Economies of scale and scope in expansion of the U.S. natural gas pipeline network

摘要: Abstract I analyze cost, capacity, mileage, and technical data for 254 U.S. natural gas pipeline projects over the period 1997–2012. Although project costs exhibit economies of scale capacity margin scope spatial margin, network expansion may not cost overall. That is, proportional increases in both transmission length (in miles) result a (or even greater-than-proportional) increase costs. Moreover, large (high-capacity pipelines spanning long distances) likely require installation compression horsepower, which has direct effects. My results suggest such significant diseconomies structure. As result, tariffs based on cost-of-service pricing present disincentive prospective customers to commit long-term contracts—which are necessary acquire regulatory permission build—particularly large, long-distance projects. The implication is that inhibit expansion, exacerbating congestion issues.