Alaska judge places much higher taxable value on trans-Alaska pipeline
An Alaska Superior Court judge has more than doubled the assessed value of the trans-Alaska pipeline system, or TAPS, to $9.98 billion.
It’s a golden victory for state and municipal officials and their lawyers, who for years have been battling the pipeline’s oil company owners over the value of TAPS for the purpose of property taxes.
The 170-page ruling issued May 24 from Superior Court Judge Sharon Gleason concerns the assessed value of the 800-mile pipeline system only for the year 2006.
She put the value at $9.98 billion — just over half its estimated replacement cost, she said, and more than doubles the $4.3 billion the state Assessment Review Board had determined as the pipeline’s value for 2006.
Gleason’s ruling is lucrative for the state and municipalities including the Fairbanks North Star Borough, the city of Valdez and others. They stand to share in extra tax receipts for 2006 of roughly $113 million, about half of which would go to the state and half to the municipalities, said Jim Greeley, petroleum property assessor with the state Department of Revenue.
“The Department is pleased with the decision,” Greeley told Petroleum News in an e-mail today. “Though Judge Gleason changed the TAPS value determined by the Department in 2006, that change was based on new information in 2009, while the decision in its entirety largely upholds the Department’s methods, policies, practices, and calculations in administering the value of the TAPS.”
Gleason’s ruling comes after a nonjury trial over five weeks in the fall of 2009.
Lawyers for the state, the municipalities and the pipeline owners — BP, ExxonMobil, ConocoPhillips, Chevron and Koch Industries — continue to fight in court over the TAPS value for years subsequent to 2006.
Most recently, state officials assessed the pipeline’s value for 2010 at $9.2 billion, Greeley said.
Cook Inlet oil and gas lease sale draws $2.4 million
The state attracted eight bidder groups and drew 38 bids on 36 tracts in its 2010 Cook Inlet oil and gas lease sale, held this morning in Anchorage.
The $2,438,709 in apparent high bids is good for a Cook Inlet sale — only once since Cook Inlet areawide sales were instituted in 1999 has the area drawn more in high bids, that in 2006 when high bids in the sale totaled $2,857,846.
Leaseholders appeared to be filling in around existing lease positions, with acreage from the southern Kenai Peninsula to northwest of Anchorage on the west side of Cook Inlet receiving bids.
The high per-acre bid came from Cook Inlet Energy LLC, which bid $62 per acre for tract 555. Cook Inlet Energy also had the highest tract bid, $311,040 on tract 641, $54 per acre. Cook Inlet Energy also had the highest total in apparent high bids, $908,800 for seven tracts.
A bidding partnership of Samuel Cade 75 percent and Daniel Donkel 25 percent had the second highest total of apparent high bids, $461,837 on nine tracts.
Buccaneer Alaska LLC had high bids of $267,760 on four tracts, while Escopeta Oil Co. had high bids of $267,405 on seven tracts.
Paul Craig had apparent high bids of $199,373 on four tracts and Nordaq Energy bid $145,914 for two tracts. Monte Allen bid $70,226 on two tracts; a bidding group in which Samuel Cade held 50 percent bid $59,040 on one tract; and Armstrong Cook Inlet bid $58,349 on a single tract.
Editor’s note: See stories in the May 30 issue of Petroleum News, available online to subscribers at noon Alaska-time on Friday, May 28.
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