Last week, House Committee on Natural Resources Chairman Bruce Westerman (R-Ark.) and House Committee on the Judiciary Jim Jordan (R-Ohio) sent a letter to the Director of the Office of Natural Resources Revenue (ONRR) Howard Cantor requesting information about the office's revenue collection activities. In part, the members wrote:

"There are concerns that ONRR is abusing its collection processes to force U.S. energy companies to pay more to produce energy. For instance, the Government Accountability Office reported how ONRR maintains an arbitrary and predetermined compliance fee collection target that may cause it to demand U.S. energy producers pay more in compliance fees than required by law. In addition, emails obtained by the Committees show that the Office of the Solicitor, the Department’s chief legal advisors, told ONRR that a U.S. energy producer’s royalty payment “deductions appear to be legitimate and comport with the law” and that ONRR did not have “a basis on which to deny the requests.” Nevertheless, ONRR ignored the legal advice and attempted to “deny each of the requests [it] [had] not yet responded to.” By denying refund requests without legal justification, ONRR appears to arbitrarily compel American energy companies to increase their costs beyond what the law requires.

"In addition, when U.S. energy producers challenge ONRR’s decisions, the companies have no due process in the Department’s internal adjudicative tribunal. Currently, a U.S. energy company’s “only recourse” to a denial of a refund request is to appeal to the Interior Board of Land Appeals (IBLA). The IBLA is a panel of administrative law judges with a backlog of more than 650 pending cases dating back to 2017, including more than 200 cases with completed administrative records that are waiting for adjudication. This backlog is concerning in that the IBLA operates under a 33-month statutory deadline, after which the IBLA loses jurisdiction and is forced to dismiss the appeal, affirming ONRR’s decision."

To read the full letter, click here.

Background

Since its formation in 2010, ONRR has been responsible for collecting and disbursing
revenues from energy production on Federal and American Indian lands and offshore on the Outer Continental Shelf. ONRR is one of the federal government’s most significant generators of non-tax revenue, collecting $74 billion in royalties and $600 million through compliance fees from energy and mineral leases on public land between 2012 and 2022. However, rather than simply collecting revenue from the use of public natural resources, evidence suggests that ONRR is abusing its administrative processes to stifle American energy innovation.

Both the House Committee on Natural Resources and the House Committee on the Judiciary are concerned about potential abuses of ONRR's collection process. The committees are conducting investigations into potential abuses and requesting relevant documents and information.