Repeal of Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform, 16323-16325 [2017-06617]
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Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Proposed Rules
DEPARTMENT OF THE INTERIOR
Office of Natural Resources Revenue
30 CFR Parts 1202 and 1206
[Docket No. ONRR–2017–0001; DS63644000
DR2000000.CH7000 178D0102R2]
RIN 1012–AA20
Repeal of Consolidated Federal Oil &
Gas and Federal & Indian Coal
Valuation Reform
Office of Natural Resources
Revenue, Interior.
ACTION: Proposed rule.
AGENCY:
The Office of Natural
Resources Revenue (ONRR) proposes to
repeal the Consolidated Federal Oil &
Gas and Federal & Indian Coal
Valuation Reform Rule that was
published in the Federal Register on
July 1, 2016 (‘‘2017 Valuation Rule’’).
Repeal of the 2017 Valuation Rule
would maintain the current regulatory
status quo by keeping the longstanding
pre-existing regulations in effect.
DATES: You must submit comments on
or before May 4, 2017.
ADDRESSES: You may submit comments
to ONRR on this proposed rulemaking
by any of the methods listed below.
Please reference the Regulation
Identifier Number (RIN) 1012–AA20 in
your comments. See also Public
Availability of Comments under
Procedural Matters.
• Electronically: Go to
www.regulations.gov. In the entry titled
‘‘Enter Keyword or ID,’’ enter ‘‘ONRR–
2017–0002,’’ and then click ‘‘Search.’’
Follow the instructions to submit public
comments. We will post all comments.
• Email comments to Armand
Southall, Regulatory Specialist, at
armand.southall@onrr.gov.
• Hand-carry or mail comments,
using an overnight courier service, to
the Office of Natural Resources
Revenue, Building 53, Entrance E–20,
Denver Federal Center, West 6th Ave.
and Kipling St., Denver, Colorado
80225.
SUMMARY:
For
comments or questions on procedural
issues, contact Armand Southall, ONRR,
at (303) 231–3221, or email to
armand.southall@onrr.gov.
SUPPLEMENTARY INFORMATION:
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FOR FURTHER INFORMATION CONTACT:
I. Background
On July 1, 2016, ONRR published in
the Federal Register the Consolidated
Federal Oil & Gas and Federal & Indian
Coal Valuation Reform Rule, which was
effective on January 1, 2017 (2017
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Valuation Rule). 81 FR 43338. The 2017
Valuation Rule changes how Federal oil
and gas and Federal and Indian coal
lessees value production for royalty
purposes. It also revises revenuereporting requirements.
On December 29, 2016, three different
sets of petitioners filed three separate
petitions challenging the 2017 Valuation
Rule in the United States District Court
for the District of Wyoming. In those
lawsuits the petitioners allege that
certain provisions of the 2017 Valuation
Rule are arbitrary, capricious, and
contrary to the law. The petitioners raise
serious questions concerning the
validity or prudence of certain
provisions of the 2017 Valuation Rule,
such as the expansion of the ‘‘default
provision’’ and the use of the sales price
of electricity to value coal.
In addition to initiating litigation, on
February 17, 2017, the petitioners sent
a joint letter to the ONRR Director. In
that letter the petitioners asserted that
the 2017 Valuation Rule’s new reporting
and payment requirements would be
difficult or impossible to comply with
by the royalty reporting-deadline, a
problem that would be exacerbated by
the fact that non-compliant lessees may
be exposed to significant civil penalties.
The petitioners’ lawsuits and
correspondence echoed the concerns
voiced by many industry representatives
in workshops during the public
comment period that preceded the 2017
Valuation Rule’s promulgation. Records
of those workshops, industry comments,
and other public comments may be
viewed at https://onrr.gov/Laws_R_D/
FRNotices/AA13.htm.
On February 27, 2017, in response to
the petitioners’ lawsuits and their
request to ONRR to stay implementation
of the 2017 Valuation Rule, ONRR
postponed implementation of the 2017
Valuation Rule, pending judicial review,
by notice published in the Federal
Register. 82 FR 11823.
ONRR is now proposing to repeal the
2017 Valuation Rule in its entirety.
Repeal would be consistent with the
President’s January 30, 2017, Executive
Order on Reducing Regulation and
Controlling Regulatory Costs. It would
(a) preserve the regulatory status quo
while ONRR reconsiders whether
revisions are appropriate or needed to
the pre-existing regulations governing
royalty values; (b) avoid the costs to
both government and industry of
converting to controversial new royalty
reporting and payment systems while
the reconsideration takes place; (c)
eliminate the need for continued and
uncertain litigation over the validity of
the 2017 Valuation Rule, and (d)
enhance the lessees’ ability to timely
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16323
and accurately report and pay royalties,
because they would continue to use a
well-known system that has been in
place for decades.
