Office of Natural Resources Revenue May 27, 2011 – Federal Register Recent Federal Regulation Documents

The Office of Natural Resources Revenue (ONRR) requests comments and suggestions from affected parties and the interested public before proposing changes to the existing regulations governing the valuation of oil and gas produced from Federal onshore and offshore oil and gas leases, for royalty purposes. The existing Federal oil valuation regulations have been in effect since 2000, with a subsequent amendment relating primarily to the use of index pricing in some circumstances. The existing Federal gas valuation regulations have been in effect since March 1, 1988, with various subsequent amendments relating primarily to the transportation allowance provisions. These regulations have not kept pace with significant changes that have occurred in the domestic gas market during the last 20-plus years. This notice is intended to solicit comments and suggestions for possible new methodologies to establish the royalty value of oil and gas produced from Federal leases. The ONRR plans to hold public workshops to discuss possible changes to the oil and gas valuation regulations after the written comment period closes and ONRR has had a reasonable time to review and analyze the comments. The ONRR will announce any public workshops in a future Federal Register notice. Getting feedback upfront and involving all affected stakeholders in the rulemaking process are the hallmarks of good government and smart business practice. The intention of this rulemaking process is to provide regulations that would offer greater simplicity, certainty, clarity, and consistency in production valuation for mineral lessees and mineral revenue recipients; be easy to understand; decrease industry's cost of compliance; and provide early certainty to industry and ONRR that companies have paid every dollar due. The ONRR intends that the final regulations will be revenue neutral.