NSPE Gateway to Industry Summer 2014
In This Issue of PEI e-News...

2014 PEI Scholarship Winner Announced

Dustin Arvola is the winner of the 2014 PEI Scholarship competition and will receive $2,500 for his education. Arvola is a junior engineering student at Trine University. He is pursuing a bachelor of science in mechanical engineering degree with minors in metallurgy and mathematics.

He currently maintains a 4.0 GPA while involved in 12 different organizations and serving in nine executive board positions including vice president of Trine University’s student government. Through his involvement in the Delta Chi fraternity, he has been exposed to multiple philanthropic opportunities. Last semester, Arvola logged nearly 60 service hours for philanthropy events.

He also has acquired nearly two years of engineering work experience during his internship at Steel Dynamics Inc. working as a project manager in the casting department. Arvola is currently finishing up his cooperative education program working for Dometic Corp. as a product engineer.

For more information on the PEI Scholarship, visit the PEI website

Time to Revisit Imposed Tariffs on Specialized Steel Imports

For many industrial engineers, project managers, equipment contractors, and land developers, the rise in domestic oil and natural gas drilling has been a financial boon in a struggling US economy. However, has the residual economic growth spilled over to the industrial community at large, for instance, with infrastructure suppliers?

For some, definitely yes, but the anticipated economic benefits for American steel interests have fallen short of expectations, at least in terms of supplying oil and gas pipeline drilling companies with tubular steel. The shortfall is being blamed primarily on the excessive dumping of underpriced oil country tubular goods (OCTG)—high-value steel products used in the extraction of oil and natural gas—in the US market by Southeast Asia and the Middle East. Instead of a revenue windfall, the result has been a significant oversupply of materials and depressed prices for domestic steel producers.

Responding to voiced concerns of the United States Steel Corp., United Steelworkers International, and other domestic steelmakers, the US Department of Commerce determined in July that steel pipe imports from nine countries have harmed domestic competition. The case proceeds next to the US International Trade Commission for a final ruling on whether OCTG imports have adversely affected US industry, with a decision expected in coming months. Beginning immediately, though, tariffs will be imposed on OCTG imports from nine countries: South Korea, India, Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, and Vietnam. The duties will be refunded later if the ITC rules against the Commerce Department’s determination. Under a suspension agreement, import duties will not be collected from Ukraine, although investigations revealed that underpriced imports from the country were also being dumped in the US market.

The Commerce Department’s final determination reverses a February preliminary determination in which the agency failed to assign dumping margins on South Korea’s imports, despite the fact that the country has no domestic market of its own and represents more than half of all OCTG imports. In fact, OCTG imports from the nine countries cited in the steel industry’s petition doubled between 2010 and 2012 to almost 1.8 million tons and accounted for more than 60% of the US market last year, according to the American Iron and Steel Institute. Meanwhile, domestic steelmakers’ production, capacity utilization, shipments, and sales all fell in the first quarter of 2013, with operating income being slashed by nearly $191 million.

AISI President and CEO Thomas Gibson comments, “Imports from these countries have surged in the past few years, and we are pleased that the Commerce Department has reversed its preliminary determination with respect to [South] Korea and taken this critical step to find that imports from all nine investigated countries are benefitting from unfair trade practices. It is critical that the US government continue to aggressively and strictly enforce our trade laws to ensure that relief is provided to steelmakers and the nearly one million workers directly or indirectly supported by the steel industry. Today’s determination is a positive development in this important case.”

Earlier in May, a bipartisan group of 57 Senate members forwarded a letter to US Commerce Secretary Penny Pritzker urging a thorough investigation of the dumping of OCTG imports by South Korea. Specifically, the congressional group requested a more complete investigation as to the accuracy of data submitted by South Korean steel companies. In support of the Senate’s move, Scott Paul, president of the Alliance for American Manufacturing, notes, “We’re exploring natural gas and oil in this country on the promise of energy independence. But if our government doesn’t act, we’ll head down a path of swapping our dependence on foreign oil with a dependence on foreign energy infrastructure.”

Steel import tariff controversies are nothing new. They pervaded throughout several years in the first term of the Bush administration beginning in 2001 and late in the second term in 2008. In large part, they were resolved through the Commerce Department, favorable ITC rulings, and congressional support that helped stabilize an ailing domestic steel industry.

Paul further points out that past history shows that strong trade enforcement can yield positive results, but “only if our government fully investigates and utilizes the tools it has at its disposal.” In 2008, antidumping tariffs (ranging from 30% to 99%) were levied to halt a staggering surge of underpriced Chinese OCTG imports. Domestic industry was given an opportunity to recover, subsequently making almost $1.6 billion in capital expenditures between 2010 and 2012 and curbing American unemployment.

In addition to US Steel, other industry petitioners include: Tenaris, a subsidiary Maverick Tube Corporation; Boomerang Tube; Energex Tube, a division of JMC Steel Group; Northwest Pipe Company; Tejas Tubular Products; TMK-IPSCO; Vallourec Star; and L.P. Steel.

