Oil Company Fines Get Inflation Boost to Maintain Sting
Published Date: 1/10/2025
Rule
Summary
Starting January 10, 2025, the Office of Natural Resources Revenue is raising the fines for oil and gas royalty violations to keep up with inflation. This means companies that mess up their royalty reports or break rules will face bigger penalties. These changes help make sure penalties stay fair and effective as prices go up over time.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 3 costs, 0 mixed.
Higher Fines for Royalty Violations
If your company reports oil and gas royalties, ONRR raised the maximum civil monetary penalties effective January 10, 2025. The new maximums are: 30 CFR 1241.52(a)(2) $1,562 (was $1,522); 1241.52(b) $15,628 (was $15,232); 1241.60(b)(1) $31,252 (was $30,461); and 1241.60(b)(2) $78,134 (was $76,155). These adjusted amounts apply to penalties assessed after January 10, 2025.
Inflation Multiplier and Rounding Rules
ONRR used the OMB cost-of-living multiplier 1.02598 (October 2024 CPI‑U 315.664 divided by October 2023 CPI‑U 307.671) to calculate the adjustments and rounded increases to the nearest whole dollar. The rule implements those inflation adjustments as required by law.
Agency Says Small Entities Not Significantly Affected
ONRR states that this inflation-only adjustment "will not have a significant economic effect on a substantial number of small entities" under the Regulatory Flexibility Act because it merely implements the statutorily required annual inflation adjustment.
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