Secretary of the Interior Ryan Zinke said the Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation Reform Rule, aka the valuation rule, “created confusion and uncertainty” on how to report and pay royalties on resources extracted from federal lands and waters, which include Indian reservations.
Repeal of the valuation rule will take effect Sept. 6, Zinke’s office said. It said repeal will provide “certainty and clarity to the regulated community by continuing to require compliance with lawful and well-known oil, gas, and coal regulations in force for more than a decade.”
Zinke said repeal of the valuation rule is part of President Trump’s commitment to developing natural resources, and “provides a clean slate to create workable valuation regulations.”
“We are committed to working closely with stakeholders and the newly chartered Royalty Policy Committee to explore options for future rulemakings and to avoid the structural defects that were found in the prior rule,” Zinke said. “The department and the Office of Natural Resources Revenue remain committed to collecting every dollar due. These are taxpayer and American Indian assets, and the public and American Indians deserve an accurate accounting and valuation.”
Zinke said the valuation rule hurt resource extraction and production on federal lands and waters, “making us rely more and more on foreign imports of oil and gas.”
“The United States is a safer and more sustainable nation when we rely on our own natural resource development,” Zinke said. “Repealing the valuation rule restores our economic freedom by ensuring our energy independence.”
Critics say the Trump administration policies include despoliation of pristine lands at the behest of the oil and gas industry.
Sen. Lisa Murkowski, R-Alaska, said she supported the repeal. “While the federal government will continue to collect its fair share of revenues from responsible development, the repeal of this rule will help prevent negative impacts to exploration and production that would put our energy dominance at stake,” she said in a statement.
Industry stakeholders and trade associations have filed three lawsuits challenging the rule, claiming “it would be impossible for them to comply with the rule’s new royalty reporting and payment requirements by the deadline, exposing noncompliant lessees to significant civil penalties,” Zinke’s office said.