Valuation of Gas Production for Royalty Purposes Disputed

perplexing, to say the least, that devon was seemingly confused royalty policy board action taken to address the issues now devon filed suit in the district court seeking to overturn the reviewtheadministrativeactiondirectly,accordingnoparticular unreasonable, we are obliged to defer to the agency's reasonable in sum, we find no merit in devon's claim that it acted in field or area." 30 c.f.r. � 206.151. if a lessee sells station, the gas enters a large compressor called the "mtg a. statutory and regulatory framework issue binding regulations or make a final determination on the must pay the government-lessor "a royalty at a rate of not less d. prior inconsistent interpretation agency and released with no indication that the documents federal oil and gas royalty management act, the secretary of appellant. summary judgment and granted interior's cross-motion for devon energy corporation, deductible if their primary function is to prepare the gas to move valuation and reporting guidelines, dec. 7, 1995, reprinted in before: brown, circuit judge, and edwards and announce binding rules). the guidance documents at issue here case: 07-5299 document: 01215418734 page: 10 relevant criteria necessarily require significant expertise and contracts typical for the field or area." request for regulations confirmed this requirement. see 30 c.f.r. system to ensure that the government receives the royalties court said: nondeductible marketable condition costs. because the on the natural gas they are able to produce. this case arises "unmarketable" gas at a lower price, the gross proceeds are in its valuation determination, the agency found that interior to change its interpretation of its regulation from previously considered a different aspect of the very same "dear 9 it improperly focuses the inquiry on the market where the gas is relatedtoautomakers'voluntaryregionalrecalls,werefoundnot case: 07-5299 document: 01215418734 page: 5 purpose of judicial review."). requirement). marketable condition is defined in the doi disputed actions had the authority to issue binding regulations or v. faa, 192 f.3d 1030, 1036 (d.c. cir. 1999) (distinguishing regulation is entitled to "substantial deference," unless "plainly when calculating "gross proceeds," doi regulations have authoritativedepartmentalinterpretation"bindingontheagency. devon's request for reconsideration of the doi valuation ambiguous and devon's preferred construction of the rule is not case: 07-5299 document: 01215418734 page: 3 actions, including but not limited to, the issuance of the 1996 management improvement. j.a. 83. although they were not dehydrate it in order to put the gas in marketable condition. and comment rulemaking. [id. at 17.] case without providing an opportunity for notice and comment. certain services" to place the gas in marketable condition. 30 162, 164 [hereinafter, along with the "coalbed methane the rights to extract and sell natural gas from lands owned by the discretion, or otherwise not in accordance with law." 5 u.s.c. devon leases land from the united states in wyoming's to the extent that they actually prescribe anything, the incurred after the gas leaves the cdps to allow it to move and binding interpretations of the marketable condition rule. in or guidelines that bind the agency. but when questioned about c.f.r. � 206.152 (1988). the 1988 regulations establish the the reciprocating compressors and at the buckshot plant is reliance on the 1995 and 1996 guidance documents and that this marketable condition rule precluded devon from deducting id. at 91. impurities and otherwise in a condition that they will be regulations vests the letter's author � in babbitt and this id. at 88. through the pipelines to the point where gas is purchased. dear operator letter." devon reply br. at 14. there are two confirmation from the agency that it was properly deducting the whether the appellant, or others, followed the advice that was marketable condition rule. devon argues that its position finds 6 � 206.153(i) (governing processed gas); see also california co., safety, 452 f.3d 798, a case very much on point, the court held interpretation of its own regulations "is particularly appropriate determination. j.a. 55. devon was also instructed that, in the we have already explained in part ii.b, supra, we find no merit confirm that it was properly deducting (as part of its reasonably construe, the rule. second, we reject devon's claim regulations as "lease products which are sufficiently free from ii. analysis i. background not "plainly erroneous or inconsistent with the regulation." moving [gas] to a point of sale or delivery off the lease . . . or surely does not stand for the proposition that guidance support in guidance documents distributed by agency personnel professional, the court found that thirty years of uniform advice pressure, devon delivers the treated gas into one of two lateral guidance documents were not binding on the agency. [see accepted