Regulators change oil royalty rules for tribal land

Federal officials published a new regulation Thursday aimed at overhauling the way private companies pay royalties to American Indian tribes for the oil produced on their land.

The new final rule could help Indian tribes get millions of additional dollars for the oil recovered on their land by bringing fairness, clarity and consistency to the process for determining the value of the oil, officials said.

{mosads}The Office of Natural Resources Revenue and the Bureau of Indian Affairs, both agencies of the Interior Department, developed the rule together.

“As part of our trust and treaty responsibilities, these commonsense regulations will help protect and fairly value Indian oil assets, support exploration and development, and reduce administrative costs,” Interior Secretary Sally Jewell said in a statement.

“This rule reflects the president’s strong commitment to tribal sovereignty and self-governance, offering greater simplicity, certainty, clarity and consistency for energy companies that operate on tribal lands, while potentially boosting royalties to Indian Country,” she continued.

The agencies developed the rule in a years-long “negotiated rulemaking” procedure, in which federal officials worked closely with Indian tribes, the oil industry and others.

The rule bases royalty rates either on the actual gross proceeds of the oil or on a unique index-based formula that is based on, among other factors, the highest price of oil in a given region.