ONRR’s original intent behind the
2017 Rule was to offer greater
simplicity, certainty, clarity, and
consistency in product valuation and
reporting for mineral lessees. But ONRR
has since identified several areas in the
rule that warrant reconsideration to
meet policy and implementation
objectives, including but not limited to,
how to value coal production in certain
non-arm’s length transactions, how to
value coal when the first arm’s-length
sale of the coal is electricity, how to
value gas in certain no-sale situations,
and under what circumstances, and on
whom, ONRR’s valuation
determinations are binding. The repeal
would allow ONRR to reconsider
whether the changes made by the 2017
Valuation Rule are needed, while
providing certainty and clarity to the
regulated community during that
reconsideration by continuing to require
compliance with lawful, longstanding,
and well known procedures. Absent
repeal, ONRR would also be required to
continue litigation over the 2017
Valuation Rule, even though that Rule
may not reflect ONRR’s current
conclusions on how best to value
production for royalty purposes.
Concurrently with this notice, ONRR is
publishing an Advance Notice of
Proposed Rulemaking seeking
comments on whether revisions are
appropriate or needed to the preexisting regulations governing royalty
values, including comments on whether
the 2017 Valuation Rule should
ultimately be retained or repromulgated,
in whole or in part.
ONRR’s pre-existing valuation rules
are still authorized by, and consistent
with, applicable law, including 5 U.S.C.
301 et seq., 25 U.S.C. 396 et seq., 396a
et seq., 2101 et seq.; 30 U.S.C. 181 et
seq., 351 et seq., 1001 et seq., 1701 et
seq.; 31 U.S.C. 9701; 43 U.S.C. 1301 et
seq., 1331 et seq., and 1801 et seq.
II. Explanation of Proposed
Amendments
ONRR proposes to repeal the 2017
Valuation Rule in its entirety. If,
following public comment, ONRR
publishes a final rule repealing the 2017
Valuation Rule in its entirety, then 30
CFR parts 1202 and 1206 would revert
to read as they did before ONRR
promulgated the 2017 Valuation Rule.
Part 1202 would read as published in
the July 1, 2015, edition of title 30 of the
Code of Federal Regulations (CFR),
which is at https://www.gpo.gov/fdsys/
pkg/CFR-2015-title30-vol3/pdf/CFR-
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Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Proposed Rules
2015-title30-vol3-part1202.pdf. Part
1206 would read as published in the
July 1, 2015, edition of title 30 of the
Code of Federal Regulations, which is at
https://www.gpo.gov/fdsys/pkg/CFR2015-title30-vol3/pdf/CFR-2015-title30vol3-part1206.pdf.
III. Section-by-Section Analysis
The proposed and final rules for the
2017 Valuation Rule, including their
section-by-section analyses, are at
https://onrr.gov/Laws_R_D/FRNotices/
AA13.htm. A repeal of the 2017
Valuation Rule would return each
section to its reading prior to the July 1,
2016, publication of the 2017 Valuation
Rule. With repeal, the section-by-section
analyses may be found in the preambles
for ONRR’s and its predecessors’ prior
rulemakings as published in the Federal
Register. The Federal Register volume
and page number citations for those
prior rulemakings, including their
preambles, may be found in the Code of
Federal Regulations, 30 CFR parts 1202
and 1206, as they existed before the July
1, 2016, publication of the 2017
Valuation Rule. For part 1202 the
Federal Register citations are at https://
www.gpo.gov/fdsys/pkg/CFR-2015title30-vol3/pdf/CFR-2015-title30-vol3part1202.pdf. For part 1206, the Federal
Register citations are at https://
www.gpo.gov/fdsys/pkg/CFR-2015title30-vol3/pdf/CFR-2015-title30-vol3part1206.pdf.
IV. Procedural Matters
1. Summary Cost and Royalty Impact
Data
Repeal would negate the cost and
royalty impact of the 2017 Valuation
Rule. That cost and royalty impact is
described in the final 2017 Valuation
Rule, under Procedural Matters, item 1,
starting at 81 FR 43359.
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2. Regulatory Planning and Review
(Executive Orders 12866, 13563, and
Executive Order 13771 on Reducing
Regulation and Controlling Regulatory
Costs Dated January 30, 2017)
Executive Order (E.O.) 12866 provides
that the Office of Information and
Regulatory Affairs (OIRA) of the Office
of Management and Budget (OMB) will
review all significant rules. The Office
of Information and Regulatory Affairs
has determined that this rule is not
significant.
