The leader of a natural gas pipeline industry group warned Monday that President Trump’s steel tariffs could threaten the billions of dollars of investment needed in gas and oil pipelines in the U.S. and Canada over the next two decades.
“There is the potential steel tariffs could have a negative impact on the industry and the ability to expand,” Don Santa, president of the Interstate Natural Gas Association of America, told reporters during a press conference in Washington. “It has introduced a significant element of uncertainty.”
Santa was unveiling a report that said North America will need $791 billion in new infrastructure by 2035 to meet growing demand. He said 75 percent of the steel used in pipelines is imported. The type of steel used in pipelines and other energy infrastructure is a niche market, and most U.S. steel producers have left the pipeline market because of its high cost.
The study, conducted by consulting firm ICF, did not address the impact of the 25 percent steel tariffs on imports, because it was conducted before Trump imposed them.
The $791 billion estimate anticipates 180,000 miles of pipeline, including 26,000 miles of new natural gas pipelines.
Developers have already built about 45,000 miles of new transmission pipelines across the U.S. from 2000 to the end of 2016, to meet surging supply from the shale boom.
The pipeline industry projects increasing demand for natural gas and the need for pipelines to transport it from shale will help underserved demand centers such as New England. The U.S. is now the world’s biggest producer of natural gas and is a net exporter of the product for the first time since the late 1950s.
“While we now are in the midst of a remarkable expansion of the pipeline network, this report confirms that there will remain a need for new pipeline infrastructure,” Santa said. “Continued production growth, combined with growing consumption — particularly for natural gas — will drive the need for expanded pipeline capacity to supply energy consumers in both domestic and export markets.”
The pipeline group’s study projects new infrastructure development in the U.S. and Canada will employ 725,00 people per year until 2035, including indirect jobs such as those in steel manufacturing, hotels, and restaurants in areas where the pipeline is made and maintained.
But the study predicts the capital cost of developing the pipelines will increase 75 percent compared to 2016 because of increases in labor and material costs, as well as delayed project approvals.
