Daily Rules, Proposed Rules, and Notices of the Federal Government


Office of Natural Resources Revenue

30 CFR Parts 1202 and 1206

[Docket No. ONRR-2011-0004]

RIN 1012-AA00

Workshops To Discuss Revisions to Federal and Indian Coal Valuation Regulations: Advance Notice of Proposed Rulemaking

AGENCY: Office of Natural Resources Revenue, Interior.
ACTION: Notice of Public Workshops.
SUMMARY: The Office of Natural Resources Revenue (ONRR) announces three public workshops to discuss specific issues regarding the existing royalty valuation regulations at 30 CFR parts 1202 and 1206 for coal produced from Federal and Indian leases.
DATES: Workshop 1--October 12, 2011 (8:30 a.m.-12 p.m. mountain time) in Denver, Colorado.

Workshop 2--October 18, 2011 (8:30 a.m.-12 p.m., central time) in St. Louis, Missouri.

Workshop 3--October 20, 2011 (8:30 a.m.-12 p.m. mountain time) in Albuquerque, New Mexico.

ADDRESSES: Workshop 1--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.

Workshop 2--Marriott St. Louis Airport, 10700 Pear Tree Lane, St. Louis, Missouri 63134, telephone number (314) 423-9700.

Workshop 3--Bureau of Land Management, Albuquerque District Office, 435 Montano Road, NW., Albuquerque, New Mexico 87102, telephone number (505) 761-8700.

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,

The comment period for the Advance Noticeof Proposed Rulemaking (ANPR) for Federal and Indian coal valuation closed on July 26, 2011. The ONRR received responses from 11 commenters representing industry, a tribe, a state, a community group (representing several member groups), 2 coal publications, and 3 trade groups. 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

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:

(1) Using index prices to value coal. Commenters were mixed on the subject of using index prices to value coal. Some commenters noted the perceived lack of available indices or pricing mechanisms for some regions and for Indian coal. If ONRR does move forward in using index prices to value coal for royalty purposes on a limited basis, for what regions does this approach make sense?

(2) Examining possible alternatives for the use of gross proceeds to value coal sold at arm's-length. Commenters generally provided that no changes to arm's-length valuation were necessary. Is there any support to develop alternatives for the use of gross proceeds in valuing coal sold at arm's length?

(3) Examining possible alternatives to improve non-arm's-length valuation. Comments on this issue were mixed. The ONRR invites more specific comments on the reasons that current rules should be maintained or revised and other suggestions to improve non-arm's-length coal valuation regulations.

(4) Examining the possible use of separate valuation methods for lessees that are coal cooperatives or for lessees that consume their coal. Comments on this issue were divided. The ONRR invites comments on whether separate valuation methods are needed for coal cooperatives and lessees that consume lease coal and suggestions regarding methodologies that would be appropriate.

(5) Simplifying the methods for determining coal transportation and washing allowances. Comments on this issue were generally in favor of maintaining the status quo and basing allowances on reasonable, actual costs. However, ONRR invites suggestions regarding other methodologies that would simplify the determination of transportation and washing allowances.

The ONRR is also 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 and Indian coal for royalty purposes.

Executive Order 13175 requires the Federal Government to consult and collaborate with the Indian community (tribes and individual Indian mineral owners) in the development of Federal policies that impact the Indian community. The locations of the workshops were chosen to allow for increased participation by the Indian community.

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.