Executive Order 13563 reaffirms the
principles of E.O. 12866, while calling
for improvements in the Nation’s
regulatory system to promote
predictability, to reduce uncertainty,
and to use the best, most innovative,
and least burdensome tools for
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achieving regulatory ends. The
Executive Order directs agencies to
consider regulatory approaches that
reduce burdens and maintain flexibility
and freedom of choice for the public
where these approaches are relevant,
feasible, and consistent with regulatory
objectives. E.O. 13563 emphasizes
further that regulations must be based
on the best available science and that
the rulemaking process must allow for
public participation and an open
exchange of ideas. We developed this
proposed rule in a manner consistent
with these requirements.
The President’s January 30, 2017,
Executive Order on Reducing
Regulation and Controlling Regulatory
Costs, as implemented under February
2, 2017, Interim Guidance issued by
OIRA, imposes certain requirements for
every rule considered significant under
E.O. 12866. First, every new significant
rule requires the repeal of two rules.
Second, an agency must fully offset the
total incremental cost of significant new
regulations, including repealed
regulations, finalized in fiscal year 2017.
Since this proposed rule—which is
itself a repeal of an existing rule—is not
a significant rule under E.O. 12866, it
does not require the repeal of two other
existing rules, and the agency is not
required to offset its cost against the cost
of other fiscal year 2017 rules.
3. Regulatory Flexibility Act
The Department of the Interior
certifies that this proposed rule would
not have a significant economic effect
on a substantial number of small entities
under the Regulatory Flexibility Act (5
U.S.C. 601 et seq.). See the 2017
Valuation Rule, Procedural Matters,
item 1, starting at 81 FR 43359, and item
3, starting at 81 FR 43367.
4. Small Business Regulatory
Enforcement Fairness Act
This proposed rule is not a major rule
under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement
Fairness Act. This proposed rule:
a. Would not have an annual effect on
the economy of $100 million or more.
We estimate the maximum effect as a
reverse of the impacts described in the
2017 Valuation Rule, under Procedural
Matters, item 1, starting at 81 FR 43359,
and item 4, 81 FR 43368.
b. Would not cause a major increase
in costs or prices for consumers,
individual industries, Federal, State, or
local government agencies, or
geographic regions. See the 2017
Valuation Rule, under Procedural
Matters, item 1, starting at 81 FR 43359,
and item 4, 81 FR 43368.
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c. Would not have significant adverse
effects on competition, employment,
investment, productivity, innovation, or
the ability of U.S.-based enterprises to
compete with foreign-based enterprises.
This proposed rule would benefit U.S.based enterprises.
5. Unfunded Mandates Reform Act
This proposed rule would not impose
an unfunded mandate on State, local, or
Tribal governments, or the private sector
of more than $100 million per year. This
proposed rule would not have a
significant or unique effect on State,
local, or Tribal governments, or the
private sector. Therefore, we are not
required to provide a statement
containing the information set out in the
Unfunded Mandates Reform Act (2
U.S.C. 1501 et seq.). See the 2017
Valuation Rule, under Procedural
Matters, item 1, starting at 81 FR 43359,
and item 5 at 81 FR 43368.
6. Takings (E.O. 12630)
Under the criteria in E.O. 12630, this
proposed rule would not have
significant takings implications. This
proposed rule would apply to Federal
oil, Federal gas, Federal coal, and Indian
coal leases only. This proposed rule
would not be a governmental action
capable of interference with
constitutionally protected property
rights. This proposed rule does not
require a Takings Implication
Assessment.
7. Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this
proposed rule would not have sufficient
Federalism implications to warrant the
preparation of a Federalism Assessment.
The management of Federal oil and gas
leases and Federal and Indian coal
leases is the responsibility of the
Secretary of the Interior. This proposed
rule would not impose administrative
costs on States or local governments.
This proposed rule also does not
substantially and directly affect the
relationship between the Federal and
State governments. Because this rule, if
promulgated as a final rule, would not
alter that relationship, it does not
require a Federalism summary impact
statement.
8. Civil Justice Reform (E.O. 12988)
This proposed rule would comply
with the requirements of E.O. 12988, for
the reasons we outline in the following
paragraphs. Specifically, this proposed
rule:
a. Would meet the criteria of § 3(a),
which requires that we review all
regulations to eliminate errors and
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Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Proposed Rules
ambiguity and to write them to
minimize litigation.
b. Would meet the criteria of § 3(b)(2),
which requires that we write all
regulations in clear language using clear
legal standards.
