Melko Comments on Effects of Trump’s Steel Tariffs

Partner John Melko is quoted in a Law360 article, “Trump’s Steel Tariffs May Worsen Permian Pipeline Crunch,” about the possible effects of President Trump’s steel tariffs on the current pipeline logjam in the oil-rich Permian Basin of West Texas.

Melko, who does restructuring work in the oil and gas sector, said the tariffs represent a lose-lose proposition for oil and gas producers in the basin, who will either have to absorb the additional costs of constructing new pipelines or face higher transportation costs if new pipelines aren’t built because the tariffs make them economically unviable. “If they can’t get pipelines built, then they’re going to be stuck with production they can’t get to market, or will be suffering a significant discount due to increased transportation costs,” he said. “It will definitely have an effect on upstream producers, especially those who have higher acquisition and drilling costs.”