Abstract

The U.S. shale boom has profoundly increased crude oil movements by both pipelines–the traditional mode of transportation–and railroads. This paper develops a model of how pipeline investment and railroad use are determined in equilibrium, emphasizing how railroads' flexibility allows them to compete with pipelines. We show that policies that address crude-by-rail's environmental externalities by increasing its costs should lead to large increases in pipeline investment and substitution of oil flows from rail to pipe. Similarly, we find that policies enjoining pipeline construction would cause 80-90% of the displaced oil to flow by rail instead.


Original document

The different versions of the original document can be found in:

https://www.ssrn.com/abstract=3353481,
http://www.nber.org/papers/w23855.pdf,
https://ideas.repec.org/p/nbr/nberwo/23855.html,
https://econpapers.repec.org/RePEc:nbr:nberwo:23855,
https://m.nber.org/papers/w23855,
https://academic.microsoft.com/#/detail/2760500816


DOIS: 10.2139/ssrn.3353481 10.3386/w23855

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Published on 01/01/2019

Volume 2019, 2019
DOI: 10.2139/ssrn.3353481
Licence: CC BY-NC-SA license

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