May 28, 2020: An executive order signed by US president Donald Trump on May 1 paving the way for a ban on the import or acquisition of ‘bulk-power system electric equipment’ could pose major challenges for the energy industry, says US law firm Akin Gump.
Executive Order 13920 says “The following actions are prohibited: any acquisition, importation, transfer, or installation of any bulk-power system electric equipment (transaction) by any person, or with respect to any property, subject to the jurisdiction of the United States, where the transaction involves any property in which any foreign country or a national thereof has any interest”, the order says.
It says projects already underway could be delayed, have to shoulder increased costs or even be unable to obtain vital equipment as a result.
Akin Gump says the executive order, which was registered on May 4, is unclear in its specific scope, however any new licensing regime or pre-approval mechanism that may have to be implemented as a result could “create significant compliance challenges for companies involved in industries dealing with bulk-power system electric equipment”.
S&P Global Platts, the energy and commodities market intelligence firm, said the order, coming after a September 2019 decision to add lithium-ion batteries to the products from China on which tariffs are imposed, “raises import issues related to certain energy storage equipment potentially with regard to China”.
The reasoning behind the order was, it read, that the president finds: “that foreign adversaries are increasingly creating and exploiting vulnerabilities in the US bulk power system, which … is a target of those seeking to commit malicious acts against the US and its people, including malicious cyber activities, because a successful attack on our bulk-power system would present significant risks to our economy, human health and safety, and would render the US less capable of acting in defense of itself and its allies …
“The unrestricted acquisition of bulk-power system electric equipment designed, developed, manufactured or supplied by persons owned by, controlled by, subject to the jurisdiction or direction of foreign adversaries augments the ability of foreign adversaries to create and exploit vulnerabilities in bulk-power system electric equipment, with potentially catastrophic effects.”