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extensive Prudhoe Bay oil field equipment and facilities not
located at oil well sites.
Again, we note that the right-of-way leases relating to
TAPS and the regulations relating to oil well drilling sites
reflect express language that imposes DRR obligations on the
oil companies. The DL-1 Leases and the Alaska regulations,
however, contain no such express language imposing fixed and
definite DRR obligations on the oil companies relating to
fieldwide production facilities located in the Prudhoe Bay
oil field.
We believe the differences in language relating to DRR
obligations are significant for purposes of the all-events
test of the accrual method of accounting. We believe that
specific DRR obligations relating to fieldwide oil production
facilities could have been reflected in the DL-1 Leases or in
the Alaska regulations were such obligations intended.
Specific DRR language was used in the TAPS right-of-way
provisions. No adequate explanation has been provided as to
why specific language relating to DRR obligations of the PBU
and of the oil companies relating to fieldwide DRR was not set
forth either in the DL-1 Leases or in the Alaska regulations,
other than that such DRR obligations with regard thereto, as
of the years in issue, were not established.
As the current Commissioner of the Department of Natural
Resources for the State of Alaska acknowledged in his trial
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