Majors Say Oil Dumping Charge Lacks Merit
Following in the footsteps of gas pipelines, major producers
have asked the federal government to reject an independent
producer-backed petition that seeks to have tariffs imposed on
crude oil imports from four foreign countries accused of illegal
In a letter to Commerce Secretary William M. Daley, John Sharp
of the Natural Gas Supply Association (NGSA) urged the department
to dismiss a pending petition to have tariffs assessed on imports
from Mexico, Venezuela, Saudi Arabia and Iraq. A coalition of
independent domestic producers, called "Save Domestic Oil," filed
the petition in an attempt to stop the foreign producers from
allegedly dumping oil in the United States.
Sharp said the charges outlined in the petition were "without
merit," arguing that the foreign producers had "rational economic
reasons" for selling their oil at lower prices. Also, NGSA believes
that imposing a tariff would not be in the "best interest" of
domestic producers because the foreign producers would simply sell
their oil to other countries, resulting in "costly inefficiencies"
in the U.S. crude oil distribution, transportation and refining
system, he wrote.
The producer group further fears such restrictions could trigger
"retaliatory actions" by other foreign countries. "Indeed, we are
concerned that the.....petition has apparently caused Mexico to
reconsider its decision to eliminate the tariff it imposes on
imports of natural gas from the U.S. NGSA members support and have
an economic interest in the early elimination of that tariff."
The association's members "are struggling to recover from the
effects of the record low oil prices of last year and early this
year, and we sympathize with others who are having the same
experience. However, we are convinced that imposing trade
restrictions will not aid in the recovery of our industry," Sharp
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