Plains All American Pipeline (PAA) has been hit with a $40 million tax because of steel tariffs that were enforced under the Trump administration.
The pipeline project will go forward, but Plains' COO has said that the financial impact is worrisome.
“We can’t let trade officials determine product specification for companies. It’s our pipeline, it’s our asset," Plains' COO said.
The COO also told Congress that the material needed to build oil and gas pipelines should be exempt from the steel tariff considering that it only makes up ~5% of the total volume of steel imports.
He also emphasized that steel orders already made should stand, tariff free, at least until U.S. manufacturers are able to build the capability and capacity to deliver timely materials to meet America’s energy production growth.
The $40 million tax is for high-grade steel from Greece that would be used to build the 585,000 bbl/day Cactus II pipeline. The Cactus II pipeline was one of the main projects meant to alleviate the lack of pipeline capacity problem that the Permian faces.
Plains has already applied to receive exemptions, however the U.S. government denied an exclusion from the tariff.