Interior Moves to Reverse Rollback of Royalties Rule

On June 10, 2021, the Office of Natural Resources Revenue (ONRR) in the Department of Interior proposed repealing an action taken by the previous administration to cut fossil fuel royalty payments.

On January 15, 2021, ONRR finalized revisions to the 2016 Coal, Oil, and Gas Valuation Rule. The 2016 Valuation Rule was issued to boost revenue for taxpayers and states by changing how energy companies value sales of coal, oil and gas extracted from federal and tribal land. The revisions were scheduled to come into effect on February 16, 2021.

On February 12, under the new administration, ONRR delayed the effective date of the rule until April 16, 2021. ONRR acted pursuant to a January 20 memorandum titled “Regulatory Freeze Pending Review,” which instructs agencies to delay and reconsider rules issued by the previous administration that have not yet become effective. ONRR also invited the public to submit comment on any issue of fact, law, or policy raised by the 2020 Rule. Comments will be accepted through March 15, 2021. On June 10 ONRR proposed repealing the January 15 revisions that cut fossil fuel payments.