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The history of regulation for crude oil and liquids pipelines goes back to the first regulation of the railroads in the 1800s. A fear of a monopoly by the few railroads in existence prompted the US government to form the Interstate Commerce Commission. The body was later given jurisdiction over interstate crude oil pipelines based upon the same monopoly fears. Today, that responsibility lies with the Federal Energy Regulatory Commission (FERC).
Under federal regulations, pipelines must file “just and reasonable” rates and provide access to any shipper requesting space, if available.
The following mini-lecture provides a brief summary of the history of regulation in the crude oil pipeline industry.
Key Learning Points for the Mini-Lecture: Crude Oil Regulation
- All crude, natural gas, and liquids pipelines in the US are regulated by the federal government.
- The Federal Energy Regulatory Commission (FERC) replaced the Interstate Commerce Commission as the regulatory body for crude oil pipelines.
- “Common carrier” status
- Non-utility vs. natural gas pipeline utility status
- Rate schedules – “tariffs”
- Safety issues – all pipelines are regulated by the Department of Transportation
- Pipelines must post all tariff information on a website.
- "Open access"
- Monopoly vs. competition
John A. Dutton e-Education Institute