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Wednesday, May 07, 2008

Federal Government Grants Rehearing of Pipeline Case

By Felicia Fonseca
Associated Press
      The federal government is giving itself more time to consider whether to let stand tariffs set by Western Refining Pipeline Co. to ship crude oil on the company's pipeline.
    The Federal Energy Regulatory Commission accepted the tariffs — which range from $6 to $7.50 a barrel — on March 7, and they went into effect three days later. Western's 424-mile pipeline stretches from West Texas to northern New Mexico and briefly crosses the Navajo Nation.
    The Navajo Nation and Resolute Natural Resource Co. had protested the tariffs, saying they were discriminatory and would harm producers in the Four Corners region.
    The tribe asked the commission to grant a rehearing, and the request was OK'd on Wednesday.
    "In order to afford additional time for reconsideration of the matters raised or to be raised, rehearing of the commission's order is hereby granted for the limited purpose of further consideration,'' Nathaniel Davis Sr., deputy secretary of the commission, wrote in the order.
    Resolute, its affiliate, Resolute Aneth LLC, and the Navajo Nation hold oil and gas leases on tribal trust lands and on U.S. Bureau of Land Management land in southeastern Utah. Resolute, Navajo Oil and Gas and other parties jointly produce about 10,200 barrels per day from the properties.
    The Navajo Nation currently does not ship on Western's pipeline, but the tribe said it intends to. The tribe contends that selling crude oil at the price Western offers for its production will reduce revenues to Navajo Nation Oil and Gas Co. by $4.2 million a year. In addition, the tribe would lose about $6 million in royalty and tax revenues per year.
    It's wasn't immediately clear whether Western and the protesters would be able to file additional documents. Tamara Young-Allen, a spokeswoman for FERC, did not return a message left Wednesday by The Associated Press.
    Gary Hanson, a spokesman for Western Refining in El Paso, Texas, said the FERC order "just buys them more time.''
    "They really have an unlimited time now to decide that ruling,'' he said.
    Hanson declined to comment on the tariffs and the Navajo Nation's claim that the rates would harm producers in the region.
    "I'll let the previous ruling stand for itself,'' he said.
    The commission, in response to the Navajo Nation's protest, said the tribe did not show it had an economic interest in the matter and that it lacked standing to protest because it does not ship on Western's pipeline. The commission also said the tribe had not made a valid request to do so.

Copyright ©2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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