9. Consultation With Indian Tribal
Governments (E.O. 13175)
The Department strives to strengthen
its government-to-government
relationship with the Indian Tribes
through a commitment to consultation
with the Indian Tribes and recognition
of their right to self-governance and
Tribal sovereignty. Under the
Department’s consultation policy and
the criteria in E.O. 13175, we evaluated
this proposed rule and determined that
it would potentially affect Federallyrecognized Indian Tribes. We
determined that this rule would restore
the historical valuation methodology for
coal produced from Indian leases. Our
previous and planned activities include:
(a) As described in the 2017 Valuation
Rule under Procedural Matters, item 9,
at 81 FR 43368, we consulted with the
affected Tribes on a government-togovernment basis in preparing the 2017
Valuation Rule. We also will consult
with the affected Tribes about potential
repeal of the 2017 Valuation Rule.
(b) We will fully consider Tribal
views in the final rule.
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10. Paperwork Reduction Act
This proposed rule:
(a) Does not contain any new
information collection requirements.
(b) Does not require a submission to
OMB under the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq). See
5 CFR 1320.4(a)(2).
This proposed rule, if promulgated as
a final rule, will leave in tack the
information collection requirements that
OMB already approved under OMB
Control Numbers 1012–0004, 1012–
0005, and 1012–0010.
11. National Environmental Policy Act
of 1969 (NEPA)
This proposed rule would not
constitute a major Federal action,
significantly affecting the quality of the
human environment. We are not
required to provide a detailed statement
under NEPA because this rule qualifies
for categorically exclusion under 43
CFR 46.210(i) in that this is ‘‘. . . of an
administrative, financial, legal,
technical, or procedural nature. . . .’’
This rule also qualifies for categorically
exclusion under Departmental Manual,
part 516, section 15.4.(C)(1) in that its
impacts are limited to administrative,
economic, or technological effects. We
also have determined that this rule is
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not involved in any of the extraordinary
circumstances listed in 43 CFR 46.215
that would require further analysis
under NEPA. The procedural changes
resulting from the repeal of the 2017
Valuation Rule would have no
consequences on the physical
environment. This proposed rule would
not alter, in any material way, natural
resources exploration, production, or
transportation.
Dated: March 30, 2017.
Amy Holley,
Acting Assistant Secretary for Policy,
Management and Budget.
12. Effects on the Energy Supply (E.O.
13211)
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30 CFR Parts 1202 and 1206
This proposed rule would not be a
significant energy action under the
definition in E.O. 13211, and, therefore,
would not require a Statement of Energy
Effects.
13. Clarity of This Regulation
14. Public Availability of Comments
Before including your address, phone
number, email address, or other
personal identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us, in your comment,
to withhold your personal identifying
information from public view, we
cannot guarantee that we will be able to
do so.
List of Subjects in 30 CFR Parts 1202
and 1206
Coal, Continental shelf, Government
contracts, Indian lands, Mineral
royalties, Natural gas, Oil, Oil and gas
exploration, Public lands—mineral
resources, Reporting and recordkeeping
requirements.
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BILLING CODE 4335–30–P
DEPARTMENT OF THE INTERIOR
Office of Natural Resources Revenue
[Docket No. ONRR–2017–0002; DS63644000
DR2000000.CH7000 178D0102R2]
RIN 1012–AA21
Federal Oil and Gas and Federal and
Indian Coal Valuation
Office of Natural Resources
Revenue (ONRR), Interior.
ACTION: Advance Notice of Proposed
Rulemaking (ANPRM).
AGENCY:
Executive Orders 12866 (section
1(b)(12)), 12988 (section 3(b)(1)(B)), and
13563 (section 1(a)), and the
Presidential Memorandum of June 1,
1998, would require us to write all rules
in Plain Language. This means that each
rule that we publish must: (a) Have
logical organization; (b) use the active
voice to address readers directly; (c) use
clear language rather than jargon; (d) use
short sections and sentences; and (e) use
lists and tables wherever possible.
If you feel that we have not met these
requirements, send your comments to
armand.southall@onrr.gov. To better
help us revise this rule, make your
comments as specific as possible. For
example, you should tell us the
numbers of the sections or paragraphs
that you think we wrote unclearly,
which sections or sentences are too
long, the sections where you feel lists or
tables would be useful, etc.
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[FR Doc. 2017–06617 Filed 4–3–17; 8:45 am]
The Office of Natural
Resources Revenue (ONRR) requests
comments and suggestions from affected
parties and the interested public on
whether revisions to the regulations
governing the valuation, for royalty
purposes, of oil and gas produced from
Federal onshore and offshore leases and
coal produced from Federal and Indian
leases, are needed and, if so, what
specific revisions should be considered.
