Regulators want to change energy pricing rules for federal land

Federal land managers will release proposed rules next month to change the pricing structure for oil, natural gas and coal leases on public land.

The proposed rules are the key part of an effort the Interior Department has taken in recent years to better ensure that it is getting fair prices for federal energy resources.


It comes after watchdog agencies, lawmakers and outside groups have criticized Interior for not properly accounting for environmental harm in its leasing programs and giving away energy resources for bargain prices.

Current oil and gas valuation rules are more than two decades old and coal rules are a decade old, Interior said Friday. The coal rules would also apply to American Indian land.

“Coal produced on public lands is an important part of our domestic energy portfolio, but we have an obligation — and we are fully committed — to ensure that the American taxpayer receives a fair return for the production of domestic energy resources,” Deputy Interior Secretary Mike Connor said in a statement.

“The initial steps we are taking are part of the larger effort to strengthen the management of coal production on public lands by providing greater certainty and predictability to the industry and helping to protect American taxpayers,” Connor said.

The rules, written by the Office of Natural Resources Revenue and the Bureau of Land Management, will be published next month in the Federal Register, and the agencies did not release them Friday.

In addition to potentially undervaluing federal minerals, the current rules can be burdensome for coal, oil and gas producers, who must follow benchmark pricing when selling the products to other companies.

Interior wants to fix that “and other issues caused by outdated rules with more clear regulations that better reflect the changing energy industry, while protecting taxpayer and American Indian assets,” it said.

Interior will gather comments from the public for 60 days on the proposals before making them final.