by a purchaser under a sales contract typical for the documents. this court has held that the very same cross-motion. on appeal, devon argues that doi's order is in this case, by contrast, the guidance documents have never supplement the record after the first valuation determination, reached in the doi valuation determination. devon was agency through the cumulative effect of a number of agency not unreasonable. in other words, we assume that the costs of deliverable to the point of purchase through the pipeline, it is not compressors," which compress the gas to raise its pressure. the determination held that devon's deductions of the costs of issued without notice-and-comment rulemaking required by methane production from the kitty, spotted horse, and rough reinterpreting it." envtl. integrity project v. epa, 425 f.3d 992, deduction of transportation costs, and it does not attempt to to require lessees to compress and dehydrate gas to meet the framework, royalties are calculated on the basis of the total necessary to put the production into marketable condition. promulgate only through notice-and-comment rulemaking. because devon followed the advice contained in the documents. necessary to get it into those [pipe]lines . . . . that is the through the pipelines that serve the market in which the gas is rule requires lessees to put gas into marketable condition at no erroneous or inconsistent with the regulation"). reflects a perfectly reasonable construction of the rule. it is statements in the guidance documents were either ambiguous, internal memoranda written by the deputy director of the condition � as relating to transactions at the leasehold or purchaser unless it meets the requirements of the pipeline, which that doi's order conflicts with a prior interpretation of the case: 07-5299 document: 01215418734 page: 17 alaska professional as concerning a binding interpretation on countless times per year in dealing with the regulated natural gas from federal land. the mineral leasing act, 30 citing independent petroleum ass'n of america v. babbitt, 92 for the district of columbia circuit the marketable condition rule did not require doi to the holding of bennett. however, the parties disagree as to what "sales contract typical "reliance interest is protected by the apa." as noted above, the pressure that would enable the gas to be "accepted by a case: 07-5299 document: 01215418734 page: 20 agency's conclusion that the typical sales contract for the field the sort of "workaday advice letter[s] that agencies prepare but the differences are not material. essentially, each cdp is cost to the united states. at issue here is doi's interpretation j.a. 88, and that devon had "not shown that the dehydration assumes that the guidance documents have the force of law 12 520 u.s. 154, 177-78 (1997). the "dear operator" letter typical for the field or area. veterans of am. v. d.c. arena l.p., 117 f.3d 579, 587 (d.c. put the gas into marketable condition at no cost to the united c. the requirements of a typical sales contract that if gas is not sufficiently compressed and dehydrated to be calculating the "gross proceeds" upon which royalties are owed. reciprocating compressor that further raises the pressure of the the 1988 regulations also provide that the lessee may methane gas production. in its disputed order, doi held that the transportation allowance) dehydration and compression costs language of the rule, nor does it effectively "amend," rather than appellee's br. at 15-16. for the reasons stated below, we agree regulation the outcome might have been different. id. the case sambhav n. sankar, attorney, u.s. department of justice, in what they said. quotation marks omitted). circuit case law cannot obviate specify that the "value of production" should be no less "than from the deputy director to the associate director for royalty gas. after the gas leaves a cdp, it goes through a complex that, in fact, the guidance documents were far from conclusive or otherwise, because it does not purport to, nor is it capable (2006). reduced because the purchaser, or any other person, is providing [the board's] decision gave rise to [the guidance in response to the amoco holding, devon says that it "does for delivery to the pipeline (as necessary for sale under earlier. in other words, there is much force to doi's argument the disposition of this case. we disagree. in alaska consequences. the supreme court's decision in bennett united states court of appeals through its minerals management service ("mms"), otherwise act with the force of law on behalf of the agency. see december 7, 1995, and december 8, 1995, the then-deputy shalala, 512 u.s. 504, 512 (1994) (internal quotation marks the guidance documents upon which devon now relies. it is the field or area," devon had to compress the gas to rule without adhering to the requirements of the apa, we must for the district of columbia (citing auer v. robbins, 519 u.s. 452, 462 (1997)); amoco, 410 � 553 of the apa. at bottom, devon's central claim is that it clear that the agency's order is not at odds with the plain of the rule. consequences." 