BP agrees to pay Valdez tanker tax

The Associated Press

City officials in Valdez, Alaska, reached what they are calling a preliminary settlement with the state's largest shipper of Alaska crude oil over a personal property tax it has attempted to impose on oil tankers.

BP Pipelines (Alaska) Inc. has agreed to pay the city an average of about $2.5 million a year until 2012. At least two other shipping companies are continuing to fight the tax in court. The settlement, reached on behalf of Alaska Tanker Co., following four years of negotiations and was announced by city attorney Bill Walker during a special meeting of the Valdez City Council.

In November 1999, the city moved to impose a tax on all vessels 95 feet or longer. Military vessels, cruise liners and fishing vessels were exempt.

BP and Alaska Tanker Co. was among five transporters of Alaska crude who filed a lawsuit in 2000. Other companies included were Tesoro Alaska Co.; Crowley Marine Service Inc.; Polar Tankers Inc., which is subsidiary of ConocoPhillips; and SeaRiver Maritime Corp., which is a subsidiary of Exxon Mobil.

Tesoro and Crowley have since withdrawn from the lawsuit and Polar Tankers and SeaRiver Maritime have not settled.

The actual payments to the city will vary over the coming years, ranging from a low of $800,000 in one year to a peak payment $3.1 million in 2007.

BP spokesman in Anchorage, Daren Beaudo, said Sept. 10 that the two sides still have details to work out before reaching a final agreement. But the company decided it would rather settle than continue to fight the issue in court, Beaudo said.

“It's better for us; it's better for the city,” he said.

The Valdez City Council unanimously approved the agreement Sept. 5.