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Gov Signs Resolution to Resolve TAPS Quality Bank Disputes


Wilson’s HCR 22 looks to keep in-state refineries open & economic

Tuesday, July 29, 2014, Kenai, Alaska – Representative Tammie Wilson’s House Concurrent Resolution 22 was signed by the Governor today. HCR 22 seeks a resolution of trans-Alaska oil pipeline Quality Bank disputes before Jan. 1, 2015.

The Quality Bank is intended to adjust for the differences in value among the different oil streams shipped in the oil pipeline by measuring the impact that each stream has on the value of the common stream. The quality bank methodology has been litigated for more than 25 years. It was changed in 1993 from a gravity methodology to a complex methodology that values each crude oil and refinery return oil stream based on its compositions

Quality Bank costs are the second largest expense for the interior refineries after crude oil. By seeking resolution to the issue, it will help lessen the burden on our in-state refineries.

“HCR 22 asks the parties to focus on the Quality Bank Methodology that has evolved from its original purpose to become a profound burden on refiners like Petro Star and a profit center for royalty oil owners and TAPS shippers,” Wilson, R-Fairbanks/North Pole, said. “The absence of refineries in the state would directly and indirectly negatively affect the labor market in the state, negatively affect the State’s general fund, jeopardize the security of Alaska’s military bases, and drive up the long-term cost of fuel products for the people of the state.”

“I would like to thank the Governor and Commissioner Balash for their hard work to find possible solutions for our in-state refineries as they struggle with many economic issues,” Wilson said.

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