NATURAL GAS SUPPLY ASSOCIATION

805 15th Street N.W., Suite 510
Washington, D.C. 20005


FOR IMMEDIATE RELEASE
DATE: April 22, 1997

Gas Producers Dismayed by New MMS Valuation Proposal

Washington, DC -- Nicholas Bush, president of the Natural Gas Supply Association, issued the following preliminary statement in response to the notice today that the Minerals Management Service (MMS) had withdrawn its previous proposal on natural gas valuation.*

"Obviously we are disappointed that the MMS was unable to issue a rule based on the outcome of the gas valuation negotiated rulemaking. The producing industry has expended hundreds of thousands of dollars and considerable time--more than two years--in an effort to modify gas valuation so that it is simpler to administer and more equitable to all parties. Such a system remains, I am sure, the goal of producers, states, and the MMS, and we hope that the value of the many insights resulting from the negotiated rulemaking will not be lost.

"We have not had time to review the new proposed options contained in today’s Federal Register notice. We are eager to discuss them with MMS and to provide comments as soon as possible."



* Gas valuation determines the amount of royalties owed by gas producers to the federal government and other parties. In 1995, MMS and producers began a negotiated rulemaking designed to modify the current statutory valuation system, based on the "gross proceeds" from individual leaseholds, with a system responsive to today’s market conditions, under which gas may be moved many miles and undergo various processes before producers receive a contract for its sale. The rulemaking group reached consensus on a system that would continue to base royalties on gross proceeds but would also permit producers to elect an index-based valuation method. The rulemaking was put on hold late last year.

INDEX CONTACTS PRESS STUDIES MAIL
DEMAND TRANSMISSION SUPPLY DISTRIBUTION RENEWABLES

This page was last updated August 31, 1997.