The Bureau of Land Management’s Final Rule Streamlines Royalty Rate Reduction Process for Non-Energy Solid Minerals Mined on Public Lands
GRAND JUNCTION – As part of the Trump Administration’s commitment to streamlining regulations and promoting American economic prosperity, the Bureau of Land Management (BLM) today finalized changes to its non-energy solid minerals leasing regulations. These reforms will remove unnecessary and burdensome requirements while providing much needed regulatory relief and efficiencies for producers of many essential commodity minerals on public lands. These changes are expected to save up to $5 million in regulatory costs over the next decade, helping to keep American mining and manufacturing competitive in the global economy.
Minerals covered by the BLM’s new rule, effective 30 days after publication in the Federal Register, include soda ash, potash, phosphate, sodium, potassium, sulphur and gilsonite.
“The Trump Administration has had enough of foreign powers taking aim at our nation’s domestic mineral producers. Foreign competitors have been trying to corner the minerals markets for decades. One need only compare the USGS Mineral Commodity Summaries from the 1990s to today for evidence – since 1995, U.S. phosphate production has decreased from 45.5 million tons to 23 million, while China’s skyrocketed from 27 million tons to 110 million,” said Interior Deputy Secretary Kate MacGregor. “The drafters of the Mineral Leasing Act clearly envisioned the need to adjust royalty rates to ensure the greatest ultimate recovery of the resource. This rule restores our regulations to this statutory mandate so that we may be more responsive to these changing global market dynamics.”
“Minerals like soda ash, phosphate and sulphur may sound obscure to most people, but they’re an essential component of thousands of products we use every day, and critical to U.S. manufacturing capacity,” said Casey Hammond, Principal Deputy Assistant Secretary of the Interior for Land and Minerals Management. “This common-sense rule will help keep manufacturers competitive and protect the jobs of thousands of Americans nationwide, while also keeping consumer costs lower.”
Mineral development is an important land use within the BLM's multiple-use mandate, providing economic opportunities and major commodities that are essential to maintaining a high quality of life. In fiscal year 2018, the development of non-energy solid minerals on BLM-managed public lands contributed $12.7 billion to the national economy and supported 46,000 jobs.
Among those major commodities is soda ash, which is used in construction and the automobile industry. The U.S. was once the world’s leading producer of soda ash, but Chinese production surpassed domestic production in 2003. With red-tape-cutting updates contained in the final rule, the BLM can now better support development and production of the federal mineral estate. Non-energy solid minerals are used to produce scores of everyday products that people use, such as toothpaste and garden fertilizers.
“Finalization of the rule is long overdue. Recently, many Wyoming soda ash producers have stalled expansion projects due to the COVID-19 pandemic and the global economic slowdown, but that was compounded by the unfair competition from foreign sources of soda ash,” said Wyoming Governor Mark Gordon. “The implementation of this rule will assist our industries to not only survive the current market downturn, but allow them to gear up and implement long-term plans for expanding Wyoming production and adding more jobs.”
“This long-awaited rule brings us one step closer to giving American soda ash producers the certainty they need to stay competitive in the global market,” said U.S. Sen. John Barrasso (WY-R). “For too long, American producers have had to battle unfair trade practices of China and other countries. Today’s rule sets the stage for Secretary Bernhardt to finally lower the royalty rate on soda ash. This will level the playing field against China and preserve these high-paying jobs in Wyoming.”
“Soda ash is Wyoming’s top export and a crucial part of our economy,” said U.S. Sen. Mike Enzi (WY-R). “This rule to streamline regulations and remove unnecessary requirements is good news for our state and our country. It would help our producers remain competitive while making our country less reliant on countries like China for these essential minerals.”
The final rule makes two key changes that could affect the royalties and rental fees paid by producers of solid leasable minerals other than coal and oil shale on Federal lands. First, it streamlines the process by which producers of these minerals could apply for a reduction in their royalty rate, rental fee, or minimum production requirements by lessening the information requirements for operators who apply. This allows the BLM to approve a reduction in the rental fee, royalty, or minimum production requirements on a lease-by-lease basis in response to an application from a producer, if the agency finds that a lease cannot be successfully operated under current market conditions.
“Today’s action by the U.S. Bureau of Land Management is welcomed news and comes after several years of work by my congressional colleagues and I to streamline the process of setting solid, non-energy mineral royalty rates – including soda ash – to be more responsive to economic conditions that will promote responsible resource development on federal lands,” said House Republican Leader Kevin McCarthy (CA-R). “It will also enable the Bureau to swiftly make decisions to modify U.S. royalty rates to ensure domestic mineral producers are not at a disadvantage with their international competitors, which are often state-subsidized. I commend the Trump Administration and Secretary Bernhardt for taking this action. I’m confident that this action will not only help mineral producers across the country compete on even footing with foreign mineral producers, but will create jobs in the communities in which they are located.”
“The Trump Administration has taken important action to reduce soda ash royalty rates in order to level the playing field for Wyoming and other U.S. trona producers,” said U.S. Rep. Liz Cheney (WY-R). “Wyoming has the largest deposit of trona in the world, and this rule will allow Wyoming producers to expand their operations and create much needed jobs in our state.”
“For over a decade, foreign, synthetic soda ash producers in China and Turkey have rigged international markets against U.S. soda ash producers. On top of that, the previous administration tripled the federal royalty rate for American-produced soda ash, putting U.S.-made soda ash at an even greater competitive disadvantage and placing thousands of American jobs at risk,” said U.S. Rep. Paul Cook (CA-R) “Sodium carbonate production is a $1.8 billion industry which supports hundreds of jobs in the San Bernardino County high desert and thousands more across the nation. This important rule change will protect and expand American mining jobs, strengthen our national security, and help the economy in my district. I thank the Administration and the BLM for taking action to support this critical industry.”
“China has targeted U.S. domestic manufacturing for far too long. This important reform helps domestic producers and manufacturers be competitive and keep jobs here at home when we need them most,” said U.S. Rep. Mike Garcia (CA-R).
In addition, the final rule enables the BLM to reduce the rental fee, royalty rate, or minimum production requirements on its own initiative if the agency finds that a reduction is necessary to develop a type of solid minerals on an area, or on an industry-wide basis.
The final rule, which underwent public comment in compliance with the National Environmental Policy Act, is informed by Secretary's Order 3354, which calls for improvements in the exploration and development of Federal solid mineral resources.
By reducing informational requirements, the BLM estimates the proposed modifications would have a beneficial impact of up to a half-million dollars per year over the next decade on industry and government staff time in the form of reduced paperwork burdens.
The BLM manages more than 245 million acres of public land located primarily in 12 western states, including Alaska, on behalf of the American people. The BLM also administers 700 million acres of sub-surface mineral estate throughout the nation. Our mission is to sustain the health, diversity, and productivity of America’s public lands for the use and enjoyment of present and future generations.