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Tipton, Scalise Introduce Resolution to Roll Back Costly, Ill-Conceived Mineral Valuation Rule

February 14, 2017
Press Release

Congressman Scott Tipton (CO-03) and Majority Whip Steve Scalise (LA-01) have introduced a resolution that will void a midnight rule from the Obama Administration that places undue  accounting burdens on U.S. energy producers and a new level of complexity on the mineral valuation process.

H.J.Res. 71 rolls back a regulation out of the Interior Department’s Office of Natural Resources Revenue (ONRR) that changed the way energy producers must report and price mineral resources that are developed on federal land. Under the ONRR mineral valuation regulation, energy producers must overhaul their accounting systems to fulfill several new reporting requirements. The regulation also dictates a one-size-fits-all mandate on pricing, without accounting for the size and unique challenges of each producer. Additionally, the ONRR regulation transformed the valuation process for coal, creating confusion and uncertainty for producers.

Tipton said, “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. By adding more red-tape, complexity, and confusion to the mineral valuation process, the regulation creates uncertainty for businesses, a disincentive for responsible development of our natural resources on federal land, and ultimately hurts hardworking Americans, their families, and their communities the most.”

Scalise said, “In his last days in office, President Obama snuck through a regulation that is nothing but a shadow tax on American energy that will impede energy production across the country, including offshore energy projects important to my home state of Louisiana. 

“The legislation I filed today with Congressman Tipton reverses President Obama's regulation, so we can block his energy tax and protect those critical revenue sharing dollars that states like Louisiana will use to restore our coast. If this regulation is not halted, federal revenue from energy production will be reduced, and in Louisiana, it could jeopardize state revenue sharing dollars, hindering our ability to make major investments to restore our coast and protect Louisiana families and businesses from devastating storms.

“This proposal came from the same President who tried unsuccessfully to repeal revenue sharing for Gulf Coast states, and I am committed to reversing this - and any other - regulation that threatens our ability to restore our coast and protect Louisiana families and our way of life. It is important that we pass this legislation quickly and get it onto President Trump’s desk so he can sign it into law.”

The ONRR’s regulation has drawn opposition from producers and industry groups.

Mike McInnes, CEO of Tri-State Generation and Transmission Association, Inc., said, “ONRR’s proposal is at best – complicated and convoluted – and at worst – would raise rates for the member-owners (consumers) of the 43 not-for-profit electric cooperatives and public power districts to which Tri-State sells cost-based electricity in Colorado, Nebraska, New Mexico and Wyoming.”

The National Mining Association said, “The rule alters the valuation of royalties on federal coal leases by discouraging production from federal lands that account for a significant share of total electricity generation, scares away investment, leads to further job losses, increases the price of energy on middle and low-income families and eliminates billions of dollars in state and federal revenue.”