Bibliographic Citation
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Title | Energy policy study. Volume 11. Federal pipeline regulation |
Creator/Author | Berlin, B.P. |
Publication Date | 1980 Aug 01 |
OSTI Identifier | OSTI ID: 5234629 |
Report Number(s) | DOE/EIA-0201/11 |
Resource Type | Technical Report |
Research Org | Department of Energy, Washington, DC (USA). Energy Information Administration |
Subject | 020700 -- Petroleum-- Economics, Industrial, & Business Aspects ;030600 -- Natural Gas-- Economic, Industrial, & Business Aspects ;294002 -- Energy Planning & Policy-- Petroleum ;294003 -- Energy Planning & Policy-- Natural Gas ;293000 -- Energy Planning & Policy-- Policy, Legislation, & Regulation; ;NATURAL GAS-- TRANSPORT;PETROLEUM-- TRANSPORT;PIPELINES-- DEREGULATION;PIPELINES-- REGULATIONS; ECONOMIC IMPACT;MARGINAL-COST PRICING;MONOPOLIES;NATIONAL GOVERNMENT;PRICES |
Related Subject | ENERGY SOURCES;FLUIDS;FOSSIL FUELS;FUEL GAS;FUELS;GAS FUELS;GASES;PRICES |
Description/Abstract | The technical characteristics of natural gas and petroleum pipelines are such that, in the absence of Federal regulation, each pipeline company could possibly, according to traditional economic analysis, behave as a natural monopolist.^Federal regulation of these pipelines probably has, therefore, generally resulted in slightly greater supplies of the delivered produce (at slightly lower prices) than would have occurred in the absence of those regulations.^In addition to the cases of regulation and no regulation, two alternative forms of possible Federal pipeline regulation are presented.^Specifically, regulation which would attempt to approximate a competitive solution could do so with the adoption of average cost pricing.^This would result in some efficiency losses, since, at that output, marginal cost is less than price.^To achieve maximum efficiency (i.e., maximum output for a given amount of inputs) the regulation would need to require marginal cost pricing.^But since marginal cost pricing would result in losses for the firm, a subsidy would be needed for the firm to survive.^On the other hand, regulation which would attempt to induce competition among pipelines would probably also result in efficiency losses, since pipelines competing in an area would necessrily be smaller than a more efficiently-sized monopoly; hence, the result would be higher prices and lower output than would result under the monopoly solution.^If deregulation of the pipeline industries were to occur, the petroleum pipeline industry would probably enjoy fewer competitive gains from deregulation than the gas pipeline industry would.^This would result because present oil pipeline regulations do not, unlike gas pipeline regulations, restrict entry and because oil pipeline regulations have produced unusually high rates-of-return on equity for the stockholders of those pipelines. |
Country of Publication | United States |
Language | English |
Format | Pages: 63 |
Availability | NTIS, PC A04/MF A01. |
System Entry Date | 2001 May 13 |
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