Rebuttal Testimony of Flint Hills Resources Alaska LLC v. FERC under OR14-6.

David W. D'Alessandro 202.728.3014 DIRECT 202.572.9989 DIRECT FAX david.dalessandro@stinsonleonard.com January 31, 2014 Via Electronic Mail Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426 Re: BP Pipelines (Alaska) Inc., ConocoPhillips Transportation Alaska, Inc., and ExxonMobil Pipeline Co., Docket No. OR14-6-000 Dear Ms. Bose: Pursuant to the procedural schedule issued in the referenced proceeding, Flint Hills Resources Alaska, LLC (FHR) submits for filing: (1) Prepared Rebuttal Testimony of Philip K. Verleger Jr. (Exh. Nos. FHR-51 - FHR-61); (2) Prepared Rebuttal Testimony of Norman P. Lieberman (Exh. Nos. FHR-62 - FHR-73); and (3) Prepared Rebuttal Testimony of Charles L. Miller (Exh. Nos. FHR- 74 - FHR-82). In addition, FHR submits for filing, in compliance with the procedural schedule issued in this proceeding, written summaries of each of the aforementioned testimonies. Respectfully submitted, Stinson Leonard Street LLP /s/ David DAlessandro David D'Alessandro Counsel for Flint Hills Resources Alaska LLC Enclosures 1775 PENNSYLVANIA AVENUE N.W., SUITE 800 WASHINGTON, DC 20006 STINSONLEONARD.COM 202.785.9100 MAIN 202.785.9163 FAX DB04/0805799.0024/10341222.1 EX03 Exhibit No. FHR-51 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION BP Pipelines (Alaska) Inc., ) ConocoPhillips Transportation Alaska, ) Docket No. OR14-6-000 Inc., and ) ExxonMobil Pipeline Company ) SUMMARY OF REBUTTAL TESTIMONY OF PHILIP K. VERLEGER (Exhibit Nos. FHR-51 FHR-61) Dr. Verlegers rebuttal testimony responds to assertions regarding his prior testimony and deposition. After summarizing his prior analysis that the aggregate QB value of the nine cuts exceeded Platts assessed value of ANS crude prior to 2009 and has been lower since then, Dr. Verlger reiterates his understanding that the QB methodology is designed to measure relative, not absolute, values. His analysis shows how the QB formula results shifted relatively compared to a well-established market benchmark of ANS crude value. Likewise, his comparison of QB Resid values to Platts cracking netbacks addresses whether the QB values accurately reflect Resids relatively higher value as a coking feedstock than as a blending agent. Both analyses show that the QB formula is not capturing the actual market value of Resid, which distorts its relative position to other ANS cuts whose QB value matches their actual market value. Dr. Verleger finds the claims that the QB aggregated nine cut value should be lower than the assessed value of ANS crude because the QB methodology measures intermediate, not final, product values not credible. If the QB methodology is designed to value the ANS cuts as refiners would, then the QB methodology should closely ...