California Lawyer Normal and New Mexico Lawyer Normal Oppose Trump Administration Newest Effort to Undermine Valuation Rule on How A lot Producers Should Pay in Royalties For the Oil, Gasoline, and Coal They Extract From Public and Tribal Lands

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December 1, 2020 – SACRAMENTO – California Attorney General Xavier Becerra and New Mexico Attorney General Hector Balderas issued comments against the Department of the Interior’s (DOI) proposal to undermine key requirements of the assessment rule. The valuation rule, completed in July 2016, replaced obsolete regulations that stipulated how much producers had to pay royalties for the oil, gas, and coal they extract from public and tribal areas. In the comment, Attorneys General Becerra and Balderas argue that the proposed rule violates the Administrative Procedure Act, undervalues ​​our country’s natural resources, and enriches the fossil fuel industry at the expense of the American people and the environment.

“The Trump administration uses the same tired game book to help polluters at the American taxpayer’s expense. We have beaten DOI in court twice to stop its illegal attempts to delay and repeal the rating rule. ” said Attorney General Becerra. “On the way to the door, the Trump administration has become embarrassingly transparent as it throws weak, illegal proposals against the wall to see what’s stuck. We anticipated that and are confident we will get the final results of the inning. “

On October 1, 2020, DOI published a rule proposal aimed at eliminating several key requirements of the assessment rule “in order to return to the definitions and practices that have been in place since the 1980s”. The proposal would reduce state fossil fuel royalties, and hence the revenue California and New Mexico receive from such royalties.

In the comment letter, Attorneys General Becerra and Balderas argue that the proposed rule is arbitrary and capricious in violation of the Administrative Procedure Act because:

  • DOI’s main reasons for the proposed rule are directly disproved by the facts which show that this rule-making actually increases the administrative burden and has no impact on energy production.
  • DOI’s reliance on the Wyoming District’s alleged “flaws” in the assessment rule is false, as the district court only ruled on the injunction motion. California, New Mexico and DOI are currently defending the benefits of the rule in court. and
  • DOI completely disregarded the many important reasons for adopting the valuation rule, such as ensuring an accurate calculation of royalties from public resource development, fulfilling its trust responsibility for tribal areas, and industry compliance with legal obligations.

Attorneys General Becerra and Balderas have repeatedly defended the assessment rule against attempts by the Trump administration to both postpone and repeal the rule’s requirements. Shortly after the change in administration in early 2017, DOI published a notice attempting to shift the requirements of the assessment rule. Attorneys General Becerra and Balderas filed a lawsuit against DOI’s failure to enforce the rule. In August 2017, a federal district court agreed that DOI had acted illegally in its attempt to postpone implementation of the rule. At the same time, DOI initiated a procedure to abolish the assessment rule in its entirety. In public comments, Attorneys General Becerra and Balderas urged DOI not to push a repeal that would reopen the loopholes exploited by coal companies and deprive taxpayers of a fair return on public funds. Despite this, DOI continued the repeal without providing a reasonable basis for it. Attorney General Becerra filed a lawsuit against the waiver, and the federal district court ruled that lawsuit also unlawful. In July 2019, Attorneys General Becerra and Balderas filed a motion to intervene in Cloud Peak Energy against the U.S. Department of the Interior to defend the valuation rule against corporate interests.

A copy of the comment can be found here.
Source: CA. DOJ