Texas Alliance contacts Trump regarding NAFTA negotiations, steel tariffs

AUSTIN -- The Texas Alliance of Energy Producers continues to monitor NAFTA trade negotiations and steel tariffs. It was just last month the TAEP Board passed a resolution asking the U.S. government to recognize the importance of oil and gas exports under NAFTA.

As events continue to progress, Alliance Chairman Bob Osborne has updated TAEP's comments with the following letter:

Dear Mr. President,

On behalf of the Texas Alliance of Energy Producers, which represents nearly 2,600 independent oil and gas producers as well as service and drilling companies, I would like to take this opportunity to express our thanks to you and your administration for reducing the regulatory burden on American oil and gas producers, and for leading the effort on major tax reform.

You have on numerous occasions celebrated the successes of the U.S. domestic oil & gas industry. As you have correctly noted, the achievements in the industry over the last 15 years have reversed decades-long production declines and ushered in a new era of energy abundance and affordability in the United States. At the same time, the U.S. has moved ever closer to energy independence as we have grown production dramatically to meet our own domestic needs, and greatly enhanced our national energy security by reducing our reliance on energy sources from outside the United States.

It is with this recognition of your efforts to encourage America's energy dominance that we respectfully request your further consideration of steel tariffs. The exemptions for Canada and Mexico are very helpful, and if those exemptions were made permanent that would alleviate our concerns considerably.

Our board recently passed a resolution regarding the North American Free Trade Agreement (NAFTA) addressing that and other issues, which was sent along with an explanatory cover letter to United States Trade Representative Robert Lighthizer. I am enclosing a copy of the resolution and cover letter.

The oil & gas business at all levels, and in our case, the "upstream" ( exploration and production) sector of the industry, is very much a "steel-consuming" industry. Steel inputs easily account for 10% or more of the upstream industry cost structure from drilling rigs to "oil country tubular goods" (OCTG) - drill pipe, downhole tubing, line pipe, etc., as well as other oilfield equipment.

As independent oil & gas producers in Texas and across the United States, we ask that you address the various steel-­related trade imbalances in targeted fashion to the maximum extent possible, in ways that will minimally impact our domestic oil & gas industry. We are marching with you toward U.S. and North American energy independence, which is every bit as important to the nation's economic welfare and security.