On July 1, 2016, ONRR published a final
rule, Consolidated Federal Oil and Gas
and Federal and Indian Coal Valuation
Reform (2017 Valuation Rule). ONRR
subsequently stayed the effective date of
that rule pending resolution of
litigation. As a result of the stay, the
regulations in effect prior to January 1,
2017 (‘‘pre-existing regulations’’) remain
in effect. In a separate notice, ONRR is
seeking comments on a proposed rule to
repeal the 2017 Valuation Rule to
maintain the status quo in which the
pre-existing regulations remain in effect
while ONRR reconsiders whether
changes made by the 2017 Valuation
Rule are needed or appropriate.
DATES: You must submit your comments
by May 4, 2017.
ADDRESSES: You may submit comments
to ONRR on this ANPRM by any of the
following methods. Please reference the
Regulation Identifier Number (RIN)
1012–AA21 in your comments.
• Electronically: Go to https://
www.regulations.gov. In the entry titled
‘‘Enter Keyword or ID,’’ enter ‘‘ONRR–
2017–0002,’’ then click ‘‘Search.’’
Follow the instructions to submit public
comments. We will post all comments.
• Email comments to Luis Aguilar,
Regulatory Specialist, at Luis.Aguilar@
onrr.gov.
SUMMARY:
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Agencies
[Federal Register Volume 82, Number 63 (Tuesday, April 4, 2017)]
[Proposed Rules]
[Pages 16323-16325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06617]
[[Page 16323]]
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DEPARTMENT OF THE INTERIOR
Office of Natural Resources Revenue
30 CFR Parts 1202 and 1206
[Docket No. ONRR-2017-0001; DS63644000 DR2000000.CH7000 178D0102R2]
RIN 1012-AA20
Repeal of Consolidated Federal Oil & Gas and Federal & Indian
Coal Valuation Reform
AGENCY: Office of Natural Resources Revenue, Interior.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Natural Resources Revenue (ONRR) proposes to
repeal the Consolidated Federal Oil & Gas and Federal & Indian Coal
Valuation Reform Rule that was published in the Federal Register on
July 1, 2016 (``2017 Valuation Rule'').
Repeal of the 2017 Valuation Rule would maintain the current
regulatory status quo by keeping the longstanding pre-existing
regulations in effect.
DATES: You must submit comments on or before May 4, 2017.
ADDRESSES: You may submit comments to ONRR on this proposed rulemaking
by any of the methods listed below. Please reference the Regulation
Identifier Number (RIN) 1012-AA20 in your comments. See also Public
Availability of Comments under Procedural Matters.
Electronically: Go to www.regulations.gov. In the entry
titled ``Enter Keyword or ID,'' enter ``ONRR-2017-0002,'' and then
click ``Search.'' Follow the instructions to submit public comments. We
will post all comments.
[Egr]mail comments to Armand Southall, Regulatory
Specialist, at armand.southall@onrr.gov.
Hand-carry or mail comments, using an overnight courier
service, to the Office of Natural Resources Revenue, Building 53,
Entrance E-20, Denver Federal Center, West 6th Ave. and Kipling St.,
Denver, Colorado 80225.
FOR FURTHER INFORMATION CONTACT: For comments or questions on
procedural issues, contact Armand Southall, ONRR, at (303) 231-3221, or
email to armand.southall@onrr.gov.
SUPPLEMENTARY INFORMATION:
I. Background
On July 1, 2016, ONRR published in the Federal Register the
Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation
Reform Rule, which was effective on January 1, 2017 (2017 Valuation
Rule). 81 FR 43338. The 2017 Valuation Rule changes how Federal oil and
gas and Federal and Indian coal lessees value production for royalty
purposes. It also revises revenue-reporting requirements.
On December 29, 2016, three different sets of petitioners filed
three separate petitions challenging the 2017 Valuation Rule in the
United States District Court for the District of Wyoming. In those
lawsuits the petitioners allege that certain provisions of the 2017
Valuation Rule are arbitrary, capricious, and contrary to the law. The
petitioners raise serious questions concerning the validity or prudence
of certain provisions of the 2017 Valuation Rule, such as the expansion
of the ``default provision'' and the use of the sales price of
electricity to value coal.
In addition to initiating litigation, on February 17, 2017, the
petitioners sent a joint letter to the ONRR Director. In that letter
the petitioners asserted that the 2017 Valuation Rule's new reporting
and payment requirements would be difficult or impossible to comply
with by the royalty reporting-deadline, a problem that would be
exacerbated by the fact that non-compliant lessees may be exposed to
significant civil penalties.
