Flint Hills, which operates a refinery in North Pole, claimed the other pipeline owners are about to force it to heat oil entering the pipeline to keep it flowing. Oil in the line has steadily cooled as production has dipped, and is currently creeping through the pipe at just 40 degrees by the time it arrives from the North Slope.
Flint Hills believes its pipeline partners — BP, ConocoPhillips, ExxonMobil and Unocal — will mandate the refinery return its residual oil at a minimum of 105 degrees Fahrenheit. The company filed a petition with the Federal Energy Regulatory Commission on May 3 protesting the anticipated move.
The other pipeline owners protested the move, saying Flint Hills is objecting to a request that hasn’t been made. FERC agreed Thursday, saying the filing was premature.
“In the exercise of discretion, (FERC) will not rule in advance on a possible tariff filing that may or may not be made,” the ruling stated.
FERC didn’t close the door on a future petition by Flint Hills if the pipeline owners do attempt to push an oil-heating mandate at some point. Flint Hills wants to use some of the heat from its refining process to warm its plant instead of inserting it back into the pipeline.
Flint Hills spokesman Jeff Cook said the refinery is proceeding with plans to install new energy-saving heat capture equipment at its refinery. The project, which Cook said should be done by the end of 2011, is expected to lower energy costs at the refinery, he said.
“It’s just a wise thing to do to become more efficient,” Cook said.
Flint Hills is already adding heat back to the pipeline, reinserting oil at a temperature of 100 degrees or warmer. Cook said the refinery will continue to do its part to keep oil flowing, although it doesn’t believe it should be mandated to do so.
“It’s in our vested interest to keep the pipeline running,” he said.
Contact staff writer Jeff Richardson at 459-7518.
Perhaps it would help if you explained what you mean by being 'gouged'.
Are you implying that Flint Hills is extorting money from us? or swindling us? or do you mean that they are simply charging more than you assume that they should be charging?
Petro-Star and TESORO also refine petroleum products that can be purchased in the interior.
If you think that Flint Hills charges too much for the fuel they sell, then why on earth do you not purchase fuel that is produced from the Petro-Star or TESORO refineries?
Here is a link to the 2008 Alaska Attorney General's Investigation of Energy Prices in Alaska: They did not find evidence that indicated the Alaska refineries were engaged in illegal activity, but they do provide some information that explains why fuel prices in parts of Alaska are higher than other market areas. It is well worth reading.
http://www.law.state.ak.us/pdf/press/2008GasolinePricingReport.pdf
I am assuming this person is employed by Flint Hills. We have every right to purchase our fuel from somewhere else . Home Heating oil futures where at $2.80 a gallon last month . Indonisian jet fuel is being burned in jets loading at Anchorage International. Maybe we can get a load of indonisian home heating fuel to burn in our homes in Fairbanks.Normal heating fuel prices are what ever a barrel is divided by 42 and add ten cents and that is what is typically paid in the lower 48 states w/o out a view of a refinery from your living room.Most of the refineries are not near anywhere close to any home heating fuel demands , maybe a thousand miles away.
The problem with your point of view is that you offer no proof of your allegation.
Flint Hills is simply charging a price for a product that they offer. They are not preventing you from purchasing fuel from another refiner or other alternatives that are available. They are under no obligation to provide anything to you and they are not imposing any obligation on you to purchase anything that they provide. The choice is entirely yours.
There is another refinery right next door to them and petroleum products can be shipped to the interior for only pennies per gallon. You probably don't even know whether the fuel you purchased was refined by Flint Hills or some other refiner
I have not heard that Flint Hills is trying to curtail wood burning, nor have they raised an objection to the wood pellet fuel mill that recently opened in this area. I believe that it is the federal government that is imposing restrictions on heating with wood.
If you honestly believe that they are charging too much, then you should purchase a tanker truck and start importing fuel so you too can get in on those exorbitant profits. (If you don't have the capital to purchase a truck yourself, then you can combine resources with your friends and split the profit.)
You don't seem to realize how free so actually are. Take advantage of that freedom.
People living 1000 miles from a refinery in the lower 48 are paying $2.80 a gallon for heating fuel. Please explain this to my dumb ass. Not compassionate to Flint Hills . We have been getting gouged since these folks took over the refinery . It is a shame as this community is being ruined by the refiners in Fbks. Not to mention the local economy
It would appear that you are letting your animosity toward Flint Hills override common sense.
This is not a newsworthy story. The Newsminer is only hyping an internal disagreement between the owners of the pipeline and you are rising to the bait.
Flint Hills has a reasonable point. They incur an expense to heat the crude oil that they receive from the pipeline, so they shouldn't be forced to give that heat back to the pipeline free of charge.
The regulators also have a point. They can't stop someone from doing what they haven't done.
This particular disagreement will be settled without our needing to worry about it, so not only is Flint Hill's petition to the regulators premature, the story about the event is premature.
However, we should attempt to understand the operational problems with the pipeline that are developing because of declining through-put and we should be asking our state representatives to make sure that the state is not imposing unnecessary obstacles to increasing oil production from the North Slope, because the low through-put situation could soon become critical.
The news media has made a lot of money by playing on our emotions and fanning unreasonable hatred of oil companies, but oil companies are not forcing you to purchase any of their products.
We are free to adjust our lifestyle to reduce the need for their products or to try and compete with them if we think you could serve the public more efficiently.
But railing against those who have invested their own money to offer the products that we need to maintain a comfortable lifestyle is self defeating.