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DC Circuit Decision to Reopen FERC Consideration of TAPS Quality Bank

The United States Court of Appeals for the District of Columbia Circuit’s August 30th opinion in petro-star-dc-circuit-taps-quality-bank-case, Case No. 15-1009, August 30, 2016 (D.C. Cir.) will reopen the Federal Energy Regulatory Commission’s (FERC) consideration of the Quality Bank associated with the Trans Alaska Pipeline System (TAPS). The crude oil put into TAPS is of differing quality, some of higher quality, some of lower quality. The Quality Bank compensates companies inputting higher quality crude so that companies inputting lower quality crude do not receive a windfall. The Quality Bank compensates companies by assigning each company’s crude oil a value based on the quality of its components or “cuts.” The Petro Star case involved calculating the formula for the Resid cut. FERC

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