The petitioners' lawsuits and correspondence echoed the concerns
voiced by many industry representatives in workshops during the public
comment period that preceded the 2017 Valuation Rule's promulgation.
Records of those workshops, industry comments, and other public
comments may be viewed at https://onrr.gov/Laws_R_D/FRNotices/AA13.htm.
On February 27, 2017, in response to the petitioners' lawsuits and
their request to ONRR to stay implementation of the 2017 Valuation
Rule, ONRR postponed implementation of the 2017 Valuation Rule, pending
judicial review, by notice published in the Federal Register. 82 FR
11823.
ONRR is now proposing to repeal the 2017 Valuation Rule in its
entirety. Repeal would be consistent with the President's January 30,
2017, Executive Order on Reducing Regulation and Controlling Regulatory
Costs. It would (a) preserve the regulatory status quo while ONRR
reconsiders whether revisions are appropriate or needed to the pre-
existing regulations governing royalty values; (b) avoid the costs to
both government and industry of converting to controversial new royalty
reporting and payment systems while the reconsideration takes place;
(c) eliminate the need for continued and uncertain litigation over the
validity of the 2017 Valuation Rule, and (d) enhance the lessees'
ability to timely and accurately report and pay royalties, because they
would continue to use a well-known system that has been in place for
decades.
ONRR's original intent behind the 2017 Rule was to offer greater
simplicity, certainty, clarity, and consistency in product valuation
and reporting for mineral lessees. But ONRR has since identified
several areas in the rule that warrant reconsideration to meet policy
and implementation objectives, including but not limited to, how to
value coal production in certain non-arm's length transactions, how to
value coal when the first arm's-length sale of the coal is electricity,
how to value gas in certain no-sale situations, and under what
circumstances, and on whom, ONRR's valuation determinations are
binding. The repeal would allow ONRR to reconsider whether the changes
made by the 2017 Valuation Rule are needed, while providing certainty
and clarity to the regulated community during that reconsideration by
continuing to require compliance with lawful, longstanding, and well
known procedures. Absent repeal, ONRR would also be required to
continue litigation over the 2017 Valuation Rule, even though that Rule
may not reflect ONRR's current conclusions on how best to value
production for royalty purposes. Concurrently with this notice, ONRR is
publishing an Advance Notice of Proposed Rulemaking seeking comments on
whether revisions are appropriate or needed to the pre-existing
regulations governing royalty values, including comments on whether the
2017 Valuation Rule should ultimately be retained or repromulgated, in
whole or in part.
ONRR's pre-existing valuation rules are still authorized by, and
consistent with, applicable law, including 5 U.S.C. 301 et seq., 25
U.S.C. 396 et seq., 396a et seq., 2101 et seq.; 30 U.S.C. 181 et seq.,
351 et seq., 1001 et seq., 1701 et seq.; 31 U.S.C. 9701; 43 U.S.C. 1301
et seq., 1331 et seq., and 1801 et seq.
II. Explanation of Proposed Amendments
ONRR proposes to repeal the 2017 Valuation Rule in its entirety.
If, following public comment, ONRR publishes a final rule repealing the
2017 Valuation Rule in its entirety, then 30 CFR parts 1202 and 1206
would revert to read as they did before ONRR promulgated the 2017
Valuation Rule. Part 1202 would read as published in the July 1, 2015,
edition of title 30 of the Code of Federal Regulations (CFR), which is
at https://www.gpo.gov/fdsys/pkg/CFR-2015-title30-vol3/pdf/CFR-
[[Page 16324]]
2015-title30-vol3-part1202.pdf. Part 1206 would read as published in
the July 1, 2015, edition of title 30 of the Code of Federal
Regulations, which is at https://www.gpo.gov/fdsys/pkg/CFR-2015-title30-vol3/pdf/CFR-2015-title30-vol3-part1206.pdf.
III. Section-by-Section Analysis
The proposed and final rules for the 2017 Valuation Rule, including
their section-by-section analyses, are at https://onrr.gov/Laws_R_D/FRNotices/AA13.htm. A repeal of the 2017 Valuation Rule would return
each section to its reading prior to the July 1, 2016, publication of
the 2017 Valuation Rule. With repeal, the section-by-section analyses
may be found in the preambles for ONRR's and its predecessors' prior
rulemakings as published in the Federal Register. The Federal Register
volume and page number citations for those prior rulemakings, including
their preambles, may be found in the Code of Federal Regulations, 30
CFR parts 1202 and 1206, as they existed before the July 1, 2016,
publication of the 2017 Valuation Rule. For part 1202 the Federal
Register citations are at https://www.gpo.gov/fdsys/pkg/CFR-2015-title30-vol3/pdf/CFR-2015-title30-vol3-part1202.pdf. For part 1206, the
Federal Register citations are at https://www.gpo.gov/fdsys/pkg/CFR-2015-title30-vol3/pdf/CFR-2015-title30-vol3-part1206.pdf.
