It has come to AXPC’s attention that the Office of the U.S. Trade Representative is re-considering a tariff on barite imports from China. While little known outside of the energy industry, barite is vital to oil and natural gas operations. It is used as a weighting material for drilling mud and helps ensure safe drilling operations. The suggested 25 percent tariff on barite imports from China would threaten the effectiveness of American energy production.
This week, a group of bipartisan lawmakers from energy producing powerhouses like Texas and Ohio sent a letter to the Office of the U.S. Trade Representative urging the agency to avoid placing tariffs on barite imports from China. The lawmakers correctly pointed out that “barite remains vitally important for our nation’s energy security.”
Barite (or barium sulfate) is a naturally occurring mineral that is found in a variety of rock formations, such as sandstone and limestone. API maintains strict specifications for barite drilling grades in order to ensure producers use the material safely. Barite can withstand high pressures during drilling. It is also able to maintain its softness and serve as a lubricant, preventing damage to drilling equipment. Barite’s density allows it to counteract the force of oil and natural gas as it comes out of the well, creating an even flow of product that can be safely captured at the surface.
Modern drilling practices in the energy industry require large amounts of barite to properly weight and form drilling mud. 90 percent of barite sold in the U.S. is used for drilling of oil and natural gas wells. Currently, there is no existing alternative to barite, so American energy producers need access to as much cost-effective barite as possible. Barite mines in the United States do not contain enough supply to support domestic consumption. According to the 2019 USGS Mineral Commodity Survey, the United States now relies on imports for 84 percent of the barite that it consumes. In 2018, the U.S. imported 2.6 million metric tons of barite in 2018. From 2014-2017, 63 percent of our of barite imports came from China.
Levying a tariff on such an essential material would pose a critical threat to the United States energy industry. It could create a significant decline in exploration capacity and pass a burdensome cost increase onto consumers, as producers would be forced to import barite from other, more expensive sources. As producers scramble to find other sources of the material, we could witness a major slowdown in exploration, which could harm America’s energy dominance.
On behalf of its members, AXPC strongly disapproves of any effort to impose tariffs on barite imports and urges the Office of the U.S. Trade Representative and Congress to consider the harmful impacts these import fees could have on consumers and American energy production. We thank Representatives Cloud, Weber, Gonazalez, Cuellar, Higgins, McKinley, Gooden, Garcia, Johnson, Crenshaw, and Balderson for their leadership on the issue.