Will the power of markets or the power of government prevail in the debate over reversing the flow of part of the Laurel Pipeline?
As previously noted, Buckeye Partners is seeking Pennsylvania Public Utility Commission approval to bifurcate the flow of the cross-state pipeline that now delivers gasoline, diesel and jet fuel from the Philadelphia area to Western Pennsylvania.
Buckeye, citing a nearly 67 percent drop in fuel deliveries since 2014, wants to reverse the flow from Pittsburgh to Altoona. It says it can supply more product to the region and at a lower price from refineries in the Midwest.
Critics argue that the reversal would create a monopoly situation and raise fuel prices. The Laurel Pipeline is the only one delivering Philadelphia-area product to our region, they stress. And those Philadelphia-area refineries, already struggling, fear the loss of the Altoona-to-Pittsburgh business could be their death knell.
But The Philadelphia Inquirer reports that other market forces – such as falling world oil prices and the disappearance of discounted domestic crude arriving by rail – already had made those refineries far less economical.
There are, of course, many more moving parts in this equation. But the bottom line should be that the PUC allows markets, not government, to determine winners and losers.
After all, government’s track record in attempting to do so is abysmal.
About 60 countries now have privatized air traffic control systems. And Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure committee, once again is pushing for that very change in the United States.
This has resulted in the usual wails and cries and gnashing of teeth that a privatized system will result in either less-safe flying skies from an operational standpoint, invite more terrorism, cost consumers more or all three. Others claim the U.S. system is too large to effectively privatize. Still others claim the system is too large to be effectively managed by government.
But the foreign record is good. Analysts point to Canada’s privatized system – known as NAV-Canada – as a model for the United States.
“By removing the function from the clutches of government budget restraints and political-driven appropriators, NAV-Canada has been able to rapidly upgrade its technologies and practices and to implement those with considerable success,” writes Dan Reed at Forbes.com.
That’s been a foreign concept to the U.S.’s Federal Aviation Administration.
“(T)he FAA has become the laughing stock of the global air transportation management world for its chronic false starts, delays, missed deadlines and misunderstandings of what’s actually needed or possible in terms of air traffic control modernization,” said Reed, who for years covered aviation at USA Today.
Shuster’s bill – the Aviation Innovation, Reform and Reauthorization Act — would continue to fund the FAA until 2022. Then a newly created self-funding corporation – nonprofit and nongovernmental – would assume air traffic control duties.
Similar proposals have been batted about for years in Washington. But it’s clear that the current system has not kept pace with available technology.
All that said, Reed reminds that such a transition would not be easy. The Trump administration has, unfortunately, oversold the ease of that transition and misstated some of the basic facts, which has made the proposal something of a sitting duck at which critics continue to take shots, he says.
And then there’s this:
“There’s lots of political pork associated with this nation’s (air traffic control system) today,” Reed notes. “We have more physical facilities than necessary and not all of them are situated optimally.
“So some members of Congress are going to have to be convinced that voting for a bill that likely will result in a loss of high paying government jobs in their district is a good thing.
“That’s a tough sell.”
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
