ONRR proposes new royalty valuation rules affecting Alaska federal leases

A federal proposal to reshape royalty payments on oil, gas, and coal leases on public lands could carry fiscal consequences for Alaska and for tribes and individual Indian mineral owners with federal mineral interests, if the rule is adopted.

The Office of Natural Resources Revenue, a bureau within the U.S. Department of the Interior, published the proposed rule to amend its federal oil, gas, and coal valuation regulations. The proposal would also specify the standard of review for Director-level appeals, a procedural change that governs how royalty disputes are resolved within the agency. ONRR says the changes would simplify compliance requirements and reduce costs for both industry and the federal government. The agency stated the changes would "incentivize production to unleash energy dominance."

Royalty revenues collected by ONRR flow through federal revenue-sharing formulas to states and to tribes and individual Indian mineral owners. One hundred percent of revenues from mineral leases on Indian lands transfers to designated beneficiaries, meaning any shift in how royalties are valued lands directly on those payments. For fiscal year 2026 through May, ONRR reported $11 billion in revenue collected and $10.2 billion in disbursements.

Oversight advocates have raised concerns about the direction of the rulemaking. A January 2026 Office of Inspector General audit found that ONRR did not appropriately identify, assess, issue, and collect penalties related to mineral revenue noncompliance. Watchdog groups have argued that simplifying valuation rules without fixing enforcement could weaken collection of full royalties owed to the public and reduce revenue flows to states, tribes, and conservation funds.

How to Comment

Comments are due August 31 at 11:59 p.m. EDT at regulations.gov under Docket ID ONRR-2025-0001, or by email to [email protected] with RIN 1012-AA39 in the subject line.