Scottish Professor Discusses History of Arab Pipelines

By Bissenova, Alima | Washington Report on Middle East Affairs, September 2000 | Go to article overview

Scottish Professor Discusses History of Arab Pipelines


Bissenova, Alima, Washington Report on Middle East Affairs


SCOTTISH PROFESSOR DISCUSSES HISTORY OF ARAB PIPELINES

On June 15, Paul Stevens, professor of petroleum policy and economics at the Center for Energy, Petroleum and Mineral Law and Policy at the University of Dundee, Scotland, discussed the history of the Arab transit pipelines and its implications for the prospective Trans Caspian pipeline routes at the Middle East Institute.

In recent years, he said, there has been a renewal of interest in transit oil and gas pipelines due to the necessity of transporting hydrocarbons from the landlocked Caspian region. However, he pointed out, the discussion over the prospective pipelines bringing Caspian oil to world markets suffers from two serious failures: "It either ignores the poor performance of transit pipelines in the past or, where problems are analyzed, the concentration is exclusively on politics."

Professor Stevens said he started analyzing problems associated with transit pipelines as early as 1980, immediately after Iraq's invasion of Iran, which caused considerable concern over oil supplies.

He studied the operating history of IPC (Iraq Petroleum Company) routes via Syria and Lebanon and via Turkey; IPSA (Iraq Pipeline Trans Saudi Arabia) via Saudi Arabia; the Tapline (Trans-Arabian Pipeline Company) from Saudi Arabia through Jordan, Lebanon, and Syria; and the later Transmed gas pipeline from Algeria via Tunisia to Italy.

Professor Stevens said that the first result of his study was, as he expected, that the operating record of most of the TransArab pipelines was very poor. ICP, IPSA and Tapline pipelines either had frequently been closed due to disputes over transition fees or off-takes amounts, or had been operating at very low capacity. The only exception was the later Transmed gas pipeline, which was inaugurated in May 1983 and had an exemplary operating history, even in view of the political turmoil in Algeria.

His second finding was that, surprisingly, the poor operating results had little to do with Arab politics. Most of the problems, in fact, proved to be economic rather than political.

Briefly explaining pipeline economics, Stevens said that there are two major rules of profitability:

The first rule is that "big is beautiful." One big pipeline carrying a certain volume is far more efficient than two pipelines carrying the same volume. From this purely economic point of view, Stevens said, "the theory of multiple routes is good for politicians but not for accountants."

The second rule is that "full is beautiful." Once a pipeline is built it needs to operate in its full capacity. In this respect, again, two half-full pipelines are bad news compared to one full pipeline carrying the same volume.

Another nuance on pipeline economics, according to Stevens, is that pipelines can lose huge amounts of money and still keep pumping. This is what economists call the "bygones rule," resulting from the fixed costs associated with securing rights of way and building the pipeline and pumping stations. It means that, even if the pipeline operates at a loss, it is still better to continue the loss-making operation, providing that variable costs are covered and some contributions to fixed costs are made. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Scottish Professor Discusses History of Arab Pipelines
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.