May 29, 2015- WASHINGTON – The Bureau of Land Management (BLM) announced today that it is extending the public comment period on its Advance Notice of Proposed Rulemaking (ANPR) to seek public comment on potential updates to BLM rules governing oil and gas royalty rates, rental payments, lease sale minimum bids, civil penalty caps and financial assurances.
Notice of the two-week extension, which extends the comment period deadline to June 19, 2015, will be published in the Federal Register on June 3, 2015.
Modernizing the BLM’s royalty rate structures can provide greater flexibility, especially given the dramatic growth of oil development on public and tribal lands, where production has increased in each of the past six years, and combined production was up 81 percent in 2014 versus 2008. Potential changes to BLM’s regulations would also respond to concerns expressed by the Government Accountability Office (GAO), Interior’s Office of Inspector General, and others that the BLM’s existing rules lack flexibility and could be causing the United States to forgo significant revenue to the detriment of taxpayers.
The GAO has repeatedly concluded that the BLM’s regulations do not provide a reasonable assurance that the public is getting appropriate fair share of the revenue from these resources. The BLM’s current rules lack the flexibility to offer new competitive leases at higher royalty rates.
The ANPR also addresses the value of these resources by inviting comment on how the BLM might update its rules regarding the minimum acceptable bid that must be paid by parties seeking a lease at auction, and the annual rental payments that are due after a lease is obtained. The current minimum acceptable auction bid is $2 per acre, which is well below the rate at which most parcels sell, suggesting that the rate could be higher. After obtaining a lease, a lessee is currently required to make annual rental payments until the lease starts producing oil or gas. These rental rates currently are $1.50 per acre for the first five years and $2 for years five through 10. The ANPR invites comment on how rental payments might be better structured to incentivize diligent development of leased areas.
The BLM encourages the public to be actively engaged in this process by submitting comments on the revised proposed rule before June 19 in one of the following ways:
Mail: U.S. Department of the Interior, Director (630), Bureau of Land Management, Mail Stop 2134 LM, 1849 C St. NW, Washington, DC, 20240, Attention: 1004-AE41.
Personal or messenger delivery: Bureau of Land Management, 20 M. St. SE, Room 2134 LM, Attention: Regulatory Affairs, Washington, DC 20003.
Online at the Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments at this Website.
To read the original advance notice of public rulemaking go to: http://www.gpo.gov/fdsys/pkg/FR-2015-04-21/pdf/2015-09033.pdf
BLM Extends Public Comment Period to June 19, 2015 on Oil and Gas Royalty Rulemaking
- Details
