[Federal Register Volume 76, Number 175 (Friday, September 9, 2011)]
[Proposed Rules]
[Pages 55838-55839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23104]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

30 CFR Parts 1202 and 1206

[Docket No. ONRR-2011-0005]
RIN 1012-AA01


Workshops To Discuss Revisions to Federal Oil and Gas Royalty 
Valuation Regulations: Advance Notice of Proposed Rulemaking

AGENCY: Office of Natural Resources Revenue, Interior.

ACTION: Notice of public workshops.

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SUMMARY: The Office of Natural Resources Revenue (ONRR) announces three 
public workshops to discuss specific issues regarding the existing 
Federal oil and gas royalty valuation regulations at 30 CFR parts 1202 
and 1206 for oil and gas produced from Federal onshore and offshore oil 
and gas leases.

DATES: The public workshop dates and cities are:
    Workshop 1--September 27, 2011 (8:30 a.m. to 12 p.m. central time) 
in Houston, Texas.
    Workshop 2--September 29, 2011 (8:30 a.m. to 12 p.m. eastern time) 
in Washington DC.
    Workshop 3--October 4, 2011 (8:30 a.m. to 12 p.m. mountain time) in 
Denver, Colorado.

ADDRESSES: The public workshop locations are:
    Workshop 1--JW Marriott Houston, 5150 Westheimer Road, Houston, 
Texas 77056-5506, telephone number (713) 961-1500.
    Workshop 2--Main Interior Building, 1849 C Street, NW, Washington, 
DC 20240 (Yates Auditorium), telephone number (202) 254-5573.
    Workshop 3--Office of Natural Resources Revenue, Denver Federal 
Center, 6th Avenue and Kipling Street, Building 85, Auditoriums A-D, 
Denver, Colorado 80226, telephone number (303) 231-3585.

FOR FURTHER INFORMATION CONTACT: Hyla Hurst, Regulatory Specialist, 
Office of Natural Resources Revenue, P.O. Box 25165, MS 61013C, Denver, 
Colorado 80225, telephone (303) 231-3495, fax number (303) 233-2225, e-
mail [email protected].

SUPPLEMENTARY INFORMATION: The comment period for the Advance Notice of 
Proposed Rulemaking (ANPR) for Federal oil and gas valuation closed on 
July 26, 2011. The ONRR received responses from 19 commenters 
representing states, industry, industry trade associations, and the 
general public. We appreciate the feedback and hope to obtain 
additional input at the public workshops. You may find it helpful to 
review the comments prior to your attendance at one of the workshops. 
You may access the comments at http://www.onrr.gov/Laws_R_D/PubComm/AA01rmpc.htm.
    As indicated in the ANPR, the intention of this rulemaking process 
is to provide regulations that would (1) Offer greater simplicity, 
certainty, clarity, and consistency in production valuation for mineral 
lessees and mineral revenue recipients; (2) be easy to understand; (3) 
decrease industry's compliance costs; and (4) provide early certainty 
to industry and ONRR that companies have paid every dollar due.
    The ONRR is seeking further public comment on the following issues:

[[Page 55839]]

    (1) Using index prices to value oil and gas. Commenters generally 
agreed that the use of index pricing to determine the value of Federal 
oil production for royalty purposes under the existing rules is working 
well. The ONRR invites other suggestions to improve the oil valuation 
regulations. Comments on the use of index pricing in valuing Federal 
gas for royalty purposes were sharply divided. The ONRR invites more 
specific comments as to whether index pricing could possibly replace 
gross proceeds in valuing Federal gas production.
    (2) Examining possible alternatives to the requirement to track 
costs for determining gas transportation. Comments on this issue were 
divided. The ONRR invites specific comments on alternative methods for 
calculating actual transportation costs that would adjust for location 
differences between the lease or unit and the index pricing point.
    (3) Considering accounting for the value of liquid hydrocarbons 
contained in the gas stream by applying an adjustment or ``bump'' to 
the index price. Generally, commenters provided that they would support 
an alternative method for calculating the actual costs to process gas 
if it were truly revenue neutral. However, ONRR invites suggestions 
regarding other methodologies that would simplify the valuation and 
reporting of processed gas.
    (4) The ONRR also is interested in receiving comments on any other 
alternative valuation methodologies that would provide additional 
levels of clarity, efficiency, and early certainty to the industry and 
Federal Government. In addition to the specific issues identified 
above, we invite participants to comment on any other significant 
issues impacting the value of Federal oil and natural gas for royalty 
purposes.
    We encourage stakeholders and members of the public to participate. 
The workshops will be open to the public without advance registration; 
however, attendance may be limited to the space available at each 
venue. For building security measures, each person may be required to 
present a picture identification to gain entry to the meetings.

     Dated: September 2, 2011.
Gregory J. Gould,
Director for Office of Natural Resources Revenue.
[FR Doc. 2011-23104 Filed 9-8-11; 8:45 am]
BILLING CODE 4310-MR-P