Economy

Trump’s Tariffs Hit The GOP’s Beloved Oil Industry

JM Ashby
Written by JM Ashby

Drill baby drill, just know that it's going to cost you significantly more than it used to even under the diabolic administration of President Obama.

The price of oil drilling is soaring because Trump's tariffs on steel and aluminum have raised the price of basic materials.

From Bloomberg:

Prices for steel used in pipes, valve fittings and other equipment have risen 26 percent in the U.S. since the start of the year, [ConocoPhillips] Executive Vice President Al Hirshberg told analysts on a conference call. The Houston-based company raised its capital budget for the year by a half-billion dollars earlier in the day, partly due to rising costs. [...]

The warning came two days after Plains All American Pipeline LP appealed to Congress for relief from higher steel prices. The tariffs will add $40 million to the cost of the new pipeline it’s building to the Permian basin in Texas and New Mexico, the country’s biggest oilfield, Chief Operating Officer Willie Chiang said at a July 24 hearing in Washington.

No, I'm not going to cry for the oil drilling industry, I just want to take a moment to recognize that if President Obama had suddenly raised the cost of drilling by over 25 percent and hundreds of millions of dollars, congressional Republicans would have screamed bloody murder.

Congressional Republicans were highly critical of the Obama administration for imposing new regulations and safety measures, but the cost of those measures was a pittance compared to the cost of Trump's trade war. And at least those measures were taken in their own best interest.

No one is benefiting from Trump's trade war or his tariffs on steel and aluminum.

It would be debatable to say that creating jobs in the metal industry is worth losing jobs in the oil industry (or any other industry), but the metal industry isn't adding jobs. The most recently available data tells us that hiring is flat at best and even dropping in some cases. The production of metal is highly automated and simply doesn't require the employment of large numbers of people in the year 2018.

Approximately 142,000 Americans are employed in the steel industry, but over 6.5 million are employed in industries that use steel. The former pool of labor isn't expanding, but the latter is most likely going to shrink.

  • Scopedog
  • Badgerite

    Republicans always want to invoke an economic cost/benefit analysis to any and all environmental regulations. Suppose they try that same standard and trump or themselves for that matter. They don’t even listen to the CBO anymore.

  • muselet

    Once again, Donald Trump’s reverse Midas touch asserts itself.

    And once again, Trump’s supporters and apologists will urge us all to clap harder in order to keep the economy from imploding.

    And yet again, it will be the fault of us DFHs when the inevitable happens, never mind that we’re not within a parsec of the levers of power.

    Exhausting, it is.

    –alopecia

    • ninjaf

      Can we call him President Iron Pyrite? He’d probably take it to mean that he is tough as iron, but we all know he’s just Fool’s Gold.

      #PresidentPyrite

  • 1933john

    Let them eat MoonPie!

  • ninjaf

    Oh, great…and now gas prices will also be going up.

    So tired of the “winning.”