The US Office of Natural Resources Revenue has postponed the Jan. 1 effective date for its new final rule covering oil and gas as well as coal valuation on public and Indian tribal land after several petitioners legally challenged it in US District Court for Wyoming on Dec. 29, 2016, the agency announced.
“Federal and Indian lessees should continue to value, report, and pay royalties under the rules that were in effect prior to Jan. 1, 2017,” ONRR said in a Feb. 23 notice. “This applies to the January 2017 production month reports due on Feb. 28, and continues until the litigation is resolved and ONRR provides notice of the result.”
The agency, which is under DOI’s Assistant Secretary for Policy, Management, and Budget, also has published frequently asked questions and responses about the stay.
In Denver, Western Energy Alliance Pres. Kathleen Sgamma expressed approval of ONRR Director Gregory J. Gould’s action. “The valuation rule will do to small independent oil and gas producers operating on federal lands what [the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act] did to community banks: render the federal regulatory environment so complex that small businesses cannot possibly comply,” she warned.
“Small companies will be unable to take many legal deductions, and will pay royalties at a higher price than they can actually obtain in the market. Postponing the rule is a wise step considering the ongoing litigation,” Sgamma said.
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