N.M. Tribe Wins Bid|for Extra Gas Royalties

     WASHINGTON (CN) – A federal judge overturned the Interior Department’s 2007 decision denying the Jicarilla Apache Nation extra royalties from oil and gas leases from 1984 to 1988.




     U.S. District Judge Richard Leon based his decision on the D.C. Circuit’s July ruling that the agency had ignored its own precedent when it overruled its earlier decisions granting the tribe additional royalties for oil and gas mining leases on its reservation in northwest New Mexico.
     In 2000, the Interior Department found that the regulations the Minerals Management Service revised in 1988 did not arrive at the “highest price paid or offered” for Jicarilla’s gas, as its leases require.
     But in 2007, the agency reversed itself and ruled that the previous methodology was inconsistent with the 1988 regulations and could not be used to calculate royalties on gas sold from January 1984 through June 1995.
     In its original complaint, the tribe argued that the Interior Department could not apply the 1988 regulations to oil and gas sold before the regulations went into effect. It also noted that the government has a “long history of failure in the administration of oil and gas royalties.”
     “The Department’s failures have continued to this day,” the tribe added, citing Inspector General Earl Devaney’s testimony before Congress in 2006, when he blasted the government for its “indefensible failures to correct deplorable conditions in Indian Country.”
     The D.C. Circuit sided with the tribe and sent the case back to Judge Leon.
     On remand, Leon vacated the agency’s 2007 decision “as it applied to the period from 1984 to February 1988” and told the Interior Department to try again.

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