Rep. Gene Green Fights for Drill Pipe Jobs
January 5, 2011
Washington, D.C. – Today, Rep. Gene Green (TX-29) testified in support of the oil and gas industry of the Houston-area and against an influx of unfairly traded drill pipe and drill collars from China. The United States International Trade Commission (USITC) held a hearing, “Drill Pipe and Drill Collars from China,” to examine the consequences of foreign equipment on the domestic oil and gas economy and production.
“The Department of Commerce found that the entire Chinese drill pipe industry receives double digit subsidies from the government of China,” Rep. Green said in his statement. “I am deeply concerned that at the present depressed rates of capacity utilization, many of these producers, like VAM drilling, are at a tipping point.”
VAM Drilling is located in Rep. Green’s Congressional District, and has invested millions of dollars to expand. However, they have been forced to layoff approximately two-thirds of their employees. Two hundred more jobs are at risk if VAM Drilling must continue to compete with underpriced drill pipes and collars.
“I am gravely concerned that we might add to our dependence on foreign oil, a dependence on imported products that we need, to drill for oil and gas in this country,” Rep. Green continued. “This is an unacceptable risk to our long term energy and national security.”
In recent years the volume of U.S. imports of seamless pipe from China more than doubled, rising from 158,000 net tons in 2006 to 366,000 net tons in 2008. In February 2010, the USITC determined there is a reasonable indication present that the U.S. industry is threatened by these Chinese imports.
Rep. Green’s full statement below:
Good morning Chairman Okun and members of the Commission. My name is Gene Green and I represent the 29th Congressional district of Texas.
One of the petitioners in this case, VAM Drilling is located in my district, and virtually all the U.S. producers of finished drill pipe and drill collars are located in the Houston area.
Since VAM Drilling purchased the OMSCO Company in 2005, they have put tens of millions of dollars in new investments into new equipment to expand capacity, improve quality, and increase productivity.
However, in spite of these investments, and as a result of declining demand and increased imports from China, the company has been forced to take periodic shutdowns and has laid-off about two-thirds of their employees.
It is clear that massive Chinese overcapacity to produce drill pipe and drill collars will result in a permanent shutdown of VAM Drilling’s plant. Forty percent of the jobs in this industry have already been lost and that is just the direct job losses, not including the jobs generated in the community to support these mills with services, transportation, as well as local retail establishments.
These are good, middle class jobs. Jobs you can take pride in. Jobs that Houston, and other communities around the country, cannot afford to lose. Over two hundred permanent jobs are at risk of being lost in my district if VAM Drilling cannot compete with underpriced Chinese drill pipes and collars.
I have always been supportive of the energy sector and the domestic oil and gas industry. I serve on the House Committee on Energy and Commerce and have consistently fought for legislation that would increase oil and gas production in the United States, and lessen our dependence on imported foreign oil, often imported from countries that are less-than-friendly to the United States.
If I thought for one minute that imposing duties in this case would create shortages for our oil and gas industry I would not be here. However, reports from this very commission, and the information provided to me by industry members, show that this industry is operating at only a one-third capacity utilization rate.
The Department of Commerce found that the entire Chinese drill pipe industry receives double digit subsidies from the government of China and that is not even including the currency manipulation which provides additional subsidies on these exports. They also found that most of the imports from China were sold at dumped prices.
I am deeply concerned that at the present depressed rates of capacity utilization, many of these producers, like VAM Drilling, are at a tipping point.