Liquid Pipeline Rates By Origin and Destination - Tracking Trends Over Time
In an August 14 press release , we announced our acquisition of the leading liquids pipeline rate and tariff data company. Our customers who need to understand the costs for shipping liquids are now just clicks away from reviewing thousands of rates and tariffs on intrastate and interstate pipelines across the U.S. and Canada. They can now quickly focus on transportation dynamics between any origin and destination point pair, at the state, county or specific point level.
Today we look at how a customer could use this data to compare the costs of moving a specific product between two regions of the country. Our customers would typically then turn to LawIQ’s advisory services team to conduct follow-on analyses to, for example, gain an understanding of how the applicable rate structures of two competing pipelines have changed over time, and would then be able to compare those changes to the changes in the FERC’s rate index over that same period. Quickly understanding these relationships can help with competitive negotiations, business development analysis, and financial forecasting.
Critical Industry Information at Your Fingertips
As with all of LawIQ’s data sourcing, the tariff information for liquids pipelines is publicly available. But like most publicly available information, this information is not readily accessible or in a format that makes it commercially useful. That is where our platform comes in for natural gas projects and pipelines and, with our new acquisition, oil rate and tariff information. We extract key information and parse it into structured formats, allowing our customers to easily retrieve the most critical data needed to inform essential business decisions.
Crude and products tariff rules and rate information have been especially challenging -- until now. For example, if you wanted to move refined products by pipeline from Harris County, Texas to Lake County, Indiana, or market to those that do, you could scour hundreds of websites to identify pipelines in each of those two locations and then look up the tariffs for each of those pipelines. Even industry veterans with deep network knowledge would still need to identify which tariffs cover those points, find the currently effective documentation, and then review the relevant filings, looking for the exact points and relevant rates or charges. So, even if you knew that Explorer Pipeline (Explorer) and Enterprise TE Products Pipeline (TEPPCO) served these origin and destination points, you would still need to locate the applicable tariff among all those they have filed and determine the specific origin and destination points. Alternatively, you can find all of this information in a few clicks in our new liquids platform:
Total Delivered Costs
Often, finding the applicable tariff rate, however, does not provide a total “all-in” cost of using the pipeline for a particular movement. Many pipelines impose special charges to particular movements which are often buried in their rules or manuals. LawIQ’s liquids platform makes these charges readily accessible to the user to allow for an easy comparison of the total costs of using two pipelines. For instance, between Harris County, Texas to Lake County, Indiana, both Explorer and TEPPCO impose extra charges for those movements. The rate structures of refined products lines can be complicated, depending on the commodity, location, or handling requirements, so evaluating these charges becomes an important exercise. In this case, Explorer imposes a loss allowance, whereas TEPPCO does not. Thus, the final comparable all-in cost between the two will differ based on the value of the product being shipped.
Explorer Extra Charges
TEPPCO Extra Charges
Historical Data is Also Available
While the LawIQ platform will enable you to quickly access the current applicable tariff rate for any movement in the country, the platform also includes over 30 years of tariff rate history. By comparing how the tariff rates have changed over the years, business development and optimization teams can understand the competitive forces at work in a market, and analysts can evaluate the forecasted financial strength of a pipeline company and its assets, and determine whether the rates have fluctuated due to competitive pressures.
In the graph below, we compare the rates for this same Texas to Indiana path for Explorer and TEPPCO over the last five years, and compare that to the FERC rate index for the same time period. As shown below, TEPPCO has not increased its uncommitted base tariff rate nearly as fast or as often as has Explorer.
If access to this type of data analysis can help with faster or more strategic decisions, or if you would like to see other historical comparisons, please contact us.
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