Regulation Database – Office of Natural Resources Revenue
Fossil Fuel Royalties
On July 1, 2016, the Office of Natural Resources Revenue (ONRR) issued theConsolidated 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. The rule had been proposed on February 13, 2015.
Deregulatory Action: On August 7, 2017, ONRR issued a final rule to repeal the Valuation Rule.
Litigation: A California District Court vacated the March 2019, concluding that the Department had violated the Administrative Procedures Act.
Deregulatory Action: On August 7, 2020, the Department of Interior proposed revisions to the Valuation Rule. The proposal cited actions taken by the Trump Administration to promote domestic fossil fuel use and development, including the Executive Order on Promoting Energy Independence and Economic Growth.The rollback was finalized on January 15, 2021, with an effective date of February 16.
Reregulatory Action: On February 12, under the Biden-Harris 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 instructed 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.
On September 28, 2021, the Department of Interior formally withdrew the 2020 Valuation Reform and Civil Penalty Rule. According to a DOI announcement, the withdrawal of the 2020 Valuation Rule will result in an estimated $64 million annual increase in royalty collections.