NEWS BULLETIN

January 12, 2008 --- Vol. 15, No. 3January 2008

High court declines to hear Exxon Mobil appeal

The U.S. Supreme Court refused Jan. 12 to consider a legal challenge from Exxon Mobil Corp. to a 2005 congressional provision on Alaska oil shipments that the company said cost it $125 million in refunds.

At issue was an accounting mechanism for valuing oil shipped through the Trans Alaska Pipeline System, which transports oil from Alaska’s North Slope. The Federal Energy Regulatory Commission uses the accounting method to value different qualities of crude oil that multiple shippers pump into the shared pipeline.

Several oil shippers have been involved in protracted legal proceedings over the valuations and Exxon said it was owed refunds from refiners who pumped lower-quality crude oil into the pipeline than Exxon did.

Congress stepped into the controversy in 2005, amending a transportation appropriations bill with a provision that limited Exxon's ability to seek retroactive refunds.

In its petition, Exxon told the Supreme Court that Congress improperly interfered with ongoing legal proceedings and abused its legislative authority. The oil giant said Alaska oil refiners encouraged their members of Congress to insert the provision so they wouldn't have to pay the rebates.

The Supreme Court declined the appeal without comment.

Note: See full story in the Jan. 18 issue of Petroleum News, which will be available online to subscribers Friday noon at www.petroleumnews.com.


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