Rulemaking Comment of Association of Oil Pipe Lines under RM03-8.

80% of the crude oil and petroleum product moved by pipeline in the United States. AOPLs comments represent the views of the petroleum pipeline industry. Comments I. Quarterly Filings By Jurisdictional Oil Pipeline Companies Will Not Achieve the NOPRs Stated Goals. The Commission proposes to modify its regulations to establish quarterly reporting and revised annual reporting for oil pipelines. This proposal will increase the cost structure for the oil pipeline industry without necessarily providing the benefits desired by the Commission. Among the stated reasons for issuing this Notice of Proposed Rulemaking and proposing these burdensome requirements is that the Commission has determined that dependable, affordable, competitive wholesale energy markets require an adequate infrastructure, balanced market rules, and vigilant oversight. The oil pipeline market place is not a wholesale energy market and is already very competitively driven. This is evidenced by the number of oil pipelines earning below cost-of-service allowed levels, as well as the few oil pipeline cases brought before the Commission. The stability of the oil pipeline marketplace is further reflected in the very small percentage of manpower that the Commission is required to dedicate to oil pipeline regulation compared to the other industries it regulates. The Commission itself recognized its differing oversight responsibilities with respect to oil pipelines when it 2 adopted the current simplified and streamlined ratemaking structure in Order Nos. 561 and 561-A.1 The Commissions Notice of Proposed Rulemaking in this docket also mentions a number of specific benefits anticipated to be gained from these proposed financial reports, including measuring effects of regulatory initiatives, assessing the economic consequences of transactions, and evaluating the adequacy of existing traditional cost- based rates. These goals are unlikely to be achieved with respect to oil pipelines. First, the Commission engages in few regulatory initiatives that affect oil pipelines, other than adjustments to the index. Most changes to oil pipeline policy are case driven and move deliberatively through the administrative process. Changes to the index, such as the recent welcome revision to the oil pipeline rate index,2 can be readily seen in the number of tariff filings following the issuance of the Commissions order on the index. Once rate changes are made in response to an index change, few additional tariff filings take place. Oil pipeline financials are therefore highly unlikely to change significantly on a quarterly basis. Oil pipelines also do not engage in transactions such as purchase and sale agreements of the ...