DOI forming committee to update American Indian oil valuation

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 28 -- The US Department of the Interior will propose formation of a negotiated rulemaking committee to replace outdated regulations governing valuation of crude oil produced on American Indian lands, Interior Sec. Ken Salazar announced. The committee will make recommendations to replace regulations which have been in place since Mar. 1, 1988, he said.

“This initiative will enable the regulatory process to keep pace with a changing marketplace, ensuring that tribal nations and individual Indian owners continue to receive a fair rate of return on these assets and offering certainty and consistency to industry in valuing these resources,” Salazar said on Jan. 28.

The committee, which will be established under the Federal Advisory Committee Act, will include representatives of communities, stakeholder and regulatory groups, and other interested parties who will be affected by the final rule, including American Indians, oil producers, and federal regulators, he said.

Salazar said the initiative would particularly focus on the “major portion valuation requirement” which establishes the method for setting the highest price paid for most of the oil produced in a certain area.

He said new valuation regulations also would add certainty and consistency for producers recovering oil on tribal and allotted lands, help to encourage exploration and development, and make valuation of the resource consistent with current federal oil and gas valuation rules.

Many changes have taken place in the crude oil market since the 1988 rules were codified, Salazar observed. Previous efforts to revise the regulations did not succeed because comments from Indian tribes and producers were so diverse, he said.

A notice from DOI’s Office of Natural Resources Revenue is scheduled to appear in the Jan. 31 Federal Register. It will provide details about DOI’s intent to establish the negotiated rulemaking committee, request nominations for its members, and solicit comments. Nominations and comments will be accepted until Mar. 2, DOI said.

Contact Nick Snow at

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