Industry groups express concerns that tariffs will disrupt free flow of energy

The US Chamber of Commerce, along with oil and gas and clean energy groups, is sending the administration a message of "concern" about President Donald Trump's tariff policy.

During a March 25 panel discussion hosted by the American Clean Power Association, senior industry officials urged the White House and the administration to be cognizant of the potential volatility that their trade policies could introduce to energy markets, businesses, and consumers.

"This is a huge issue, right now, with the Trump administration creating ... a bit of uncertainty in the business community, [and] certainly in the markets over the last several weeks," said Frank Macchiarola, chief advocacy officer for the American Clean Power Association, who moderated the panel.

"There is a great deal of uncertainty" regarding the administration's policy direction on trade, he added. "I don't think the markets are recognizing [that the president is using the tariffs as leverage]."

Marty Durbin, the US Chamber of Commerce's senior vice president for policy, said the Chamber approached the Trump campaign over a year ago to explain "that this was a very important policy for both parties to focus on, and expressing our concerns about the use of tariffs."

"Tariffs are absolutely an appropriate tool when used for national and economic security reasons, but we also have to recognize that when they are broadly applied, they are a tax that is paid by American consumers," Durbin said.

The president has repeatedly argued that tariffs are a tax on foreign countries rather than on consumers.

"When you think about the North American energy framework ... we're so concerned about what that's going to mean for the longer-term planning for businesses, but [also] what impact that would have on the economy itself," Durbin said.

Durbin also suggested that the administration's tariff strategy has been somewhat haphazard in its implementation. "As far as the outlook, this is one of those areas where we've gotten a lot of signals," he said. "I'm not questioning the president's commitment to using tariffs in a very direct way, but there's been a lot of 'yes we are, but now we're going to delay [implementation].'"

Nevertheless, the president's most recent comments show that he would allow flexibility, so the Chamber is taking a wait-and-see approach moving forward, Durbin said.

"So, we're looking to see ... and, obviously, doing all we can weighing in with the [US] Trade Representative and the White House and others on our concerns about the use of tariffs," he said.

Dustin Meyer, the American Petroleum Institute's senior vice president of policy, economics and regulatory affairs, said the trade group's message to the administration has been that "energy is an example of trade policy that works, so let's make sure that the trade vision doesn't really threaten that."

He suggested that the dispute with Canada and Mexico over tariffs could ultimately upset the president's energy dominance agenda.

The US oil industry produces about 13 million barrels of oil per day, but the country still needs to import some oil to meet domestic demand of 18-19 million b/d, Meyer said.

As an ally and the closest country geographically, Canada is a good fit, plus "we can import it at a discount to the West Texas [Intermediate] price," he said. "We then use that in our Midwestern refineries and that allows us to then export higher-value products out of the Gulf Coast."

US producers do something similar when there is excess natural gas production in Texas, which can be easily shipped to Mexico. That frees up oil production in the Permian Basin, which is "a good thing that helps our trade balance," Meyer said.

"We are the world's largest oil producer, by far. We are the world's largest producer of natural gas, by far. We're a net energy exporter. We're the world's largest exporter of liquefied natural gas. All of these things help our trade balance," Meyer added. "So, let's make sure that your broader trade vision doesn't run into conflict with your vision for American energy leadership and American energy dominance."