[Federal Register Volume 73, Number 82 (Monday, April 28, 2008)]
[Notices]
[Pages 22970-22972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9248]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Notice of Intent To Establish an Indian Oil Valuation Negotiated 
Rulemaking Committee

AGENCY: Minerals Management Service, Interior.

ACTION: Notice of intent to establish an Indian Oil Valuation 
Negotiated Rulemaking Committee; request for nominees and comments.

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SUMMARY: The Minerals Management Service (MMS) is announcing its intent 
to establish an Indian Oil Valuation Negotiated Rulemaking Committee 
(Committee). The Committee will develop specific recommendations 
regarding proposed revisions to the existing Indian Oil regulations for 
oil production from Indian leases, especially the major portion 
valuation requirement. The Committee will include representatives of 
parties who would be affected by a final rule. The MMS solicits 
comments on this initiative and requests interested parties to nominate 
representatives for membership on the Committee.

DATES: You must submit written comments and requests for membership on 
or before May 28, 2008.

ADDRESSES: Submit written comments to Hyla Hurst, Regulatory 
Specialist, Minerals Management Service, Minerals Revenue Management, 
P.O. Box 25165, MS 302B2, Denver, Colorado 80225. If you use an 
overnight courier service or wish to hand-carry your comments, our 
courier address is Building 85, Room A-614, Denver Federal Center, West 
6th Ave. and Kipling Blvd., Denver, Colorado 80225. You may also e-mail 
your comments to us at [email protected]. Include the title of this 
Federal Register notice in the ``Attention'' line of your comment. Also 
include your name and return address. If you do not receive a 
confirmation that we have received your e-mail, contact Ms. Hurst at 
(303) 231-3495.

FOR FURTHER INFORMATION CONTACT: John Barder, Indian Oil and Gas 
Compliance and Asset Management, MMS; telephone (303) 231-3702; fax 
(303) 231-3755; e-mail to [email protected]. Mailing address: 
Minerals Management Service, Minerals Revenue Management, Compliance 
and Asset Management, Indian Oil and Gas Compliance and Asset 
Management, P.O. Box 25165, MS 396B2, Denver, Colorado 80225-0165.

SUPPLEMENTARY INFORMATION:

I. Background

    The existing rule for valuation of oil produced from Indian leases, 
codified at 30 CFR 206.50, was published on March 1, 1988 (53 FR 1184). 
Since then, many changes have occurred in the oil market. Also, 
concerns have arisen about the need for revised valuation methodologies 
to address paragraph 3(c) of standard Indian oil and gas leases, such 
as the major portion analysis requirement for valuation of oil 
production from Indian leases.
    The MMS published proposed rules for Indian oil valuation in 
February 1998 (63 FR 7089) and in January 2000 (65 FR 403). Each of 
these proposed rules was subsequently withdrawn because of market 
changes and the passage of time. In addition, the MMS held a series of 
eight public meetings during 2005 to consult with Indian tribes and 
individual Indian mineral owners and to obtain information from 
interested parties. Then MMS published a third proposed rule in 
February 2006 (71 FR 7453). Tribal and industry commenters on the 2006 
proposed rule did not agree on most issues regarding oil valuation, and 
none of the commenters supported the major portion provisions.
    The Royalty Policy Committee Indian Oil Valuation Subcommittee 
evaluated the 2006 proposed rule but was unable to reach consensus 
about how the Department should proceed. Thus, MMS decided to make only 
technical amendments to the existing Indian oil valuation regulations 
and to convene a negotiated rulemaking committee to make specific 
recommendations regarding the major portion provision. On December 17, 
2007, MMS published a final rule that addressed the technical 
amendments (72 FR 71231).

II. Statutory Provisions

    The Negotiated Rulemaking Act of 1996 (NRA) (5 U.S.C. 561 et seq.); 
the Federal Advisory Committee Act (FACA) (5 U.S.C. Appendix 2, section 
1 et. seq.); the Indian Mineral Development Act of 1982 (25 U.S.C. 
2101-2108); 30 CFR part 206 (2007), 25 CFR part 225 (2007); and Indian 
oil and gas lease and agreement terms.

III. The Committee and Its Process

    In a negotiated rulemaking, a proposed rule is developed by a 
committee composed of representatives of government and the interests 
that will be significantly affected by the rule. Decisions are made by 
``consensus.''

    ``[C]onsensus'' means unanimous concurrence among the interests 
represented on a negotiated rulemaking committee established under 
this subchapter, unless such committee (A) agrees to define such 
term to mean a general but not unanimous concurrence; or (B) agrees 
upon another specified definition.

5 U.S.C. 562(2)(A) and (B)

    The negotiated rulemaking process is initiated by the agency's 
identification of interests potentially affected by the rulemaking 
under consideration. By this notice, MMS is soliciting comments on this 
action.
    Following receipt of comments, MMS will establish a negotiated 
rulemaking

