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Providing coverage of Alaska and northern Canada's oil and gas industry
September 2010

Vol. 15, No. 36 Week of September 05, 2010

Cook Inlet tariff deal needs more time

The pending settlement of a tariff dispute on a west Cook Inlet oil pipeline is taking longer than expected to finalize.

In a “joint status report” submitted Aug. 30 to the Regulatory Commission of Alaska, lawyers for Cook Inlet Energy LLC and Cook Inlet Pipe Line Co. said the firms had been “overly optimistic” in projecting the filing of a settlement agreement by the end of August.

“CIE and CIPL continue in their settlement agreement negotiation and drafting efforts, and now estimate that they can have an executed settlement agreement filed, or know that their settlement efforts have been unsuccessful, by September 30, 2010,” the status report said.

Cook Inlet Energy objected

Anchorage-based Cook Inlet Energy, a small oil and gas producer on the west side of Cook Inlet, complained that CIPL’s 259 percent rate increase, to $14.57 per barrel, was excessive. The RCA allowed the rate hike to take effect at the outset of 2010, but only temporarily and subject to possible refunds.

Texas-based CIPL operates a 20-inch pipeline running 42 miles from Granite Point down the western side of Cook Inlet to the Drift River Oil Terminal.

CIPL attributed its rate increase largely to damage and disruption the erupting Redoubt volcano caused in 2009, idling west Cook Inlet oil production and the pipeline for months.

—Wesley Loy






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