Exxon, BP Face Alaska Gas Antitrust Suit

A lawsuit filed in Alaska federal court charges the world's two largest energy suppliers with conspiring to artificially constrict the supply of natural gas in order to inflate prices and maintain control over distribution.

The lawsuit, brought by the Alaska Gasoline Port Authority, alleges that ExxonMobil Corp. and BP p.l.c. have conspired "to artificially maintain and increase natural-gas prices in Alaska and the continental United States, to boycott competitive pipeline proposals that would increase competition, and to secure and maintain control over Alaska's vast natural-gas resources."

According to the complaint, filed in the U.S. District Court for the District of Alaska, AGPA was formed in 1999 by the state of Alaska to facilitate construction of a gas pipeline from the state's North Slope to the port of Valdez. North Slope natural gas would then be distributed to other parts of the state and U.S. markets.

For this purpose AGPA has proposed the construction of a 48-inch buried pipeline from the North Slope to the Valdez port, the complaint states. It also obtained federal loan guarantees to secure financing for construction of the pipeline.

The complaint contends that Exxon and BP, which allegedly own or control more than two-thirds of the natural-gas resources in Alaska's North Slope, have unlawfully agreed not to sell this gas to AGPA.

As a result of this alleged anticompetitive behavior, the defendants have maintained a steady increase in natural-gas prices by thwarting the transportation of vast amounts of natural gas from the North Slope, the complaint says.

The complaint raises claims against the defendants under Sections 1 and 2 of the Sherman Act for refusing to deal with AGPA, agreeing not to compete in supplying gas for purchase or transport from the North Slope, and conspiring to monopolize markets for the transportation and purchase of natural gas from the North Slope.

The suit also alleges violations of the Clayton Act, unfair trade practices and tortious interference with business opportunities.

At press time, none of the defendants had responded to the complaint.

The case has been assigned to Judge Ralph R. Beistline.