Of the world's major petroleum pipelines, Tapline is the only one in direct competition with tankers. Since the line was built for one purpose - to transport Saudi Arabian crude oil at the lowest possible cost - Tapline can justify its existence, its continued operation, or any future expansion of its capacity only by remaining a competitive means of transportation, vis-a-vis tankers, between the Saudi Arabian oil fields, the Eastern Mediterranean and, ultimately, the major markets of Western Europe.

Tapline's position with respect to its tanker competitor has been a changing one. When Tapline began operations in 1950, most tankers were of a type built during World War 11. These ships could carry only 120,000 barrels of crude oil.

Since 1950, the tanker industry has achieved spectacular increases through the development of ever larger and faster ships. Tapline's typical competitor today is a partly automated vessel capable of moving nearly three times as much oil as the older ships and at less than half the cost. Even more efficient ships are now on the drawing boards. Looking ahead, Tapline can anticipate increasingly severe competition.

Meanwhile, demand for crude oil in the Western European market continues to increase; industry experts anticipate an annual average growth rate of 5 per cent through 1975 and total daily consumption, by then, of 10.5 million barrels, or about 82 per cent more daily than in 1964. A substantial portion of this increased demand is being met by oil from recently discovered fields geographically nearer to Western Europe than the fields of Saudi Arabia. Thus, if Saudi Arabian crude is to continue to enjoy the advantages of the overland short cut in maintaining or expanding its share of this growing market, Tapline must place even more emphasis on increased operating efficiency and cost control.

Development and efficient application of the latest pipeline technology, maintenance of a welltrained, dedicated group of employees, and reasonable, equitable levels of payments to governments of the transit countries will do much to guarantee that Tapline will continue to operate and to contribute to the economic development of the Middle East. The future is a challenge. It is also an opportunity.