State sues feds over rules on mining
The Trump administration has illegally blocked rules that would require oil, gas and coal companies to pay an additional $78 million a year in royalties from mining on federal lands, the states of California and New Mexico charged in a lawsuit in San Francisco federal court.
The rules were adopted by President Barack Obama’s administration in July, after five years of deliberations and public hearings, and took effect Jan. 1, three days after coal and oil companies had challenged them in federal court in Wyoming.
On Feb. 22, President Trump’s Interior Department — headed by Ryan Zinke, who as a Montana congressman had fought the Obama rules — said
it had “decided to postpone” those regulations in view of the pending lawsuit.
The department’s Office of Natural Resources Revenue filed a notice April 4 that it would seek to repeal the rules. House Republican leaders have introduced separate legislation that would overturn the rules.
In the suit filed Wednesday, lawyers for California and New Mexico argued that the government had no legal authority to “postpone” rules that had already taken effect. They seek a court order reinstating the Obama administration regulations.
“The Trump administration has once against displayed its disdain for playing by the rules,” California Attorney General Xavier Becerra said in a statement. “The winners here are the private mining interests which profit from paying less for our natural resources. The losers are — surprise, surprise — the American taxpayers.”
The Interior Department declined to comment. The rules increased the valuation, and resulting royalties to federal and state governments, of fossil fuels extracted from federal lands.
Obama administration officials said coal companies leasing federal lands had been reducing their royalty payments, under the previous regulations, by selling coal to their subsidiaries at belowmarket prices. The new rules allow the Interior Department to determine a “reasonable value of production” when companies have understated the value of their extractions, and also to consider higher prices that would be paid for minerals exported abroad.
Becerra said the Obama administration estimated that its rules would generate more than $60 million a year in additional royalties to the federal government and $18 million to the states.
California has 7,900 oil and natural-gas wells on more than 200,000 acres of federal land in the state and has received an average of $82.5 million a year in royalties since 2008, the suit said. It said New Mexico, second only to Wyoming in oil and gas production on its federal lands, has received $470 million a year.