The 2016 legal truce that stilled years of wrangling over the valuation of the Trans-Alaska Pipeline System (TAPS) is just months away from expiring.
That’s according to Fairbanks North Star Borough Attorney Jill Dolan. She delivered a quick presentation during the less than 10-minute public portion of a special assembly meeting on Thursday, which ended with an executive session.
The value of the system matters because it helps determine the amount of property taxes the pipeline’s owners must pay to the state and municipalities it crosses. Those include the North Slope Borough, Fairbanks North Star Borough and the City of Valdez.
Harvest Alaska, ConocoPhillips and ExxonMobil are currently the primary owners of the Trans-Alaska pipeline, which was built almost 50 years ago and stretches from Prudhoe Bay to Valdez. BP had claimed Harvest’s spot in that list before a 2020 acquisition.
Dolan said officials in Alaska’s Department of Revenue perform the initial assessment of the pipeline. But that decision can be – and was – appealed at multiple levels, leading to significant litigation between the municipalities and private companies from 2006 until 2016, when they reached the settlement.
“So there’s been trials before the State Assessment Review Board, before the superior court – we’ve had appeals to the Alaska Supreme Court,” Dolan said.
Prior to the agreement, multi-billion-dollar chasms consistently separated the companies’ estimate of the pipeline’s worth from the municipalities’. In a 2015 appeal to the State Assessment Review Board, the owners argued for a $2.6 billion assessment, while the local governments said the property was worth $15.5 billion.
The 2016 settlement values the 800-mile pipeline at $8 billion. The deal lasted for a term of five years, and the companies and local governments extended it for another five years in 2020, meaning it’s set to lapse at the end of 2025.
Dolan said the settlement’s looming expiration date means the borough’s in-house and outside attorneys will soon need guidance from the assembly.
“And so that’s what really brings us here tonight – is to give you some history, a little understanding of the past, and then request your instructions on how we should proceed during this last year of the settlement agreement and moving forward into tax year 2026,” she said.
Assembly members did not comment or ask questions during the public part of the meeting Thursday. They instead moved to enter directly into executive session for “a candid discussion of the facts” with the borough’s outside counsel, Anchorage-based Robin Brena.
Brena has worked for the borough in TAPS legal battles since 2006. He didn’t speak before the executive session Thursday, but Dolan said he’s been “very successful" as their lead litigator in the cases.