[[Page 22971]]

committee representing the identified interests to negotiate the 
provisions of a proposed rule. The MMS will be a member of the 
committee to represent the Federal Government's statutory mission. The 
committee will be chaired by a facilitator. After the committee reaches 
consensus on the provisions of a proposed rule, MMS will develop a 
proposed rule to be published in the Federal Register.
    Section 563 of the NRA requires the head of the agency to determine 
that the use of the negotiated rulemaking procedure is in the public 
interest. In making such a determination, the agency head must consider 
certain factors. The MMS has determined a negotiated rulemaking is in 
the public interest because:
    1. A rule is needed. Royalty payors have considerable difficulty in 
complying with the current regulations.
    2. A limited number of identifiable interests will be significantly 
affected by the rule. Such interests are oil and gas companies who 
produce oil and pay royalties on Indian leases, and Indian tribes and 
individual Indian mineral owners who receive royalties from oil 
produced from Indian leases located on their lands.
    3. There is a reasonable likelihood that a committee can be 
convened with a balanced representation of persons who can adequately 
represent the interests discussed in paragraph (2), and MMS will be 
able to determine that the interests are willing to negotiate in good 
faith to attempt to reach a consensus on provisions of a proposed rule.
    4. There is a reasonable likelihood that the committee will reach 
consensus on a proposed rule within a fixed period of time.
    5. The use of negotiated rulemaking will not unreasonably delay the 
development of a proposed rule if time limits are placed on the 
negotiation. It is anticipated that negotiation will expedite a 
proposed rule and ultimately the acceptance of a final rule.
    6. The MMS is making a commitment that it will ensure the committee 
has sufficient resources to complete its work in a timely fashion.
    7. The MMS, to the maximum extent possible, consistent with its 
statutory mission and the legal obligations of the agency, will seek to 
use the consensus of the committee as the basis for a proposed rule for 
public notice and comment.

IV. Negotiated Rulemaking Procedures

    In compliance with FACA and NRA, MMS will use the following 
procedures and guidelines for this negotiated rulemaking. The MMS may 
modify them in response to comments received on this notice or during 
the negotiation process.

A. Committee Formation

    A committee will be formed and operated in full compliance with the 
requirements of FACA and NRA and specifically under the guidelines of 
its charter.

B. Interests Involved

    The MMS intends to ensure full and adequate representation of those 
interests that are expected to be significantly affected by the 
proposed rule. Under Section 562(5) of the NRA, ``interest means, with 
respect to an issue or matter, multiple parties which have a similar 
point of view or which are likely to be affected in a similar manner.'' 
As discussed above, MMS believes the interests significantly affected 
are oil and gas companies who produce oil and pay royalties on Indian 
leases, and Indian tribes and individual Indian mineral owners who 
receive royalties from oil produced from Indian leases located on their 
lands.

C. Members

    The committee should not exceed 25 members, and MMS prefers 15. The 
MMS will provide at least two members plus a facilitator. The 
facilitator will not count against the membership.
    Section 568(c) of the NRA states:

    Members of a negotiated rulemaking committee shall be 
responsible for their own expenses of participation in such 
committee, except that an agency may, in accordance with section 
7(d) of the FACA, pay for a member's reasonable travel and per diem 
expenses, expenses to obtain technical assistance, and a reasonable 
rate of compensation, if
    (1) Such member certifies a lack of adequate financial resources 
to participate in the committee; and
    (2) The agency determines that such member's participation in 
the committee is necessary to assure an adequate representation of 
the member's interest.

    Therefore, MMS commits to pay the travel and per diem expenses of 
committee members if appropriate under the NRA and the Federal travel 
regulations.

D. Request for Nominations

    The MMS solicits nominations for appointment to membership on the 
committee. Members can be individuals or representatives of 
organizations. An organization should identify the individual who will 
be its representative.
    Committee members need to have authorization to negotiate on behalf 
of their interests and be willing to negotiate in good faith. MMS 
interprets good faith to include: (1) A willingness to bring all issues 
to the table; and (2) not to discuss the issues in other forums. Good 
faith also includes a willingness to move away from taking adversarial 
positions and instead to explore openly all relevant and productive 
ideas that may emerge from the discussion of the committee.
    Authorization for each application or nomination must include:
    1. The name of the applicant or nominee and a description of the 
interests such person will represent;
    2. A description of the person's qualifications and expertise 
regarding those interests;
    3. Whether the participant will be seeking agency resources to 
participate on the committee; and
    4. A written commitment of the applicant or nominee to actively 
participate in good faith in the negotiated rulemaking and keep all 
issues at the table.

E. Tentative Schedule

    When MMS publishes a notice establishing the committee and 
appointing its members, it will include a proposed agenda and schedule 
for completing the work of the committee, including a date for the 
first meeting. The committee will agree on dates, times, and locations 
of future meetings. The MMS plans to terminate the committee if it does 
not reach consensus on the provisions of a proposed rule within 24 
months of the first meeting. The committee may end earlier if the 
committee itself so recommends.

V. Request for Nominations and Comments

    To comply with negotiated rulemaking procedures, MMS invites 
written comments on this initiative and nominations for the negotiated 
rulemaking committee. Written comments are specifically requested on 
the suitability of using the negotiated rulemaking procedure to develop 
a proposed valuation rule for oil production from Indian leases. 
Nominations are for all interests that could be affected by an Indian 
oil valuation rulemaking and must comply with paragraph IV, D, Request 
for Nominations, of this notice. All written comments and nominations 
must be sent to an appropriate address as listed in the ADDRESSES 
section of this notice.

Certification

    For the above reasons, I hereby certify that the Indian Oil 
Valuation Negotiated Rulemaking Committee is in the public interest.


[[Page 22972]]


    Dated: April 16, 2008.
C. Stephen Allred,
Assistant Secretary for Land and Minerals Management.
 [FR Doc. E8-9248 Filed 4-25-08; 8:45 am]
BILLING CODE 4310-MR-P