Title 15 . Revenue

Chapter 55 . (Repealed)

Section 900. Definitions

15 AAC 55.900. Definitions

(a) Unless the context otherwise requires, as used in this chapter

(1) "department" means the Department of Revenue;

(2) "FASB" means the Financial Accounting Standards Board;

(3) "FASB-13" means FASB's Statement of Financial Accounting Standards No. 13, "Accounting for Leases" (November 1976), as amended or interpreted by FASB's Statement of Financial Accounting Standards No. 17, "Accounting for Leases - Initial Direct Costs" (November 1977); FASB's Statement of Financial Accounting Standards No. 22, "Changes in the Provisions of Lease Agreements Resulting from Refundings of Tax-Exempt Debt" (June 1978); FASB's Statement of Financial Accounting Standards No. 23, "Inception of the Lease" (August 1978); FASB Interpretation No. 19, "Lessee Guarantee of the Residual Value of Leased Property" (October 1977); and FASB Interpretation No. 21, "Accounting for Leases in a Business Combination" (April 1978);

(4) "LNG transportation facility" means any or all of the following: the LNG liquefaction plant, gathering lines to that plant, loading and unloading facilities for LNG tankers, or LNG tankers;

(5) "pipeline facility" means all facilities incident to the pipeline transportation of oil or gas downstream from the point of production;

(6) "point of production" means

(A) for oil, the automatic custody transfer meter or unit through which the oil enters into the facilities of a carrier pipeline or other transportation carrier; in the absence of an automatic custody transfer meter or unit, "point of production" for oil means the outlet flange of the tank gauge, or in the absence of a tank gauge, another mechanism or device to measure the quantity of oil that has been approved by the department for this purpose, through which the oil is tendered and accepted into the facilities of a carrier pipeline or other transportation carrier or into a field topping plant;

(B) for gas recovered from or in association with oil, the first point after the gas has been completely separated from oil, including condensate and distillate, and where the gas is accurately metered or measured; for purposes of this paragraph, gas and oil have not been completely separated if hydrocarbon liquids extracted by gas processing are blended with oil upstream of the final stage of separation of gas from oil;

(C) for gas not recovered from or in association with oil, the first point after the gas has been completely separated from condensate and distillate where the gas is accurately metered or measured;

(7) "sales delivery point" means

(A) for a producer's oil or gas sold in a bona fide, arm's-length sale to a third party, the point of delivery specified under the terms of the contract or agreement for that sale, except as otherwise provided by 15 AAC 55.151(g) , or 15 AAC 55.191(i) ;

(B) for a producer's oil or oil and commingled NGLs to which (A) of this paragraph does not apply, the point where prevailing value is calculated under 15 AAC 55.171; and

(C) for a producer's gas other than NGLs commingled with oil to which (A) of this paragraph does not apply, the point where prevailing value is calculated under 15 AAC 55.173;

(8) "same market" means

(A) with respect to an oil that a producer refines or ultimately disposes of in the state, the Alaskan market;

(B) with respect to a producer's oil delivered to the United States West Coast (including Hawaii), the West Coast market or, if appropriate, the submarkets on the West Coast (i.e., Puget Sound, San Francisco Bay, the Long Beach and Los Angeles area, and Hawaii);

(C) with respect to a producer's oil delivered to the United States Gulf Coast, the Gulf Coast market;

(D) with respect to a producer's oil delivered to the United States East Coast, the East Coast market;

(E) with respect to a producer's oil delivered to Puerto Rico or the United States Virgin Islands, the Puerto Rico and United States Virgin Islands market;

(F) with respect to a producer's oil delivered to the United States Midcontinent region, the Midcontinent market;

(G) with respect to a producer's gas marketed in the state, the Alaskan market or portion of it served by gas from the same field or area as the producer's gas;

(H) with respect to a producer's gas marketed in the Lower 48, the Lower 48 market;

(I) with respect to a producer's oil or gas marketed in a foreign country, the market in that foreign country.

(9) "ANS" means oil, or commingled oil and NGLs, produced in the Alaska North Slope area;

(10) "crude" means oil or unrefined liquid petroleum consisting principally of oil;

(11) "exchange"

(A) means a disposition of oil, or of commingled oil and NGLs, by a producer to a third party in which all or a portion of the full consideration received is oil or other non-cash consideration; and

(B) includes a related buy-sell agreement, tied sale, ratio exchange, or other arrangement where the producer's disposition of the oil, or of commingled oil and NGLs, to a third party is conditioned on the producer's purchase or receipt of oil or other non-cash consideration from that third party;

(12) "GNP deflator" means the gross national product deflator, as calculated quarterly by the Bureau of Economic Analysis, Economics and Statistics Administration, United States Department of Commerce;

(13) "LNG" means liquified natural gas;

(14) "NGLs" means hydrocarbon liquids extracted from gas at a gas processing plant;

(15) "quality bank differential" means the difference per barrel between the value of a specified ANS stream that is commingled with one or more other streams at a pipeline connection and the value of the commingled pipeline stream, sometimes known as the reference stream, immediately downstream from that pipeline connection, as that difference in value is calculated by the person administering the pipeline quality bank for that pipeline connection;

