Pipeline basics

 

About Pipelines

Pipelines deliver energy from where it’s produced to where it is turned into useful fuels and products and on to our local communities. Energy products delivered by pipeline include crude oil, refined products such as gasoline and diesel, and natural gas liquids such as ethane and propane.

Pipeline 101

Information on how pipelines work, how they are constructed and what pipeline operators do to keep them safe.

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U.S. Map of Pipelines

An interactive map of the United States showing the locations of crude oil, gasoline and diesel, and natural gas liquid pipelines across America.

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FERC and Pipeline Rates

The rates pipelines charge for interstate transportation of crude oil and petroleum product shipments of their customers are regulated by the U.S. Federal Energy Regulatory Commission(FERC). Oil pipelines are not public utilities or natural monopolies, as they operate in more competitive, dynamic markets.  Therefore, utility-type cost-of-service ratemaking is rarely used, as competitive pressures help to discipline oil pipeline rates.  In the Energy Policy Act of 1992, Congress mandated that oil pipelines be subject to a “simplified and generally applicable” ratemaking methodology, which led to FERC’s implementation of an oil pipeline rate index used by most pipelines.  Many oil pipelines also charge market-based rates and rates set through negotiations with their customers.   
  
 

Pipeline Construction

Pipelines are built when energy is produced in new regions of the country. More energy production means new pipelines are needed to deliver this energy and its benefits to consumers. Pipelines are designed for their operating conditions, constructed with quality certified steel, assembled with qualified personnel and pass multiple inspections before operation.

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