IV. Procedural Matters
1. Summary Cost and Royalty Impact Data
Repeal would negate the cost and royalty impact of the 2017
Valuation Rule. That cost and royalty impact is described in the final
2017 Valuation Rule, under Procedural Matters, item 1, starting at 81
FR 43359.
2. Regulatory Planning and Review (Executive Orders 12866, 13563, and
Executive Order 13771 on Reducing Regulation and Controlling Regulatory
Costs Dated January 30, 2017)
Executive Order (E.O.) 12866 provides that the Office of
Information and Regulatory Affairs (OIRA) of the Office of Management
and Budget (OMB) will review all significant rules. The Office of
Information and Regulatory Affairs has determined that this rule is not
significant.
Executive Order 13563 reaffirms the principles of E.O. 12866, while
calling for improvements in the Nation's regulatory system to promote
predictability, to reduce uncertainty, and to use the best, most
innovative, and least burdensome tools for achieving regulatory ends.
The Executive Order directs agencies to consider regulatory approaches
that reduce burdens and maintain flexibility and freedom of choice for
the public where these approaches are relevant, feasible, and
consistent with regulatory objectives. E.O. 13563 emphasizes further
that regulations must be based on the best available science and that
the rulemaking process must allow for public participation and an open
exchange of ideas. We developed this proposed rule in a manner
consistent with these requirements.
The President's January 30, 2017, Executive Order on Reducing
Regulation and Controlling Regulatory Costs, as implemented under
February 2, 2017, Interim Guidance issued by OIRA, imposes certain
requirements for every rule considered significant under E.O. 12866.
First, every new significant rule requires the repeal of two rules.
Second, an agency must fully offset the total incremental cost of
significant new regulations, including repealed regulations, finalized
in fiscal year 2017. Since this proposed rule--which is itself a repeal
of an existing rule--is not a significant rule under E.O. 12866, it
does not require the repeal of two other existing rules, and the agency
is not required to offset its cost against the cost of other fiscal
year 2017 rules.
3. Regulatory Flexibility Act
The Department of the Interior certifies that this proposed rule
would not have a significant economic effect on a substantial number of
small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.). See the 2017 Valuation Rule, Procedural Matters, item 1,
starting at 81 FR 43359, and item 3, starting at 81 FR 43367.
4. Small Business Regulatory Enforcement Fairness Act
This proposed rule is not a major rule under 5 U.S.C. 804(2), the
Small Business Regulatory Enforcement Fairness Act. This proposed rule:
a. Would not have an annual effect on the economy of $100 million
or more. We estimate the maximum effect as a reverse of the impacts
described in the 2017 Valuation Rule, under Procedural Matters, item 1,
starting at 81 FR 43359, and item 4, 81 FR 43368.
b. Would not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions. See the 2017 Valuation Rule, under
Procedural Matters, item 1, starting at 81 FR 43359, and item 4, 81 FR
43368.
c. Would not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises. This
proposed rule would benefit U.S.-based enterprises.
5. Unfunded Mandates Reform Act
This proposed rule would not impose an unfunded mandate on State,
local, or Tribal governments, or the private sector of more than $100
million per year. This proposed rule would not have a significant or
unique effect on State, local, or Tribal governments, or the private
sector. Therefore, we are not required to provide a statement
containing the information set out in the Unfunded Mandates Reform Act
(2 U.S.C. 1501 et seq.). See the 2017 Valuation Rule, under Procedural
Matters, item 1, starting at 81 FR 43359, and item 5 at 81 FR 43368.
6. Takings (E.O. 12630)
Under the criteria in E.O. 12630, this proposed rule would not have
significant takings implications. This proposed rule would apply to
Federal oil, Federal gas, Federal coal, and Indian coal leases only.
This proposed rule would not be a governmental action capable of
interference with constitutionally protected property rights. This
proposed rule does not require a Takings Implication Assessment.
7. Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this proposed rule would not have
sufficient Federalism implications to warrant the preparation of a
Federalism Assessment. The management of Federal oil and gas leases and
Federal and Indian coal leases is the responsibility of the Secretary
of the Interior. This proposed rule would not impose administrative
costs on States or local governments. This proposed rule also does not
substantially and directly affect the relationship between the Federal
and State governments. Because this rule, if promulgated as a final
rule, would not alter that relationship, it does not require a
Federalism summary impact statement.
