Brian O'Neill: Patriotism is pipe dream to some steel purchasers

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If Marcellus Shale is a boon to American manufacturing, why is the U.S. Steel plant that supplies pipe to the drillers shutting down in McKeesport?

The steel industry has named its villain: South Korean manufacturers who illegally dump their tubes here. But if American drillers weren't buying them, that wouldn't be a problem.

Some drillers mustn't have gotten the message from the chest-pounding commercial that Range Resources has out there. Perhaps you've seen it:

"Workers here have always been a proud bunch,'' the narrator begins as we watch a middle-age guy carrying a lunch bucket on a steep Pittsburgh street. "All they ever wanted was the opportunity to show what they can do,'' we hear as our man works with others to make pipe down at the mill, all of them clearly the kind of guys you'd love to have a beer with.

The ad is shot in black and white, but at the end when these workers emerge from the mill with a section of pipe, the Range Resources people walking toward them to take the handoff are in color! Holy Wizard of Oz!

The narrator concludes, "Now, thanks to our abundant natural gas, manufacturing is on its way back. And for a new generation, opportunity awaits.''

The Range Resources logo and the words "Drilling is just the beginning" close the 30-second show. Also closing, we learned last week, are pipe-making plants in McKeesport and Texas. That will cost 260 workers their jobs.

Let's be clear: Range Resources is not the company going off-script. It has been and will continue to be a big customer of U.S. Steel piping, both companies agree.

Apart from a top piece of steel used in the initial drilling phase, all the steel that Range uses comes from U.S. Steel, Range spokesman Matt Pitzarella said. That's true not only for its Pennsylvania operations, but its work in Texas and Oklahoma, he said.

That shouldn't change. U.S. Steel has eight other tubular facilities in Alabama, Arkansas, Texas and Lorain, Ohio, and a company spokesman said, "We are working directly with our customers to ensure that their needs are met.''

OK. So many drillers are going domestic, but not all. U.S. Steel is urging the U.S. Department of Commerce "to recognize and punish illegal South Korean dumping,'' as President and CEO Mario Longhi put it to the Congressional Steel Caucus last March. It won a case against China in 2009 that essentially ended its shipments here of steel pipes for drillers, Mr. Longhi testified, but then South Korea stepped into that breach.

The steelworkers union is with him there. Tom Conway, vice president of the United Steelworkers, told Paul Guggenheimer of WESA-FM's "Essential Pittsburgh'' last week that preliminary findings by the Department of Commerce this year seemed to go "out of their way'' to keep South Korea's illegal products coming in.

When a caller asked why the steel industry and its union don't go after American buyers rather than the Asian sellers if sales are illegal, Mr. Conway said the law isn't structured that way. When Mr. Guggenheimer asked if there was some way "to shame [shale gas producers] into doing what you see as the right thing,'' Mr. Conway answered that short-term savings often trump any kind of "economic patriotism.''

It seems nobody in the industry wants to point out exactly who the buyers of foreign steel are because those companies may be buying American steel, too. It rarely makes sense to antagonize a customer.

The Marcellus Shale Coalition says its member companies "are deeply committed to sourcing locally, including through purchasing regionally manufactured steel from coalition members like U.S. Steel, TMK IPSCO and Vallourec,'' But the coalition has no power to sanction any company that strays from that expressed commitment.

The Pennsylvania Department of Environmental Protection requires drillers to report "the country of origin and manufacture of tubular steel products used in the construction of the well,'' but there's no easy public access to that information, at least none I could figure out Friday afternoon.

I still like the Range Resources ad. It would be nice to know which companies are straying from the script.


Brian O'Neill: boneill@post-gazette.com or 412-263-1947.

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