For Immediate Release:
November 30, 2020
Contact: Matt Baca — (505) 270-7148
Santa Fe, NM – New Mexico Attorney General Hector Balderas and California Attorney
General Xavier Becerra today submitted comments opposing the Department of the
Interior’s (DOI) proposal to undermine key requirements of the Valuation Rule. Finalized
in July 2016, the Valuation Rule replaced antiquated regulations that determined how
much producers must pay in royalties for the oil, gas, and coal they extract from public
and tribal lands. In the comment letter, Attorneys General Balderas and Becerra argue
that the proposed rule violates the Administrative Procedure Act, undervalues our nation’s
natural resources, and enriches the fossil fuel industry at the expense of the American
people and the environment.
“The Courts have agreed twice that the attempts to repeal this rule have been unlawful;
and we will continue to fight to ensure that the rule of law is followed and that the federal
government fulfills its trust obligations to tribes and New Mexican schoolchildren, who
should receive the proper royalties they are owed,” said Attorney General Balderas.
On October 1, 2020, DOI published a proposed rule that would eliminate several key
requirements of the Valuation Rule “in order to return to the definitions and practices that
had been in place since the 1980s.” The proposal would have the effect of reducing the
amount of royalties collected on fossil fuels extracted from federal land and thus, the
revenue California and New Mexico receive from such royalties.
In the comment letter, Attorneys General Balderas and Becerra argue that the proposed
rule is arbitrary and capricious in violation of the Administrative Procedure Act because:
• DOI’s primary rationale for the proposed rule is directly contradicted by the factual
record, which shows that this rulemaking will actually increase administrative
burdens and have no impact on energy production;
• DOI’s reliance on the alleged “deficiencies” in the Valuation Rule identified by the
District of Wyoming is misguided because the District Court has only ruled on
the motion for a preliminary injunction. California, New Mexico, and DOI are
currently defending the merits of the the rule in Court; and
• DOI has entirely failed to consider the many important reasons for its enactment
of the Valuation Rule, such as ensuring the accurate calculation of royalties from
the development of public resources, fulfilling it trust responsibilities on tribal
lands, and ensuring industry compliance with legal obligations.
Attorneys General Balderas and Becerra have repeatedly defended the Valuation Rule
from the Trump Administration’s attempts to both postpone and repeal the rule’s
requirements. Shortly after the change in administrations in early 2017, DOI issued a
notice attempting to postpone the Valuation Rule’s requirements. Attorneys General
Balderas and Becerra filed a lawsuit challenging DOI’s failure to implement the rule, and
in August 2017, a federal district court agreed that DOI acted unlawfully in its attempt to
postpone implementation of the rule. Simultaneously, DOI began a process to repeal the
Valuation Rule in its entirety. In public comments, Attorneys General Balderas and
Becerra urged DOI to not move forward with a repeal that would reopen loopholes
exploited by coal companies and deprive taxpayers of a fair return on public resources.
Nonetheless, DOI went ahead with the repeal without offering any reasoned basis for
doing so. Attorney General Becerra filed a lawsuit challenging the repeal, and the federal
district court subsequently ruled this action unlawful as well. In July 2019, Attorneys
General Becerra and Balderas filed a motion to intervene in Cloud Peak Energy v. U.S.
Department of the Interior to defend the Valuation Rule against corporate interests.
A copy of the comment letter is attached.