15 AAC 55.171. Prevailing value for oil, or commingled oil and NGLs

(a) The prevailing value for oil, or commingled oil and NGLs, produced in the Alaska North Slope area ("ANS") and delivered to the United States West Coast, including Hawaii, is

(1) for oil, or commingled oil and NGLs, that are transferred by the producer in an arm's-length, third party sale, the average spot price for ANS at the United States West Coast during the month that is referenced in the sales contract pricing provision; if more than one month is referenced in the sales contract pricing provision, the month with more daily spot price reports that fall within the contract price reference period must be used; in the case of an equal number of spot price reports, the month closer to the month of production must be used; if the sales contract has no price reference period, the prevailing value determined under (3) of this subsection must be used;

(2) for oil, or commingled oil and NGLs, that are transferred by the producer in an arm's-length, third party exchange, the average spot price for ANS at the United States West Coast during the same month that is applied under 15 AAC 55.161(c) to the crude received in the exchange; if the department cannot determine the month in which the crude was received, the prevailing value determined under (3) of this subsection must be used; or

(3) for other oil, or commingled oil and NGLs, including that which is refined, used as fuel or petrochemical feedstock, or otherwise consumed at a refinery or plant owned by the producer, the average spot price for ANS at the United States West Coast during the month of delivery of that oil, or commingled oil and NGLs.

(b) Repealed 1/1/2000.

(d) Repealed 1/1/2000.

(e) Repealed 1/1/2000.

(f) The prevailing value for ANS sold in the state at tidewater or delivered to coastal refineries in the state is the prevailing value determined in (a) of this section minus the volume-weighted average location differential between the Port of Valdez and the United States West Coast provided for under contracts for the sale of ANS delivered in the state during the previous calendar year. The department will calculate the annual volume-weighted average location differential by analyzing contracts entered into during the 18-month period ending November 30 of the previous calendar year for the sale of producers' ANS delivered in the state. The department will use contracts that it has received from producers by January 15 of the current calendar year. The department will calculate the location differential and the number of barrels delivered under each contract. The differential for each contract will be multiplied by the total number of barrels delivered under that contract. The resulting totals for all contracts will be added together, and that sum will be divided by the total number of barrels delivered under all of the contracts. The resulting location differential is a per-barrel amount. The department will provide notice to the producers of the amount of the location differential no later than February 10 each year.

(g) The prevailing value for ANS sold at Trans Alaska Pipeline System ("TAPS") pump station number one or sold at the entrance to a publicly regulated pipeline other than TAPS is the prevailing value determined in (f) of this section minus the carrier ownership-weighted average of all applicable publicly filed pipeline tariffs and the quality bank differentials, not including the TAPS Valdez Marine Terminal Quality Bank, for oil, or commingled oil and NGLs, produced from the relevant lease or property and transported between the location of sale and the TAPS terminal in Valdez. If a carrier has more than one applicable publicly filed pipeline tariff, the lowest tariff filed by that carrier must be used in calculating the carrier ownership-weighted average.

(h) The prevailing value for ANS delivered to an inland refinery in the state is the prevailing value as determined in (f) of this section, minus the carrier ownership-weighted average of all applicable TAPS tariffs and the quality bank differentials, not including the TAPS Valdez Marine Terminal Quality Bank, for oil, or commingled oil and NGLs, transported between TAPS pump station number one and the TAPS terminal in Valdez, plus the carrier ownership-weighted average of all applicable publicly filed pipeline tariffs and the per-barrel quality bank adjustments for oil, or commingled oil and NGLs, transported between TAPS pump station number one and the refinery. If a carrier has more than one applicable publicly filed pipeline tariff, the lowest tariff filed by that carrier must be used in calculating the carrier ownership-weighted average.

(i) Repealed 1/1/2004.

(j) Repealed 1/1/2004.

(k) The prevailing value for oil, or commingled oil and NGLs, produced in the state and delivered to a location other than those specified in (a) or (f) - (j) of this section is the value of comparable crudes delivered to the same market, as adjusted for quality and location and measured by indices of current market value.

( l ) Repealed 1/1/2000.

(m) For purposes of this section, the average spot price for ANS at the United States West Coast during a month is the average of the monthly average assessments for the month by Platt's Oilgram Price Report, Telerate online data providing service, and Reuters online data providing service, calculated to three decimal places using the automatic convention in the rounding command or function in commercially available software. If Platt's Oilgram Price Report, Telerate online data providing service, or Reuters online data providing service ceases to report daily assessments for ANS at the United States West Coast, the average spot price for ANS at the United States West Coast is the average of the monthly average assessments by all remaining reporting services. In this subsection, a monthly average assessment for a month is the average of the midpoints between a reporting service's high and low closing assessments for ANS at the United States West Coast for all days during the month for which closing assessments are reported.

(n) Repealed 1/1/2000.

History: Eff. 1/1/95, Register 132; am 1/1/2000, Register 152; am 11/1/2000, Register 156; am 1/1/2002, Register 160; am 1/1/2003, Register 164; am 1/1/2004, Register 168

Authority: AS 43.05.080

AS 43.55.020

AS 43.55.110

Editor's note: Platt's Oilgram Price Report is published by McGraw-Hill, Inc., 1221 Avenue of the Americas, New York, New York 10020. Telerate online data are provided by Moneyline Telerate, 233 Broadway, 24 th Floor, New York, New York 10279. Reuters online data are provided by Reuters, Three Times Square, New York, New York 12081.

The Alaska Administrative Code was automatically converted to HTML from a plain text format. Every effort has been made to ensure its accuracy, but neither Touch N' Go Systems nor the Law Offices of James B. Gottstein can be held responsible for any possible errors. This version of the Alaska Administrative Code is current through June, 2006.

If it is critical that the precise terms of the Alaska Administrative Code be known, it is recommended that more formal sources be consulted. Recent editions of the Alaska Administrative Journal may be obtained from the Alaska Lieutenant Governor's Office on the world wide web. If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful. Copyright 2006. Touch N' Go Systems, Inc. All Rights Reserved.