A major gas pipeline group has asked the federal government toreject a producer petition that seeks to have tariffs imposed oncrude oil imports from four foreign countries accused of illegaldumping.
The board of directors of the Interstate Natural Gas Associationof America (INGAA) passed a resolution last week urging theCommerce Department and International Trade Commission (ITC) todismiss the pending petition to have tariffs assessed on importsfrom Mexico, Venezuela, Saudi Arabia and Iraq. A coalition ofindependent domestic producers, called “Save Domestic Oil,” filedthe petition in an attempt to stop the foreign producers fromallegedly dumping oil in the United States.
“This petition sends the absolute wrong signal at a time whenMexico is opening its gas markets to U.S. investment,” said INGAAPresident Jerald Halvorsen in a prepared statement accompanying thepipeline group’s resolution. In response to the petition, theMexican government has refused to remove a 4% tariff on natural gasimported into its country. The tariff was scheduled to be liftedJuly 1st.
INGAA said it was particularly concerned about the potentialeffect of oil tariffs on the “extensive investments and expansionplans” of its member companies in Mexico, Venezuela and SaudiArabia. These would be “impacted negatively by reduced marketaccess and petroleum products to the United States and a resultingdelay in implementation of market-opening initiatives,” such aswith Mexico’s gas market, according to INGAA’s resolution.
Although “sympathetic to the difficult situation” facingdomestic independent producers, INGAA said it believes thathistorically low world energy prices are to “blame for theirplight” rather than the actions of Mexico, Venezuela and SaudiArabia. It called on the Clinton administration and Congress totake measures – aside from granting the petition – to “assist thedomestic oil and gas industry with special consideration given tosmall producers.”
Exxon Corp., as well as other major producers, put in its twocents also, calling on the U.S. government to reject theantidumping complaint. “Exxon is opposed to misguided requests forgovernment protections to shield U.S. producers from the rigors ofthis competition and business climate,” Chairman Lee R. Raymondsaid in a letter to Commerce Secretary William M. Daley.
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