On September 16, 2015, the Office of Natural Resource Revenue (ONRR) sent out an email that the Yscloskey Gas Plant (Targa, Louisiana) operators must amend their reporting as to the allowable portion of contractual processing fees for the years 2008 – 2012. See Onrr.gov/unbundling. Note that the Yscloskey plant ceased operations in 2012.
Operators who have already filed reports and paid royalties to the federal government based on those reports must go back to change their calculations for gas that came through that plant seven years ago. You must change the four years of reports that have been filed monthly in order to comply with this change. Note that operators must change those numbers even if they have been audited and cleared already. In addition, the ONRR includes the following statement at the end of their email, “This message serves as guidance for determining value for royalties and is not an appealable decision or order under 30 CFR Part 1290, Subpart B. If ONRR issues you an order to pay additional royalties or assesses civil penalties under 30 CFR Part 1241 at a later date based on this guidance, your appeal rights will be provided at that time. While this message is not appealable, ONRR may use this guidance in conducting audits and as a basis for demanding additional royalties.”
From a due process perspective how can the federal government change the rules on something that happened seven years ago, send out an email notice and then claim that;
1) industry had notice of this change, and;
2) must suffer the additional costs of changing hundreds of reports, and
3) that addition liability can now be imposed if those reports are not changed even if there had been an intervening audit.
IPANM has contacted and had meetings with several members of the New Mexico Congressional delegation and the Colorado delegation who are in the natural gas development areas, but there has been little interest in reducing the regulatory burdens on industry on this issue. Maybe now that operators in Louisiana are involved, the national trades and other state legislators may be interested…