(16) "residue gas" means the gas remaining after NGLs have been extracted by gas processing at a gas processing plant; "residue gas" includes gas used as fuel and gas that is reinjected into the reservoir;

(17) "TAPS" means Trans Alaska Pipeline System;

(18) "consolidated business" means a corporation or group of corporations having more than 50 percent common ownership, direct or indirect, or a group of corporations in which common control exists, either direct or indirect, as evidenced by an arrangement, contract, or agreement;

(19) "in service" means

(A) engaged in transporting oil or gas produced in the state;

(B) returning to the state from a voyage that transported oil or gas produced in the state; or

(C) engaged in the ordinary and necessary operations incurred to transport oil or gas produced in the state;

(20) "field topping plant" means a facility into which a portion of a stream of hydrocarbon liquids is diverted and run, where distillation techniques are used to separate and remove certain liquid hydrocarbon fractions from the diverted liquids, and from which the remaining fractions of those hydrocarbon liquids are returned and blended back into the stream of undiverted hydrocarbon liquids at a point upstream of the point that constitutes the point of production for the undiverted liquids.

(b) Unless the context otherwise requires, as used in this chapter and in AS 43.55,

(1) "area" means a geographic region or geologic province, including the Cook Inlet basin or the North Slope of the state;

(2) "field" means that part of an area underlain by one or more overlapping, contiguous, or superimposed pools, including Prudhoe Bay field or Middle Ground Shoal field in the state;

(3) "producer" means an owner of an operating right, operating interest, or working interest in a mineral interest in oil or gas; for purposes of this paragraph, an owner includes a proprietorship, a partnership, a joint venture, a limited liability company, a corporation, or all members of a group of any such entities in which one exercises significant influence over the others within the meaning of Accounting Principles Board Opinion No. 18, "The Equity Method of Accounting for Investments in Common Stock," paragraph 17 (March 1971).

(4) "condensate" means liquid hydrocarbons

(A) that can reasonably be separated from gas without the use of gas processing, regardless of whether

(i) the gas was produced from a gas reservoir or an oil reservoir; or

(ii) the liquid hydrocarbons existed in a gaseous or liquid phase in the reservoir; or

(B) recovered from gas other than at a gas processing plant;

(5) "distillate" is condensate;

(6) "gas processing"

(A) means the extraction of hydrocarbon and non-hydrocarbon elements or compounds from gas by absorption, adsorption, or refrigeration; for purposes of this subparagraph, "refrigeration" means

(i) externally applied refrigeration; or

(ii) auto-refrigeration by external compression and adiabatic expansion of gas through a Joule-Thomson valve or similar device;

(B) does not include reduction of natural pressure, mechanical separation, condensate stabilization, alteration of pressure or temperature in a reservoir, or processes such as heating, cooling, dehydration, and compression necessary for safe and efficient field operations;

(7) "gas processing plant" means a facility, downstream of the point of production for gas, that extracts hydrocarbon compounds from gas by gas processing; a facility may be a gas processing plant with respect to certain of its products even if it is not a gas processing plant with respect to other products.

(8) "abandoned" has the meaning given in 20 AAC 25.990;

(9) "bottom hole" has the meaning given the term "bottom-hole location" in 20 AAC 25.990;

(10) "completion date" means, for

(A) an exploration well, the earliest of the dates drilling ceased on the well site, the well was abandoned, or the well was suspended; and

(B) a preexisting well, the date the well was completed and equipped for producing fluids;

(11) "exploration unit" means a unit that is under a plan of exploration;

(12) "exploration well" means a well drilled to discover or to delineate a pool or to gain structural or stratigraphic information to aid in exploring for oil and gas;

(13) "explorer" has the meaning given in AS 43.55.025 ; "explorer" does not include a drilling contractor, operator, or other person that does not hold an interest in the exploration well or seismic or geophysical work;

(14) "plan of exploration" means a plan submitted in accordance with 11 AAC 83.341;

(15) "plan of development" means a plan submitted in accordance with 11 AAC 83.343;

(16) "production unit" means a unit that is under a plan of development;

(17) "new oil or gas reserves" means previously undiscovered oil or gas reserves;

(18) "reserves" means unproduced but recoverable oil or gas in place in a formation;

(19) "suspended" has the meaning given in 20 AAC 25.990;

(20) "unit" means a unit approved by the commissioner of natural resources under AS 38.05.180 .

(c) As used in AS 43.55, "agreement for unitization or pooling" means an agreement under which two or more persons owning working interests in a mineral interest in oil or gas or both agree to have the interests operated on a unified basis and further agree to share in production on a stipulated percentage or fractional basis regardless of the interest or interests from which the oil or gas is actually recovered and produced.

History: Eff. 1/1/95, Register 132; am 1/1/2000, Register 152; am 1/1/2002, Register 160; am 1/1/2003, Register 164; am 1/1/2004, Register 168

Authority: AS 43.05.080

AS 43.55.020

AS 43.55.025

AS 43.55.110

AS 43.55.150

AS 43.55.900

Editor's note: Definitions for this chapter were formerly in 15 AAC 55.210.