Economic Planning and Analysis of Commercial Petroleum Pipeline Transport



Economic Planning and Analysis of Commercial Petroleum Pipeline Transport

Authors

W J Pienaar, University of Stellenbosch, ZA

Description

The paper represents an overview of an inquiry into and an investigation of economic aspects of commercial petroleum pipeline transport.

Abstract

Purpose - The paper represents an overview of an inquiry into and an investigation of economic aspects of commercial petroleum pipeline transport

Purpose - The paper represents an overview of an inquiry into and an investigation of economic aspects of commercial petroleum pipeline transport.

Originality/value - The potential value of the research lies mainly in (1) the proposed framework for the economic evaluation and planning of proposed new pipelines, (2) the developed guidelines for the economic regulation and pricing of the carriage of petroleum commodities by pipeline, and (3) the comparative analysis of the most salient economic features of the five modes of freight transport.

Design/methodology/approach ? An inquiry into and analysis of (1) the relative efficiency of petroleum pipeline transport, (2) steps in the economic planning and evaluation process, (3) pipeline operating costs, (4) cost control, and (4) prevailing pricing practices. The research approach and methodology combine (1) a literature and internet survey, (2) analysis of the cost structures of large commercial petroleum pipeline operators, and (3) interviews conducted with specialists in the petroleum refining and pipeline transport industries.

Results/findings - The following aspects of pipeline transport are analysed, discussed and concluded upon: (1) relative modal efficiency, (2) intermodal comparison of the most salient economic features, (3) sequential steps in the economic planning and cost-benefit analysis of a proposed pipeline, (4) market structure and ownership patterns, (5) cost structure, (6) management of costs, and (7) principles of efficient pricing.

KEY WORDS: Cost structure, economic evaluation, economies of scale, economy of density, efficiency, market structure, petroleum pipeline transport, petroleum products, pricing.

Publisher

Association for European Transport