Office of Natural Resources Revenue

Fossil Fuel Royalties

The Office of Natural Resources Royalties (ONRR), on behalf of the Secretary of the Interior, is charged with establishing "a comprehensive inspection, collection and fiscal and production accounting and auditing system to provide the capability to accurately determine oil and gas royalties, interest, fines, penalties, fees, deposits, and other payments owed, and to collect and account for such amounts in a timely manner," and to provide similar services for coal leases. (30 U.S.C. 1711(a))

Biden Administration (2021-2025)

Reinstatement of Valuation Rule

On September 28, 2021, ONRR withdrew the 2021 Trump Administration regulation rolling back the Valuation Rule. (86 Fed. Reg. 54045, Sept. 28, 2021). This withdrawal followed an initial action on February 12, 2021 to delay implementation of the rule (86 Fed. Reg. 9286, Feb. 12, 2021), in response to EO 13990 and other actions by the Biden Administration. According to a DOI announcement, the withdrawal of the 2020 Valuation Rule will result in an estimated $64 million annual increase in royalty collections.

While the determination may have climate impacts, ONRR noted in its rulemaking that "ONRR has no statutory framework within which to consider climate change as part of its rulemakings," and so could not consider the climate benefits or detriments of its actions. 86 Fed. Reg. 54045, 54059, Sept. 28, 2021).

Executive Order withdrawing EO 13873

On January 20, 2021, President Biden signed Executive Order 13990 (Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis). Among many other directives, EO 13990 withdrew President Trump's EO 13783 (discussed below), which provided one of the underlying justifications of ONRR's attempts to roll back the Valuation Rule.

First Trump Administration (2017-2021)

Rollback of Valuation Rule

On January 15, 2021, ONRR issued a final rule rolling back the Valuation Rule. (86 Fed. Reg. 4612, Jan. 15, 2021). The 2021 rule implemented different standards for valuing sales of coal, oil, and gas from public lands and removing the Obama Administration's standards for assessing civil penalties for violations of public land leases. In justifying the rule, ONRR cited the policy set out in EO 13873 (discussed below) of reducing burdens on the development of oil, natural gas, and coal resources.

Attempted Repeal of the Valuation Rule

On August 7, 2017, ONRR issued a final rule to repeal the Valuation Rule. (82 Fed. Reg. 36934, Aug. 7, 2017). This repeal was issued in response to EO 13783 (discussed below), following ONRR's conclusion "that certain provisions of the 2017 Valuation Rule would unnecessarily burden the development of Federal oil and gas and Federal and Indian coal."

This repeal was subject to litigation, and ultimately vacated. (See California v. Office of Natural Resources Revenue in "Litigation" below).

Executive Order on Promoting Energy Independence and Economic Growth

On March 28, 2017, the President issued Executive Order 13783 (Promoting Energy Independence and Economic Growth). EO 13783 directs federal agencies to review all existing regulations and other agency actions and, ultimately, to suspend, revise, or rescind any such regulations or actions that unnecessarily burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law.

Obama Administration (2009-2017)

Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform

On July 1, 2016, ONRR issued the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform Rule, also known as the "Valuation Rule," aimed at boosting revenue for taxpayers and states by changing how energy companies value sales of coal, oil and gas extracted from federal and tribal land. (81 Fed. Reg. 43338, July 1, 2016)

Litigation

California v. Office of Natural Resources Revenue

ONRR's August 2017 repeal of the Valuation Rule was challenged by the Attorneys General of California and New Mexico. In March 2019, a District Court in the Northern District of California vacated the repeal, concluding that its issuance had violated the Administrative Procedures Act.