US Steel President and CEO Mario Longhi says the Commerce Department’s “intensive investigation and final decision shows that the dumping of OCTG imports transpired through unfair methods and market-distorting pricing, causing material harm to US markets. As a result of rising imports, US Steel has suffered mightily—orders have been reduced, mills have been idled, and jobs have been lost. Our only recourse against such actions was with the US Department of Commerce and their ability to support the rule of law and create a level playing field for American manufacturing.”

Petitioners to the ITC will, of course, have to argue that the domestic OCTG industry is materially injured or threatened with material injury by reason of subsidized, dumped imports from companies in the nine foreign countries. Equally permitted during the quasi-judicial process, both importers and exporters can also testify that that increased duties are not justified.

The Economic Policy Institute and the law offices of Stewart and Stewart, both based in Washington, DC, report that dumping is especially apparent in the market for OCTG used in oil and natural gas exploration and that a surge of subsidized, dumped steel imports could threaten more than a half-million steelmaking jobs in the United States. An EPI study points to an estimated 4,184 workers in eight states that have lost their jobs to the import surge since the beginning of 2012, with nearly 1,000 steel jobs being lost in the first three months of 2014.

Included in EPI’s research and other studies are current or planned plant closings, slowdowns, or layoffs in Alabama, Arkansas, Delaware, Iowa, Kentucky, Ohio, Pennsylvania, Texas, and West Virginia. US Steel alone, claims it has been working diligently to cut costs and restructure after five years of annual losses, including $290 million in annual cost cuts and undisclosed layoffs.

Not all industry stakeholders, though, are on board with the filed petitions. Reuters news service cites the American Institute for International Steel, a group representing steel importers and exporters, which calls the filing “excessive and unwarranted” and warned that it could disrupt oil and gas drilling. AIIS President David Phelps contends that while the low end of the market is over supplied, that is not the case for high-end seamless pipe sold by US Steel and others. “We think this is an overreach,” he says.  [ return to top ]

NSPE Legislative Affairs News

June 12, 2014

On June 12, Manager of Government Relations Arielle Eiser participated in a political action committee event with Representative Paul Tonko (D-NY). NSPE’s top legislative issues were discussed, including the importance of the “E” in STEM. As an engineer in Congress, Representative Tonko has worked diligently to strengthen the American engineering workforce. The Congressman is the primary House sponsor of the Educating Tomorrow’s Engineers Act (H.R.2426). Congressman Tonko is a champion of STEM education, and throughout his tenure in Congress, he has proven himself to be a champion of engineers.

June 10, 2014

On June 10 President Obama signed the Water Resources Reform Development Act (WRRDA) into law. The conference report was approved overwhelmingly in the Senate by a vote of 91-7 and by an even more remarkable margin of 412-4 in the House of Representatives. WRRDA is the first Army Corps of Engineers authorization since 2007. NSPE endorsed this vital legislation and sent a letter of support to the bill’s primary sponsor, Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) in September 2013. In the letter to Chairman Shuster, NSPE President Robert Green, P.E., F.NSPE, praised WRRDA for “overhauling and dramatically improving the process for federal water resources development. The legislation sets hard deadlines on the time and cost of studies, consolidates or eliminates duplicative studies and concurrent reviews that can hold up projects for years, and streamlines environmental reviews."

June 2, 2014

On June 2, the Environmental Protection Agency (EPA) issued its long-anticipated proposed rule targeting carbon dioxide emissions from existing power plants. EPA estimates that the new rule would help to reduce power-sector carbon dioxide emissions to approximately 30% below 2005 levels by 2030. The EPA’s proposal assigns a specific emissions reduction goal to each state. The rule’s requirements vary significantly among states. Certain states will have to dramatically reduce their annual emissions, while nine states and the District of Columbia already meet or exceed the proposed requirements for 2030.

NSPE strongly supports a diverse, comprehensive energy portfolio to ensure long-term, reliable, secure, and environmentally responsible energy supplies at predictable and affordable costs. NSPE recognizes the value of energy sources ranging from coal, oil, and natural gas to wind, solar, and biomass.

On June 2, NSPE’s members utilized the debut of NSPE’s new Legislative Action Center, now powered by VoterVoice, to send a clear and powerful message to Congress to immediately stabilize the Highway Trust Fund and ensure a long-term solution to prevent insolvency. In less than 12 hours, 100 NSPE members answered the call to action and sent an action alert to their senators and representatives. Grassroots advocacy campaigns usually lose substantial momentum after the first day or two. However, a week into this advocacy campaign, nearly 200 NSPE members have sent 539 messages to 214 Members of Congress. NSPE’s member-advocates have reached 84% of the Senate and 30% of the House of Representatives and continue to increase their reach.

For all the latest NSPE legislative activities, visit the NSPE website [ return to top ]

Contact the 201314 PEI Executive Board Officers

For a complete list of PEI Executive Board Officers, visit the PEI website
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