The Trump administration took steps to rein in the Interior Department this week by canceling a new rule that has raised the cost for crude oil, natural gas and coal companies operating on federal lands.
The Interior Department took the unusual step late Thursday of halting its new royalty valuation rule for energy commodities, after a coalition of industry groups sued the agency over the regulation, which was enacted in the waning days of the Obama administration.
The department’s Office of Natural Resources Royalties issued a letter telling energy lessees that the Feb. 28 implementation deadline for the new valuation regulation has been stayed, pending the results of litigation being reviewed by the District Court in Wyoming.
The 2017 Evaluation Rule is meant to update the federal royalty system that energy companies must abide by to operate on federal lands. The royalty system accounts for the fees companies must pay to the government for each unit of oil, natural gas and coal that is extracted under a particular lease.
The new rules have been criticized for being overly burdensome and costly. The valuation rule also corresponds to the moratorium the Obama administration imposed on new coal leases to evaluate how it could restructure the lease program to better reflect the costs of mining, including the costs imposed by climate change.
President Trump is expected to issue an executive order in the coming days that rescinds the coal moratorium in meeting his promise of putting coal miners back to work.
Trump told a major gathering of conservatives in Maryland Friday that he will be taking “bold action to lift the restrictions on energy,” and that the “miners are going back to work.”
House Natural Resources Committee Chairman Rob Bishop, R-Utah, praised the administration on Friday for halting the valuation rule, but he said he still wants to see the agency finish the job by dismantling the rule.
“The Trump administration made the right decision to suspend this illogical and legally dubious rule,” Bishop said. “It is already causing uncertainty for future investment and development on federal and tribal lands and increasing electricity rates for rural communities including those in my district.”
Bishop warned that the “next step” should be to vacate the rule “permanently and avoid Congress having to do it for them.”
