Water Carriers and Pipelines 293CASE 8-2CNG Pipeline CompanyAt the weekly brainstorming session, John Spychalski, president of CNG PipelineCompany (CNG), suggested that they build a new pipeline from Elizabeth, New Jersey,to the Midwest to move refined petroleum products, gasoline, and diesel fuel. Followingsome discussion, he asked the strategic planning group to consider the idea before thenext brown-bag session.Skip Grenoble, vice president for strategic planning, thought that John was not con-sidering the cost and impact of this idea. How could CNG obtain land to build the pipe-line, let alone obtain the necessary capital to finance the project? Then there was thequestion of the existing refineries located in Ohio, Indiana, and Illinois. Skip knewpetroleum products were being transported from the Gulf of Mexico refineriesvia barge and pipeline to the Midwest market areas currently.Skip turned over the project to Evelyn Thomchick, chief strategy analyst, to developa preliminary analysis of the viability of building a new pipeline. In the span of six daysEvelyn found the following strategic issues for the project:At least four Midwest refineries were being planned for closure within the nextfive years because of environmental and cost considerations.• A number of major refineries were considering building new refineries offshore,closer to the sources of foreign oil. Both cost and environmental considerationssuggested this consideration.• The New Jersey-Midwest corridor was one of the most-developed land regions inthe United States with the highest land values.• The demand for refined petroleum products was expected to increase, but thekeen interest in alternative sources of energy, new oil fields in several states, morefuel-efficient cars, and sustainability issues were matters of some concern.• The project would require approximately 10 years to complete, including the timeto obtain land via the eminent domain process.• The capital requirements for the project were estimated at $800 billion.CASE QUESTIONS1. Do you feel the project has any merit for further investigation? Why or why not?2. What likely impact will the new Shale oil fields in New York and Ohio have on theeconomic viability of this proposal?3. What is your political assessment of building a pipeline that will traverse five states?

1) Considering the feasibility studies conducted by Evelyn Thomchick, chief strategy analyst to…

CASE 8-2 CNG Pipeline Company At the weekly brainstorming session, John Spychalski, president of o Company (CNG), suggested that they build a new pipeline from Elizabeth to the Midwest to move refined petroleum products, gasoline, and diesel fu some discussion, he asked the strategic planning group to consider the id

CASE 8-2 CNG Pipeline Company At the weekly brainstorming session, John Spychalski, president of o Company (CNG), suggested that they build a new pipeline from Elizabeth to the Midwest to move refined petroleum products, gasoline, and diesel fu some discussion, he asked the strategic planning group to consider the id

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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