Sen. Lisa Murkowski said Friday that President Trump’s tariffs on imported steel could add $500 million to the cost of a major natural gas export terminal planned in her home state of Alaska.
“The back of the envelope numbers with these tariffs, we might be in a situation where it might be as much as half a billion dollars added on the most expensive infrastructure projects that we have seen with this country,” the Alaska Republican said at the CERAWeek energy conference in Houston. “This has real impact and at a time when we’re trying to build out on that energy promise that we have, whether it’s up north or elsewhere around the country. This is not coming at a good time for us.”
Murkowski is the chairwoman of the Senate Energy and Natural Resources Committee.
Alaska in November struck a $43 billion joint development deal with China on an 800-mile pipeline to bring natural gas from the North Slope to Asia.
The Alaska Gasoline Development Corporation and the state government signed the joint liquefied natural gas, or LNG, development agreement with the state-run China Petrochemical Corp., or Sinopec, CIC Capital Corp. and the Bank of China.
The liquefied natural gas project, named Alaska LNG, will include three terminals with the ability to produce 20 million tons of liquefied product for shipment to Asia.
Murkowski also said the tariffs complicate relationships with countries that are importing more U.S. oil and natural gas, such as South Korea.
“It sends a confusing message,” she said.
The U.S. became a net natural gas exporter in 2017, shipping more natural gas to other countries than it imports.
“A lot of good work has gone into ensuring that the U.S. is able to reclaim its role as a global energy leader. Higher prices for steel — which accounts for a significant portion of project costs — could easily set us back,” Murkowski said.
Sen. John Cornyn, R-Texas, joining Murkowski at CERAWeek, expressed regret about the rise of protectionist forces in the Trump administration.
Gary Cohn, Trump’s top economic adviser, is leaving the White House after the tariff decision, giving heft to Peter Navarro, the more protectionist director of the White House National Trade Council.
“I’m sad to see Mr. Cohn leave, and the ascent of Mr. Navarro, who I think has a lot of wrong ideas when it comes to trade,” Cornyn said.
Trump has said allied countries can negotiate to be exempt from the 25 percent steel tariffs, which initially won’t apply to Mexico and Canada to help facilitate efforts to renegotiate the North Atlantic Free Trade Agreement.
His tariff proclamation also includes a potential carveout for “U.S. parties” to apply for an exemption if they can’t meet their demand for steel domestically or for national security reasons.
The pipeline industry is already pressing the Trump administration for a categorical exemption of all steel products used in their products.
The move by the pipeline industry came Friday morning after other segments of the energy industry indicated they would be asking for exemptions for LNG facilities and related pipeline resources.
Industry officials say the type of steel used in pipelines and other energy infrastructure is a niche market, which most domestic steel producers have left because of the high cost.
They said Trump’s tariffs could drive up the cost for projects that require steel. Developers of pipelines and other infrastructure could pass on higher prices to the oil and gas producers that use their lines.
