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The Office of Natural Resources Revenue (ONRR) is repealing the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform Final Rule, published July 1, 2016, and effective January 1, 2017. Simultaneously, ONRR is reinstating the valuation regulations governing the valuation of Federal oil, Federal gas, and Federal and Indian coal that were in effect before January 1, 2017.


This final rule repeals in its entirety the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform Final Rule (2017 Valuation Rule) that ONRR published in the Federal Register on July 1, 2016 (81 FR 43338), and that was effective on January 1, 2017. The 2017 Valuation Rule made changes to existing regulations governing royalty valuation and reporting practices for oil, gas, and coal. As stated in the 2017 Valuation Rule's preamble, the purpose of implementing the rule was (1) to offer greater simplicity, certainty, clarity, and consistency in product valuation for mineral lessees and mineral revenue recipients; (2) to ensure that Indian mineral lessors receive the maximum revenue from coal resources on their land, consistent with the Secretary's trust responsibility and lease terms; (3) to decrease industry's cost of compliance and ONRR's cost to ensure industry compliance; and (4) to provide early certainty to industry and to ONRR that companies have paid every dollar due. 81 FR 43338.


After the 2017 Valuation Rule was published, however, ONRR discovered several significant defects in the rule that would have undermined its purpose and intent. In addition, during the same time period (July 1, 2016, to the present) we received numerous comments from the regulated community and other members of the public, both in response to the proposed rule of repeal that we published in the Federal Register on April 4, 2017, and in other public forums, that were highly critical of certain provisions in the rule.


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