(FORTUNE Magazine) – While oil industry earnings suffered from declining energy prices last year, oil pipeline companies gushed profits. Exxon Pipeline, a wholly owned subsidiary of Exxon, made $399.18 million on sales of $1.025 billion -- a return on sales of 38.9%, the highest of all companies on the Service 500. Just behind Exxon were the pipeline subsidiaries of British Petroleum, Atlantic Richfield, and Standard Oil (Ohio), which together reported an average return on sales of 32.1% in 1984. The four companies, which appear on the transportation list, are the principal owners of the 800-mile Trans Alaska Pipeline System, built in the Seventies to bring oil south from Prudhoe Bay to the ice-free port of Valdez for loading into tankers. Why does this line pump money? Exxon Pipeline and the other pipeline companies charge their oil-producing parents around $6 a barrel to ship crude through the line, while paying about 65 cents a barrel to a service company set up to run the system. Since the service company mans and maintains the system, the pipeline companies have modest payroll costs. Sohio Pipe Line, with only 175 employees, had the highest sales per employee of all Service 500 companies -- $7.5 million. The pipeline companies take out about 80 cents for depreciation on each barrel they ship. Income taxes, interest expense on bonds issued to finance the pipeline, and other sundries sop up $2.70 per barrel, but leave a handsome $1.85 profit. Alaska suspects that the oil companies allow their pipeline subsidiaries to charge excessive shipping rates in order to avoid paying production royalties to the state. Royalties are calculated as a percent of the market value of the oil less transportation costs, so a higher pipeline rate reduces the royalties the state can assess. Alaska has fought the pipelines since 1977 to get the rates lowered. Since the end of last year Alaska has come to terms with the Arco and BP pipeline companies, which agreed to a 16% rate cut. Unless Exxon and Sohio go along with the settlement, though, the new rates probably won't stick. One thing is sure, says Kenneth Baden, Arco Pipe Line's controller, ''From the day we all settle, the rates of return you're seeing now won't be there in the future.''