8. Civil Justice Reform (E.O. 12988)
This proposed rule would comply with the requirements of E.O.
12988, for the reasons we outline in the following paragraphs.
Specifically, this proposed rule:
a. Would meet the criteria of Sec. 3(a), which requires that we
review all regulations to eliminate errors and
[[Page 16325]]
ambiguity and to write them to minimize litigation.
b. Would meet the criteria of Sec. 3(b)(2), which requires that we
write all regulations in clear language using clear legal standards.
9. Consultation With Indian Tribal Governments (E.O. 13175)
The Department strives to strengthen its government-to-government
relationship with the Indian Tribes through a commitment to
consultation with the Indian Tribes and recognition of their right to
self-governance and Tribal sovereignty. Under the Department's
consultation policy and the criteria in E.O. 13175, we evaluated this
proposed rule and determined that it would potentially affect
Federally-recognized Indian Tribes. We determined that this rule would
restore the historical valuation methodology for coal produced from
Indian leases. Our previous and planned activities include:
(a) As described in the 2017 Valuation Rule under Procedural
Matters, item 9, at 81 FR 43368, we consulted with the affected Tribes
on a government-to-government basis in preparing the 2017 Valuation
Rule. We also will consult with the affected Tribes about potential
repeal of the 2017 Valuation Rule.
(b) We will fully consider Tribal views in the final rule.
10. Paperwork Reduction Act
This proposed rule:
(a) Does not contain any new information collection requirements.
(b) Does not require a submission to OMB under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq). See 5 CFR 1320.4(a)(2).
This proposed rule, if promulgated as a final rule, will leave in
tack the information collection requirements that OMB already approved
under OMB Control Numbers 1012-0004, 1012-0005, and 1012-0010.
11. National Environmental Policy Act of 1969 (NEPA)
This proposed rule would not constitute a major Federal action,
significantly affecting the quality of the human environment. We are
not required to provide a detailed statement under NEPA because this
rule qualifies for categorically exclusion under 43 CFR 46.210(i) in
that this is ``. . . of an administrative, financial, legal, technical,
or procedural nature. . . .'' This rule also qualifies for
categorically exclusion under Departmental Manual, part 516, section
15.4.(C)(1) in that its impacts are limited to administrative,
economic, or technological effects. We also have determined that this
rule is not involved in any of the extraordinary circumstances listed
in 43 CFR 46.215 that would require further analysis under NEPA. The
procedural changes resulting from the repeal of the 2017 Valuation Rule
would have no consequences on the physical environment. This proposed
rule would not alter, in any material way, natural resources
exploration, production, or transportation.
12. Effects on the Energy Supply (E.O. 13211)
This proposed rule would not be a significant energy action under
the definition in E.O. 13211, and, therefore, would not require a
Statement of Energy Effects.
13. Clarity of This Regulation
Executive Orders 12866 (section 1(b)(12)), 12988 (section
3(b)(1)(B)), and 13563 (section 1(a)), and the Presidential Memorandum
of June 1, 1998, would require us to write all rules in Plain Language.
This means that each rule that we publish must: (a) Have logical
organization; (b) use the active voice to address readers directly; (c)
use clear language rather than jargon; (d) use short sections and
sentences; and (e) use lists and tables wherever possible.
If you feel that we have not met these requirements, send your
comments to armand.southall@onrr.gov. To better help us revise this
rule, make your comments as specific as possible. For example, you
should tell us the numbers of the sections or paragraphs that you think
we wrote unclearly, which sections or sentences are too long, the
sections where you feel lists or tables would be useful, etc.
14. Public Availability of Comments
Before including your address, phone number, email address, or
other personal identifying information in your comment, you should be
aware that your entire comment--including your personal identifying
information--may be made publicly available at any time. While you can
ask us, in your comment, to withhold your personal identifying
information from public view, we cannot guarantee that we will be able
to do so.
List of Subjects in 30 CFR Parts 1202 and 1206
Coal, Continental shelf, Government contracts, Indian lands,
Mineral royalties, Natural gas, Oil, Oil and gas exploration, Public
lands--mineral resources, Reporting and recordkeeping requirements.
Dated: March 30, 2017.
Amy Holley,
Acting Assistant Secretary for Policy, Management and Budget.
[FR Doc. 2017-06617 Filed 4-3-17; 8:45 am]
BILLING CODE 4335-30-P