping and countervailing duties.)The United States is thelargest oil producer in the world, and exploration activities drive domestic demand for OCTG. Give...

Source: Cato-at-liberty - May 2, 2022 Category: American Health Authors: Gabriella Beaumont-Smith Source Type: blogs