Chapter 1: Workable Competition and Allocative Efficiency in Deregulated U.S. Petroleum Pipeline Markets: Since 1990, the Federal Energy Regulatory Commission (FERC) has quietly and gradually removed price controls from oil pipeline segments through its ``market-based rate" program. Outside of individual rate cases, the FERC has not reviewed the success of this program in terms of efficiency improvement. I argue that, despite the lack of quantity data, market power and efficiency in transportation markets can be detected using available commodity price and sales data. Using a novel dataset linking oil pipeline rates and services to wholesale refined products prices, I study (1) the rate effects of oil pipeline deregulation, (2) whether deregulated pipelines exercise market power, and (3) whether deregulated rate signals result in improved allocative efficiency on deregulated lines. I find that deregulated carriers gradually increased rates up to 10 percent, or an average 5.7 percent, over the first five years. However, because commodity prices remained constant and sales increased in destination markets, the higher rates do not lead to the conclusion that firms set their deregulated rates supracompetitively. Instead, I offer evidence that rate deregulation led to efficiency improvement by allowing more higher-valued commodities to pass through the capacity constrained pipeline network in both Chicago and the broader U.S. pipeline market.Chapter 2: Spillovers of Mixed Regulation: Evidence from U.S. Petroleum Pipeline Markets: U.S. regulatory policy of oil pipeline markets produces mixed markets where regulated firms compete with unregulated firms. In this paper, I present a novel 35-year monthly panel of pipeline services including commodity-specific refined products consumption, refinery production, and waterborne movements. Using these data, I analyze two types of spillovers in partially regulated pipeline markets: spillovers within firm and spillovers across firms. I find when capacity-constrained firms are only partially deregulated, they set rates above the competitive level. Similarly, when deregulated firms compete against regulated firms, they can monopolize residual capacity in the market and reduce market efficiency.Chapter 3: Regulatory Threat Under Administrative Litigation: Though firm behavior under price regulation has been studied extensively in economics, law, and policy, few opportunities arise to study firm behavior under just the threat of such regulation, a potentially effective force alone. This paper extends the Glazer (1992) model of regulatory threat to the administrative litigation setting where bureaucratic commissioners, not legislators, decide whether to regulate rates of service providers in disputes between stakeholding parties. I find that firms should decrease their rates when they believe their regulators would rule against them in a complaint case. I empirically test the predictions of this model using FERC's 2012 challenge to deregulated rates, a perceived shift in its regulatory stance, but find that firms appear to increase prices in their most vulnerable markets.
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