Page images
PDF
EPUB

Tables A and B, below, provide an illustration of the control by leading companies over pipeline operations. Equity shares in the 20 largest crude oil and the 20 largest product pipelines have been tabulated for the four, the eight, the fifteen, and the eighteen largest oil companies. Absent accurate published data, actual 1975 throughputs in barrel-miles (i.e., the movement of one barrel of oil a distance of one mile) are employed as a proxy of the capacities of the 20 largest lines in each category.

It should be noted that two Canadian lines which fall within the 20 largest by ICC data are excluded both from the group and the industry total. Portland Pipe Line Corp. is the U.S. segment of a line which moves crude oil in bond from the harbor at Portland, Maine, to refineries in the Montreal area; it is owned by Canadian subsidiaries of Exxon, Gulf, Texaco, and Royal Dutch-Shell. Lakehead Pipe Line Co. is the U.S. segment of the Interprovincial Pipeline, constructed to carry crude from western Canada to leading U.S. and Canadian refining centers. A majority of the stock in the parent company, 58 percent, is spread among 19,000 stockholders. The remaining 42 percent, probably a controlling interest, is shared among the Canadian subsidiaries of Exxon, Gulf, and Royal Dutch-Shell.

Some 63 trunkline companies (excluding Portland and Lakehead) carried crude oil in 1975. The 20 largest of these accounted for 88 percent of the industry's total throughput in barrel-miles. Similarly, some 67 trunkline companies reported product shipments.129 The 20 largest, however, moved more than 86 percent of the industry total. Using throughputs as a substitute for unavailable capacity data, the control of the majors over the principal pipelines can be estimated by averaging the equity shares of the four, the eight, the fifteen and the eighteen largest oil companies in each line, weighted by the throughputs of the lines.

On this basis, the particularly strategic position of the major companies with respect to crude oil distribution becomes clearly evident. The four largest companies controlled 43 percent of the capacity of the twenty largest crude lines, the eight largest, 64 percent, the 15 traditional majors, 86 percent, and the 18 leading companies more than 96 percent.

In the case of products, the percentages, while still high, are considerably different. The four largest oil companies had less than 20 percent of the capacity of the leading lines, the eight largest had 48 percent, the 15 largest 71 percent, and the 18 leading firms, 75 percent. The contrast here to the crude transportation system is important. Six of the dozen leading product pipelines, and seven of the twenty, are not affiliated with major oil companies. Mapco and Hydrocarbon Transportation transport natural gas liquids and liquid ammonia. The other five carry traditional petroleum products: gasoline, fuel oil, jet fuel. These are the companies which demonstrate that nonintegrated independent pipelines are viable, efficient alternatives to major oil company control over transportation.

12 Note that the total of crude and product lines exceeds the number of pipeline com. panies. A number of companies, e.g., Exxon, Amoco, Marathon, and so forth, operate both crude oil and product pipelines.

[blocks in formation]

TABLE A.-MAJOR COMPANY CONTROL, 20 LARGEST CRUDE OIL PIPELINES-1975

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][graphic][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

1 Average equity in each of 20 largest lines, weighted by throughput barrel-miles.

Throughput
(million

TABLE B.-MAJOR COMPANY CONTROL, 20 LARGEST PETROLEUM PRODUCT PIPELINES-1975

Percent of equity owned by largest oil companies

barrel-
miles) companies

4

[blocks in formation]
[subsumed][merged small][graphic][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][ocr errors][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][subsumed][subsumed][ocr errors][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][subsumed][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

1 Average equity in each of 20 largest lines, weighted by throughput barrel-miles.

In 1977, the economic staff of the ICC studied the ownership characteristics of common carrier pipelines.130 The ICC staff categorized common carrier pipelines regulated by the ICC into three groups: 1. Independent Petroleum Pipelines; 2. Pipelines affiliated with major

180 Statement of David L. Jones, economist, Section of Motor, Pipeline and Water Carrier Analysis, Bureau of Economics, ICC, filed Apr. 28, 1977 in Valuation of Common Carrier Pipelines, ICC Ex parte 308.

oil companies that hold singly or jointly at least 50 percent control (defining "major oil companies as the 20 largest oil companies based on sales), and 3. Other petroleum company affiliated pipelines.

The ICC staff found that only ten pipelines subject to its jurisdiction do not transport crude oil or petroleum products produced or refined by an affiliated company.131 There are listed below: 132

[blocks in formation]

*Annual report form P (carriers by pipeline) to the Interstate Commerce Commission for year ended Dec. 31, 1975Schedules 108 and 109.

The staff found 59 of the ICC reporting pipelines to be controlled by major oil companies: 133

PIPELINES AFFILIATED WITH MAJOR OIL COMPANIES AS OF DEC. 31, 1975

[blocks in formation]

11 Id. at 8.

1 Id. appendix 1, part A. The ICC staff may have been in error with respect to three of the 10 lines listed. Belle Fourche Pipeline Co. is affiliated with True Oil Co., Caspar, Wyoming. Cheyenne Pipeline Co. moves crude oil from Weld County, Colorado to the Husky Oil Co. refinery at Cheyenne, Wyo., and appears to be owned by the leading stockholders in Husky. Trans Mountain transports Canadian crude from Edmonton, Alberta, to major oil company refineries in the Puget Sound area, and is owned in large part by U.S. major companies or their Canadian subsidiaries.

1 Id., appendix 1, part B.

PIPELINES AFFILIATED WITH MAJOR OIL COMPANIES AS OF DEC. 31, 1975-Continued

[blocks in formation]

PIPELINES AFFILIATED WITH MAJOR OIL COMPANIES AS OF DEC. 31, 1975-Continued

[blocks in formation]

1 Annual report form P (carriers by pipeline) to the Interstate Commerce Commission for year ended Dec. 31, 1975Schedules 108 and 109.

Skelley Pipeline Co. is a subsidiary of Skelley Oil Co. As of Dec 31, 1974, 75.53 percent of common stock of Skelley Oil was owned by Mission Corp. which is a subsidiary of Getty Oil (88.9 percent of voting stock).

Affiliate of Imperial Oil, Ltd., (32.8 percent) which is controlled by the Exxon Corp. Affiliate of Gulf Oil Canada, Ltd (7.08 percent).

Imperial Oil, Ltd., which is controlled by the Exxon Corp., has 32 percent interest in Montreal Pipeline Co., Gulf Oil Canada, Ltd., which is controlled by Gulf Oil Corp., has 16 percent interest in Mcntreal Pipeline Co., Ltd., Texaco Canada, Ltd., which is controlled by Texaco, Inc., has 16 percent interest in Montreal Pipeline Co., Ltd. BP has 10 percent interest in Montreal Pipeline Co., Ltd. Shell Canada, Ltd., has a minority interest.

L'A wholly owned subsidiary of Occidental Petroleum Corp.

« PreviousContinue »