Friday, May 1, 2015
The National Propane Gas Association (NPGA), Airlines for America (A4A), and the Liquids Shippers Group, which represents 11 large oil and gas companies, filed a petition April 20 asking the Federal Energy Regulatory Commission (FERC) for increased transparency related to reporting transportation costs and revenues on the nation’s petroleum products and natural gas liquids pipelines. The petition may be viewed at www.npga.org/PipelineTransparencyFiling.
“The current system is like forcing a car shopper to buy a car without listing the miles per gallon, engine type, and estimated maintenance costs on the sticker,” said NPGA president and CEO Rick Roldan. “Similarly, shippers on the nation’s oil and liquids pipelines do not have the information they need to determine if the prices they are being charged are just and reasonable—a responsibility placed upon them by FERC.”
NPGA comments that about 7 Bbbl of propane, jet fuel, diesel, gasoline, fueloil, and petrochemical feedstocks are transported to market in the U.S. through 125,000 miles of pipelines every year. For the last 20 years, FERC has engaged in “light handed” regulation of these pipelines, and FERC does not review rate increases by pipeline operators unless a shipper on the line makes a convincing case that the pipeline is overcharging. Currently, oil and liquids pipeline companies are only required to report cost and revenue data on an aggregate basis, meaning a pipeline company may operate 10 separate pipelines, but it is only required to file a single report of the costs and revenues associated with the entire system. Without pipeline-specific data, shippers are unable to make determinations about the reasonableness of rates.
“It is time to increase transparency on the system,” Roldan asserted. “Ultimately, this issue affects nearly every American because pipeline transportation charges become part of the prices paid by all consumers, not only of fuels, but virtually every product sold in the United States.”
“The current system is like forcing a car shopper to buy a car without listing the miles per gallon, engine type, and estimated maintenance costs on the sticker,” said NPGA president and CEO Rick Roldan. “Similarly, shippers on the nation’s oil and liquids pipelines do not have the information they need to determine if the prices they are being charged are just and reasonable—a responsibility placed upon them by FERC.”
NPGA comments that about 7 Bbbl of propane, jet fuel, diesel, gasoline, fueloil, and petrochemical feedstocks are transported to market in the U.S. through 125,000 miles of pipelines every year. For the last 20 years, FERC has engaged in “light handed” regulation of these pipelines, and FERC does not review rate increases by pipeline operators unless a shipper on the line makes a convincing case that the pipeline is overcharging. Currently, oil and liquids pipeline companies are only required to report cost and revenue data on an aggregate basis, meaning a pipeline company may operate 10 separate pipelines, but it is only required to file a single report of the costs and revenues associated with the entire system. Without pipeline-specific data, shippers are unable to make determinations about the reasonableness of rates.
“It is time to increase transparency on the system,” Roldan asserted. “Ultimately, this issue affects nearly every American because pipeline transportation charges become part of the prices paid by all consumers, not only of fuels, but virtually every product sold in the United States.”
