Tesoro Alaska Company v. Union Oil Company of California

OPINION

CARPENETI, Chief Justice.

I. INTRODUCTION

In 2001 an oil producer on the Alaska North Slope entered into a contract to sell its oil to another oil company. Under the contract the buyer took title at the North Slope, but agreed to use a pipeline company associated with the supplier to transport the oil through the Trans-Alaska Pipeline. The price per barrel was calculated as the West Coast market price less marine transport and pipeline tariff. The contract made no mention of whether the pipeline tariff was tied to the ultimate destination of the oil. At the time, the interstate and…