Lodamun

[imperialpearl]

High tariffs for imported energy as Hartman recommits to Green Compact

As a means of signalling his administration's commitment to the Green Compact, President Hartman instructs Harrington Company to impose 120% tariffs on all fossil fuel-based energy imports.

ⓘ: An LNG terminal in Loxhampton, Berkwaki, the centre of Lodamese energy dependency

Against the backdrop of the administration’s overtures towards seeking out winding down agreements with much of its international fuel trading partners, President Robert Hartman announced a dramatic increase in tariffs on imported crude oil and natural gas, as part of a broader effort to “accelerate the nation’s transition away from fossil fuels, in relation to the Green Compact. Previously, Merchant-General Kendyl Makinen noted that in re-evaluating Lodamun’s dependence on imported energy and its transition towards renewables, its long-standing relationships with the major oil and gas producers of the world would be subject to ‘winding down agreements’ instead of a dramatic, sudden cut in the flow of imported energy. Speaking to reporters at a Whitehall press conference, President Hartman explained that although the administration remained committed to a ‘gentle exit’ from the crude oil and natural gas industry domestically, there was nonetheless a need to send a clear signal to international fuel traders that the nation’s long-term energy trajectory would be at strict odds with their business models. “The success of the Green Compact is partly determined by how we move to disincentivise fossil-fuel imports and make that sector less attractive over the next couple of decades,” President Hartman said. “We want to begin signalling to people that we [Lodamun] are leaving this sector behind, and it’s a matter of persons involved in that sector either follow us [into renewable projects] or get out of our way.”

The extent of the tariffs to be imposed on imported crude oil and natural gas, according to President Hartman, would hover around 120%. Concurrently, tariffs on imported energy from territories not included on the Harrington Company’s exemption list stand at 10%. These tariffs, although considered mild when one compares it those imposed on imported semiconductors (50%), had been imposed under the previous administration of President William Hanlon to Lodamun’s then infant crude oil and natural gas sector. With the growth of North Seleyan Petroleum (NSP) and Jackson Energy into major energy giants, many have noted that the fact such tariffs remained in place was evidence of the influence of companies such as NSP and JE. MG Makinen clarified that compared to how the federal government had previously implemented tariffs, these new measures would be staggered: a 40% increase in 2 months, 80% in 4 months and 120% in 6 months. Nonetheless, the proposed 110% increase has drawn significant backlash from various fuel traders and importers as well as economists. The Berkwaki Fuel Traders Association, in a press release, noted that it contended that the administration’s approach represented an overcorrection which favoured symbolic policy gestures over the practical realities of maintaining a stable and affordable energy supply during the transition period. Steve Hensley, an energy economist with the Institute for Energy Policy, noted that despite the staggered implementation of tariffs, there will undoubtedly be a rush by importers to bring fuel into the country to be stored for later. “This is a classic case of intertemporal substitution. If fuel importers know that the price/cost of importing fuel will skyrocket in the future, they will shift much of their activity to the present. They [importers] will import as much as possible at the current lower tariff rate.” Hensley cautioned.

When asked by reporters whether the administration has considered the fact that the staggered tariff approach could lead to 'rush imports', President Hartman noted that the Harrington Company would likely impose a quota on imports set at the current level to avoid such a situation. “I have instructed MG Makinen and the Harrington Company to set a quota at the current, stable level with which fuel is imported into Lodamun. What we don’t want is importers rushing to import energy, and we [Federal Repositories and other private bunkering services] run out of space to hold what would have been a tidal wave of crude oil and natural gas.” President Hartman said. Governor of Berkwaki, Dillon York, expressed deep concern over the potential impact of such a decision on the state’s fuel-dependent economy. Berkwaki, often considered to be a downstream province, is perhaps the single most energy-dependent territory on the Seleyan continent. Much of the state’s wealth and economic growth can be directly attributed to the growth of the fossil-fuel-intensive downstream petrochemicals sector, which had been nurtured under successive state and federal governments. In a press conference at the Governor’s Mansion in Loxhampton, Governor York revealed that during the most recent Lodamese Governor’s Conference, he had a series of meetings with numerous members of the administration including President Hartman, Vice-President Grace Mitchell, Treasury Secretary Dr Ario Peterson, Commerce Secretary Calvin Skinner and CSD Director/National Coordinator for the Green Compact, Robert Aigar on where Berkwaki fits in the Green Compact. “In my discussions, I wanted to know whether the current administration will hold true to the promises made under his predecessor to support Berkwaki in this transition. Although I believe in it, many Berkwakians don’t, and I think part of that is due to the fact that they don’t see where they fit in. That is something I hope to speak on with support from the federal government in the coming days, if not weeks.” Governor York explained.

In a joint statement, MG Makinen and Commerce Secretary Skinner confirmed that when the tariffs begin to kick in, revenue generated from imports would likely go directly into a special-purpose fund intended to help fuel importers throughout the duration of the transition. The “Adjustment Fund”, as it has been coined, is intended to aid fuel traders/importers shift their operations into fuels that support the transition or which are viewed as an endpoint. “Part of the fund is looking to ensure we can help those fuel traders move into new areas such as CNG (compressed natural gas), Biofuels, Green Hydrogen and Ammonia. We recognise that there is a need to ensure that there is indeed a just transition, where no one is left behind.” Secretary Skinner explained.