2. PIPELINE STRUCTURE

Concentration in pipeline transportation is the highest of all segments of the oil industry. Thus in trunkline barrel-mile pipeline movements in crude pipelines in 1973 the top four petroleum companies controlled 48 percent; the top eight, 69 percent; and the top 20, 96 percent of the industry. For similar movements of products in 1973, the top four companies accounted for 35 percent, the top eight 59 percent and the top 20, 97 percent of the industry.119 In 1975 Colonial Pipeline Company alone accounted for 43.6 percent of total barrelmile pipeline movements of petroleum products in the United States. 120

Domination of pipelines by major integrated oil companies is not a new phenomenon. The oil companies have maintained their grasp over pipeline ownership from the very start of the existence of pipelines. For example, in 1933, a congressional report found that of 42 pipelines only 11 were not owned by the oil industry.121 This number obscured the full impact of oil company ownership, however. These independents accounted for only 0.58 percent of total capitalization, 5.63 percent of gross investment, and 18.50 percent of crude oil mileage.122 A further caveat is that eight of these independent pipelines were controlled by the Rockefeller interests.123

This control has persisted. Thus, as of 1938, 14 majors had 89 percent of the crude oil trunk mileage in the United States. 124 These same majors owned 96.1 percent of gasoline trunk mileage in 1938.125 By 1957, not much had changed. The 20 major companies owned or controlled 70.7 percent of crude oil pipeline mileage and 95.7 percent of product pipeline mileage.126

For the year 1975, the ICC reported 104 pipeline companies (including one coal slurry pipeline).127 A list of these pipelines is reproduced below, showing operating revenues, net income, total assets and annotated to reflect the products carried by each pipeline.1

119 ERC at 14.

129 ICC, Transport Statistics in the United States, Dec. 31, 1975 at 9.

128

Colonial Pipeline Company is a joint venture stock company owned by ten major integrated petroleum companies. Verified Statement of David L. Jones, economist, Bureau of Economics, ICC filed Apr. 28, 1977, in ICC Ex parte 308, Valuation of Common Carrier Pipelines, appendix 2 at 13.

12 Staff of House Comm. on Interstate and Foreign Commerce, Report on Pipeline, H.R. Rept. 2192, 72d Cong., 2d sess., 1933, at xxiv [Hereinafter cited as "Splawn"].

122 Id. at xxvii.

123 Id. at xxxiv-xxxvii.

124 Cook, Roy C., Control of the Petroleum Industry by Major Companies, Monograph 29. Senate Temporary National Economic Committee, Investigation of Concentration of Economic Power, 76th Cong., 2d sess., 1941 at 21 [Hereinafter cited as "Cook".]

125 Id. at 37.

126 Consent Decree report at 126.

127 ICC Transport Statistics in the United States, Part 6, Dec. 31, 1975.

1 Data from ICC, Transport Statistics in the United States, Part 6, Dec. 31, 1975, tables 2, 4, 5, and 6.