Tipton trying to roll back rule on mineral-royalty valuations

U.S. Rep. Scott Tipton is trying to roll back an Interior Department rule addressing valuation of federal coal, oil and gas production for royalty purposes, in the latest effort by Republicans to rescind regulations enacted by the Obama administration.

Tipton, R-Colo., and U.S. House Majority Whip Steve Scalise, R-La., have introduced a resolution that would use the Congressional Review Act to repeal the measure released last June by Interior’s Office of Natural Resources Revenue.

In a news release, the two said the rule changed how energy producers must report and price mineral resources developed on federal land, forced them to overhaul their accounting systems to comply, dictated a one-size-fits-all mandate on pricing without accounting for each producer’s size and unique challenges, and created confusion and uncertainty by transforming the valuation process for coal.

“The federal government shouldn’t be picking winners and losers when it comes to U.S. energy production, and this is exactly what the ONRR’s regulation does,” Tipton said in the release.

At the time, the ONRR had said it needed to update its regulations for valuing production to bring them in line with current market conditions. One thing the new rule seeks to prevent is situations where coal companies might be able to sell their product to an affiliated company at a discount to pay lower royalties, only to have the affiliate resell the coal for far more overseas.

Among other things, the new rule also eliminated certain cost allowances for producers when valuing oil and gas for royalty purposes.

The group Center for Western Priorities on Tuesday blasted Tipton’s measure, saying the regulation closed a loophole that cost taxpayers an average of $124 million a year.

“After years of donating heavily to Representative Tipton, coal companies are finally getting their wish. Rather than giving Americans a fair share from the resources we all own, Representative Tipton wants to turn back the clock and let coal companies go back to scamming taxpayers,” the group’s deputy director, Greg Zimmerman, said in a news release.

Last year’s rule also received support from groups such as Taxpayers for Common Sense and Earthjustice. The Colorado Mining Association, National Mining Association and Western Energy Alliance oil and gas group all oppose it.

So does Tri-State Generation and Transmission Association, which operates coal-fired plants in the Craig and Nucla areas and says the measure could result in higher electricity rates for consumers in Colorado and other states.

Congress already has voted to scrap an Obama administration stream-protection rule applying to coal mines. The measure is expected to be signed by President Trump.

The House also has voted to reverse a new Bureau of Land Management rule aimed at reducing methane emissions related to oil and gas development. The Senate hasn’t acted on the matter.


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