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ALPPA Challenges U.S. Pipeline Operator’s Claims


American Line Pipe Producers Association Challenges U.S. Pipeline Operator’s Claims Regarding Ability to Source Steel Pipe for Its Projects Domestically

July 24, 2018

CONTACT: Tim Brightbill

American Line Pipe Producers Assn.

Washington, DC—The American Line Pipe Producers Association (ALPPA), a domestic coalition of large diameter line pipe producers, challenges recent claims made by the Vice President and Chief Operating Officer of Plains All American GP LLC (Plains Pipeline), a U.S. pipeline operator, regarding Plains Pipeline’s inability to source API 5L, Grade X65 steel pipe for its projects domestically.

Today, during the U.S. House Committee on Ways and Means hearing on “Product Exclusion Process for Section 232 Tariffs on Steel and Aluminum,” Plains Pipeline criticized the U.S. Department of Commerce’s recent denial of its request to exclude large diameter welded pipe from Greece from Section 232 tariffs. The company claimed that the denial was based on a flawed determination that the requested product is “produced in the United States in a sufficient and reasonably available amount and of a satisfactory quality.” There is no merit to Plains Pipeline’s contention. The goal of today’s hearing was to explore the steel Section 232 tariffs and any problems or challenges with the exclusion process. On the Plains Pipeline project, the process worked exactly as intended. Commerce carefully reviewed the exclusion request, as well as several objections filed by the domestic industry, and correctly concluded that no exclusion was necessary because the domestic industry has plenty of available capacity to make an interchangeable product.

The HFW and SAWL manufacturing methods result in interchangeable pipes that both meet API 5L pipe specifications. For this reason, pipeline operators often inquire with both strictly HFW and strictly SAWL pipe producers, with the final purchasing decision based on price. It is also common for pipeline operators to use both HFW and SAWL in the same pipeline. The denied exclusion request for Plains Pipeline’s Cactus II project states that HFW is required; however, Plains requested bids and actually sourced both HFW and the interchangeable SAWL product for this pipeline. The required 26” pipe can be and is produced in the United States by multiple U.S. producers.

The U.S. industry is now operating at a capacity utilization rate of well under 40%, and is ready and willing to supply pipeline operators like Plains Pipeline if given the opportunity to do so. Section 232 tariffs provide domestic producers with that opportunity. Indeed, Commerce’s denial of Plains Pipeline’s request supports the Administration’s objective of helping to increase U.S. steelmaking capacity and ensure the viability of the U.S. steel industry.

The Section 232 product exclusion process should not facilitate the purchase of dumped and subsidized large diameter welded pipe. In January 2018, ALPPA and other domestic producers filed antidumping and countervailing duty cases against dumped and subsidized imports of large diameter welded pipe from six countries: Canada, China, Greece, India, Korea, and Turkey. The International Trade Commission has already made a unanimous preliminary determination that the U.S. industry is materially injured or threatened due to these imports. Commerce reached preliminary subsidy determinations on China, India, Korea, and Turkey in June; preliminary antidumping determinations are due in August.

The Washington, DC-based law firm of Wiley Rein LLP represents ALPPA on trade-related matters.

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