NEWS BULLETIN

September 14, 2009 --- Vol. 15, No. 73September 2009

FERC denies rehearing of useful life of trans-Alaska oil pipeline

The federal agency that oversees interstate shipments of crude through the trans-Alaska oil pipeline has rebuffed efforts by some shippers and the State of Alaska to keep alive the question of the remaining useful life of the 800-mile conduit.

In early September, the Federal Energy Regulatory Commission rejected requests filed by Anadarko Petroleum Corp., Tesoro Corp., Tesoro Alaska Co. and the state in the spring requesting a rehearing of the commission’s April 16, 2009, order. The commission said the protesters failed to show a basis why the commission should reopen its prior finding of the litigated issue of the end-life of the pipeline.

In the April 16 order, the commission accepted the pipeline owners’ proposed interstate shipping rates for 2007 and those proposed for the 2008 rate on an interim basis, subject to refund. The five-member panel also directed a FERC administrative law judge to hold a public hearing on most of the issues raised and to correctly calculate a 2008 interstate tariff for the pipeline. The five owners — BP Pipelines (Alaska) Inc., ConocoPhillips Alaska, Unocal Pipeline Co., Koch Pipelines (Alaska) LLC and ExxonMobil — appealed the ruling.

In the April 16 order, FERC also rejected earlier protests that the remaining useful life of the trans-Alaska oil pipeline should be reviewed in the 2008 rate hearing.

Anadarko-Tesoro and Alaska immediately sought rehearing on this point, citing several reasons why the commission erred and the remaining useful life of the pipeline continues to be a material issue of fact that should be addressed in the proceeding.

See story in Sept. 20 issue, available on line at noon Alaska time Friday Sept. 18, at www.PetroleumNews.com


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