Alyeska loses to state on its annual lease payment

Alex DeMarban

Alyeska Pipeline Co. lost a nine-year battle with the state on Friday when the Alaska Supreme Court upheld the amount the company pays to lease pipeline right of way, the Fairbanks Daily News-Miner reports.

A 2002 state appraisal considering fair market value set the lease payments for the 800-mile-long trans-Alaska pipeline at $236,000 a year. Alyeska Pipeline Service Co. argued the payment was about $55,000 too much.

Alyeska appealed the decision in 2003 to the commissioner of the Department of Natural Resources. Rejected there, the pipeline manager owned by BP, ConocoPhillips and ExxonMobil sued the state.

Alyeska argued that the annual lease payment was excessive because Alyeska is not the sole user of the land leased from the state, and because the state did not provide public notice and comment, according to an AP story.  It also argued it should not have to lease more than 200 acres of submerged lands for which the state held uncertain title.

The Supreme Court upheld a 2010 decision by the Superior Court, saying the payments should be based on the land's full value.  

Read more at the News-Miner.