Estimating Multifactor Productivity in Pipeline Transportation, 1987-2004

This paper estimates annual multifactor productivity (MFP) in oil and gas pipeline transportation in the United States from 1987 to 2004. The data used for the estimations are based on the North American Industrial Classification System (NAICS). The basic data series were obtained from the Bureau of Labor Statistics and the Bureau of Economic Analysis. A new approach to land data inputs was applied using the methods and data from the Bureau of Labor Statistics as well as engineering requirements data from the pipeline industry. Two alternative approaches were applied to estimate pipeline sector MFP. The basic growth-accounting methodology and the Tornqvist index number approach were each applied to the final data set. MFP was calculated with both the growth accounting the Tornqvist index approach with the land inputs detailed as a separate input. Changes in MFP in the pipeline sector, and the large rise observed between 1998 and 2004, may be due to a number of factors. In examining the data used in estimated pipeline MFP, two trends are especially noteworthy. First is the large drop in annual hours worked from 120 to 86 thousand hours between 1998 and 2004, a drop of just under 30 percent. Second is the large drop in natural gas consumption from 751 to 572 billion cubic feet between 1997 and 2004, a drop of just under 25 percent. Both of these changes took place without declines in output. The pipeline industry relies on a system that for the most part was installed during the middle of the last century. However, despite the maturity of the system and its capital infrastructure, it appears that recent changes in the industry have allowed it to reduce labor and energy inputs in order to post large increases in productivity. One speculation is that increases in computerization have allowed reductions in personnel and more efficient use of energy, maximizing output in a mature industry.

• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Lawrence, Michael F
  • Skolnik, Jonathan
• Conference:
  • Transportation Research Board 87th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2008-1-13 to 2008-1-17
• Date: 2008

Language

• English

Media Info

• Media Type: DVD
• Features: Figures; References;
• Pagination: 18p
• Monograph Title: TRB 87th Annual Meeting Compendium of Papers DVD

Subject/Index Terms

• TRT Terms: Computers; Control systems; Energy conservation; Energy consumption; Gas pipelines; Infrastructure; Natural gas pipelines; Petroleum pipelines; Productivity; Service life; Social factors; Workforce
• Identifier Terms: North American Industrial Classification System
• Subject Areas: Design; Energy; Environment; Maintenance and Preservation; Pipelines; Society;

Filing Info

• Accession Number: 01089176
• Record Type: Publication
• Report/Paper Numbers: 08-2871
• Files: TRIS, TRB
• Created Date: Feb 27 2008 8:58AM