|
ExxonMobil joins critics of tariff hike
Wesley Loy For Petroleum News
ExxonMobil is among parties lodging concerns about Cook Inlet Pipe Line Co.’s steep tariff hike.
Steven Serpati, on behalf of ExxonMobil, filed a brief public comment with the Regulatory Commission of Alaska on Dec. 18, the RCA Web site shows.
“ExxonMobil objects to the proposed tariff increase,” the comment said. “We request that the RCA review the justification, and the impact of the proposed 350% increase to the tariff. As a shipper on the line we need additional time and information to determine the validity of the increase.”
ExxonMobil holds a 75 percent working interest in the Chevron-operated South Granite Point unit, according to the latest Alaska Division of Oil and Gas annual report.
RCA approves hike The RCA, in a 12-page order issued Dec. 28, approved CIPL’s rate increase, at least temporarily, and invited oil producers or others to challenge it and possibly win refunds.
The order allowed the operator to start collecting $14.57 per barrel of oil effective Jan. 1. It’s a 259 percent increase over the previous rate of $4.06.
Petroleum News asked ExxonMobil’s Alaska spokesman, Bill Brackin, for an explanation of how his company put the rate hike at 350 percent as opposed to 259 percent. He was not able to reply by press time.
The RCA said that although the rate hike is “significant,” it appears CIPL calculated it “in accordance with” a methodology established in a 2001 state settlement the commission accepted.
Texas-based CIPL operates a 20-inch pipeline that runs 42 miles from Granite Point southwest along the western shore of Cook Inlet to the Drift River Oil Terminal, which also belongs to CIPL. The pipeline was installed in 1966.
Chevron subsidiary Unocal owns half of CIPL, while Pacific Energy Resources Ltd. holds the other half.
Others complain The RCA has received at least two other public comments critical of CIPL’s rate hike.
Cook Inlet Energy, which recently bought oil and gas assets on the west side of Cook Inlet from Pacific Energy, questioned how CIPL calculated the tariff increase and accused it of “unduly speedy recovery of expenses.”
Dan Donkel, an overriding royalty interest owner in Cook Inlet, also complained, noting among other things that he believes CIPL had insurance to cover the impact of last year’s volcanic eruptions at Mount Redoubt. If so, that should temper the tariff hike, he said.
CIPL attributes much of its rate increase to the eruptions, saying they caused extensive damage, idled the pipeline for much of 2009, and forced costly measures to protect the Drift River Oil Terminal and the crude oil that was stored there.
J. Patrick Nevins, a lawyer for CIPL, told the commission: “The proposed rate simply provides CIPL the opportunity to recover its actual costs and a reasonable return.”
| 