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Comments to ONRR on Royalty Rates for Oil and Gas Leasing

A new rulemaking by the Office of Natural Resources Revenue (ONRR) delays the effective date of its previously-finalized Valuation Reform and Civil Penalty Rule and seeks input on several questions. We submitted comments focusing primarily on a question about the role of climate impacts in setting royalty policy. Our comments explain that ONRR, by using the social cost of greenhouse gases methodology, should set royalty rates such that fossil fuel producers fully internalize the climate damages caused by their exploration. We also provide brief responses to some other questions. We recommend that ONRR delay, suspend, or repeal the previously-finalized rule, which did not include sufficient analysis or justification.