The emergence of public policy in respect of Canadian crude oil trunk pipe lines
Creators: name: Mitchell, Charles Lindsay
Publisher: name: University of British Columbia
Year: 2011

description: In the decade of the nineteen fifties a major crude oil pipe line network was established in Canada by private enterprise operating under the federal jurisdiction and that of the three prairie provinces. During this period few clear statements of public policies towards these pipe lines were enunciated. The object of this dissertation is to ascertain selected policies that were followed by government to facilitate the construction of the pipe line network and to evaluate the efficacy of these policies for the future so that they may best serve the Canadian public. To provide a background for the study, the broad economic and political environment in which policies were formulated was examined along with the impact of this environment on the oil industry. The physical growth of oil pipe lines was presented by examining their construction from 1913 to 1959. During the last ten years, the pipe line fill of Canadian oil trunk pipe lines increased from sixty-eight thousand barrels to eight million one hundred and fifty-nine thousand barrels, indicating the significance of the growth. The investment in the industry, the sources of funds for its growth and the financial success attended to this investment were reviewed for the decade ending on December 31, 1959. During this period the investment in crude oil trunk pipe lines exceeded three hundred and sixty million dollars, with the major portion of the funds derived from bond issues. The average financial returns to the shareholders of pipe lines was approximately double that of a large sample of Canadian public companies. Since oil pipe lines are an integral part of the petroleum industry, the financial relationship between the industry and the crude oil trunk pipe line companies were examined. With a few exceptions a close relationship was found to exist, encouraged by government policy. To determine the government policies evidenced by statute, the relevant statutes of the appropriate governments were examined. Although some policies regarding pipe lines were found to have been implemented in the statutes, few of the statutory powers granted to regulatory bodies had been exercised. From the preceding evidence, supplemented by statements by government and regulatory agencies it was concluded that Canadian Governments had formulated the policy that crude oil trunk pipe lines were to be operated by private enterprise, represented in large part by other sectors of the petroleum industry, acting as common carriers and holding the status approximating that of public utilities. There appeared a slight indication that federal government policy favoured active regulation by the National Energy Board but no indication that this policy was being practised. The regulatory agencies under provincial jurisdiction appeared to take little active interest in crude oil pipe lines, and presumably reflected the attitudes of the provincial authorities. There was no indication of the method or extent of rate regulation that has or will be applied to any Canadian crude oil pipe line.