United States petroleum pipelines: an empirical analysis of pipeline sizing

Technical Report · Mon Dec 01 04:00:00 EST 1980

OSTI ID:7087417

Coburn, L L

The United States Petroleum Pipelines: An Empirical Analysis of Pipeline Sizing Study (Study) uses data gathered by the Department of Energy (DOE) to test whether the operations of any petroleum pipeline fall within the petroleum pipeline undersizing theory hypothesized by the Department of Justics (DOJ). The study was undertaken in response to legislative and agency rulemaking proposals that could require the divestiture of petroleum pipelines by their oil company owners. The undersizing theory hypothesizes that integrated oil companies have a strong economic incentive to size the petroleum pipelines they own and ship over in a way that means that some of the demand must utilize higher cost alternatives. The DOJ theory posits that excess or monopoly profits are earned due to the natural monopoly characteristics of petroleum pipelines and the existence of market power in some pipelines at either the upstream or downstream market. The theory holds that independent petroleum pipelines owned by companies not otherwise affiliated with the petroleum industry (independent pipelines) do not have these incentives and all the efficiencies of pipeline transportation are passed to the ultimate consumer. Integrated oil companies, on the other hand, keep these cost efficiencies for themselves in the form of excess profits.

• Research Organization: Department of Energy, Washington, DC (USA). Office of Competition
• OSTI ID: 7087417
• Report Number(s): DOE/PE-0024
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
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022000 -- Petroleum-- Transport
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29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
ADMINISTRATIVE PROCEDURES
COMPETITION
DATA ANALYSIS
ENERGY SOURCES
FOSSIL FUELS
FUELS
HYDRAULIC TRANSPORT
INDUSTRY
INVESTIGATIONS
LEGAL ASPECTS
MONOPOLIES
OWNERSHIP
PETROLEUM
PETROLEUM INDUSTRY
PIPELINES
PRICES
PROFITS
SIZE
TRANSPORT
VERTICAL DIVESTITURE