ABSTRACT
Great Lakes in U.S. territory . This pipeline delivers o i l to refining
centers along its route in the United States and the remaining o i l to the
Sarnia refining complex in southern Ontario. Since o i l exports from
Canada to the United States are subject to an import duty, the o i l in
transit through the Interprovincial Pipeline and destined for Canadian
consumption in Sarnia is shipped "in bond" through the United States and
is therefore exempt from import duty. A very simple way to represent
shipments in bond would be to have two parallel pipeline routes repre
senting the Interprovincial Pipeline, one with outlets to the various
delivery points in the United States and the other with no outlets prior
to reaching the Canadian border at Sarnia. The flows through the former
pipeline would be subject to an import duty upon entering the United
States while the flows in the latter would be exempt.
