American Oil and Gas Reporter - June 2018 - 29

date of the company's signed purchase
order or March 8, whichever is earlier.
API also says relief should be granted
for five years, rather than one year as
proposed in the interim regulations. It
argues that one year "does not reflect the
reality of business planning typical in
the oil and gas industry," reflecting that
purchase orders for large procurements
"often are made more than three years
before products are delivered."
Commenting that it is very difficult,
if not impossible, for a company to complete Commerce's exclusion request form
without revealing proprietary information,
ASCAT also asks that the interim regulations be amended "in a way that protects
confidential information."
The Texas Alliance says, "Any information provided by individual oil and
gas companies . . . (should be) viewed as
confidential business information and
carefully guarded thusly."
At minimum, API offers, it should
enjoy the same safeguards as petitions for
anti-dumping or countervailing duties.
Domestic Production Capacity
Both IPAA and the API group devote
considerable space to commenting on
Commerce's criteria for measuring domestic steel production capacity. IPAA

notes that the department's Section 232
analysis recommended actions sufficient
to increase domestic steel production
from 74 percent of listed capacity to 80
percent, based on output tonnage.
"However, 'working' steel capacity
can differ from listed capacity," the association counters.
As an example, it says a significant
part of steel mills' listed capacity for
OCTG is based on offshore goods, which
generally are larger and heavier than onshore tubular goods. "Because onshore
OCTG are smaller and lighter, producing
the same linear footage as for offshore
tubular goods would (result in) fewer
tons of product," the association reasons.
"Consequently, using listed capacity to
determine the success of the Section 232
initiative for oil and natural gas production
steel demand would be inaccurate."
To that concern, API adds, "How does
Commerce intend to deal with multiple
exclusion requests where each individual
request may be fulfilled from domestic
parties, but the total of such requests exceeds current U.S. capacity?"
Then there is the issue of product
quality, API continues. "Manufacturers
will and do argue that the quality and
standards of their products, if not identical
to those of an imported product, are

'equivalent,'" the group maintains. "There
are times such claims are warranted, and
at other times they are not."
Remarking that companies frequently
purchase steel products manufactured to
custom guidelines, which may go beyond
recognized standards such as the American
Society for Testing and Materials, API
asks that Commerce "allow companies
to seek product exclusions on the basis
of internal quality assurance standards."
One other metric for determining sufficient domestic capacity, API suggests, is
considering economic factors "in the spirit
of President Trump's March 28, 2017, executive order titled "Promoting Energy
Independence and Economic Growth."
Additional Suggestions
API makes three more suggestions
for Commerce's product exclusion process:
* Applicants should be afforded an
opportunity to respond to and rebut objections to their exclusion petitions.
* In the interest of transparency, all
petitions, objections, comments and final
rulings, as well as Commerce's metrics
for determining domestic steel manufacturing capacity, should be posted online.
* All final actions regarding tariff
exclusions should be appealable to an
appropriate administrative body.
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