520 u.s. at 178. (citation and internal authority to bind the agency. therefore, it does not matter the gross proceeds accruing to the lessee for lease production," 14 promulgated pursuant to the notice-and-comment procedures of and comment rulemaking to effect a change in that a. standard of review and instructions when it deducted its post-cdp dehydration interpretation. alaska prof'l, 177 f.3d at 1035; see also hudson � with the authority to announce rules binding on doi. id. decision in alaska professional acknowledges that an fall within the compass of "transportation costs." however, we ambiguous, and devon's preferred interpretation of the rule is both before and after the 1988 regulations, the lessee's typically requires compression to raise its pressure and we affirm the judgment of the district court. first, we find in the documents. this argument fails. in center for auto interior ("doi" or "interior") requiring devon retroactively to director of mms issued two documents captioned "coalbed 995 (d.c. cir. 2006) (quoting molycorp, inc. v. epa, 197 f.3d there is no merit to these contentions. condition rule] at 30 c.f.r. � 206.151. in other words, to production into marketable condition and what is necessary "inconsistent" with the rule, j.a. 85. the doi valuation 2 management as the points of measure for the royalty due on the compressors, the reciprocating compressors, and the buckshot binding "legal consequences." in addressing this point, the policy board was called upon to interpret the regulations. amoco's argument because the letter was not binding on the a market remote from the lease. 30 c.f.r. � 206.157(a)-(b). contracts require that gas be delivered to the purchaser at the in the context of a complex and highly technical regulatory plant, losing approximately one-third of its pressure on the way. either determine "rights or obligations" or result in discernible 3 federal leases" that were the subject of the doi valuation amend the marketable condition rule or to issue authoritative guidelines, and that the guideline documents did not have the to a binding interpretation of the marketable condition rule, so because the compression and dehydration functions were any and all things necessary to carry out and accomplish the motion for summary judgment and granted the secretary's contracts that are typical for the disposition of gas produced the cdp were deductible as transportation costs. requirements of any of its sales contracts without compressing that were not clearly adopted by the department of justice and contracts without compressing the gas to the pressure instructed to "perform a restructured accounting and pay paralyzed veterans of america, 117 f.3d 579, should control doi determined that gas cannot enter a pipeline and move to a and related topics, 53 fed. reg. 1230, 1272 (jan. 15, 1988); 30 the agency alone would not amount to an authoritative in this claim. although the marketable condition rule is dehydration and compression costs (as part of its transportation from the field or area). . . . "guidance documents"]. these documents were memoranda distributed by agency individuals who had no authority either to second, implicit in devon's prior-inconsistent- 2005), aff'd sub nom., bp am. prod. co. v. burton, 549 u.s. 84 actually sold, as opposed to the requirements of a sales contract as in babbitt, the payor letter here is not an agency psi. the gas travels the remaining 96 miles to the buckshot gas b. facts and proceedings below recalculate royalties owed to the government pursuant to its f.3d at 732 (noting "dear operator" letter not binding on however, although doi provided devon an opportunity to third, and most important, devon is mistaken in its rulemaking that modified the then-existing gas royalty valuation dirk kempthorne, secretary of the interior, . . . . community," indep. equip. dealers ass'n v. epa, 372 f.3d case: 07-5299 document: 01215418734 page: 4 interpretation or advice by an official without authority to bind directive, doi has issued a number of regulations governing the 512 (holding that an agency's interpretation of its own u.s.c. �� 181 et seq. (2000), "was intended to promote wise "in a case like the instant one, in which the district court [n]otice and comment rulemaking was . . . not required for owed. 30 u.s.c. � 1711(a) (1982). an agency's interpretation of its own regulation is entitled series of compression and dehydration processes as it travels gas. the gas then enters a dehydrator, which removes water. devon could not meet the requirements of any of its sales include costs of dehydration occurring after metering at the is defined as "an allowance for the reasonable, actual costs of ctr. for auto safety, 452 f.3d at 811. see also nat'l ass'n of construction of the rule. thomas jefferson univ., 512 u.s. at guidelines on behalf of the agency. devon concedes, these contested guidance documents were in amoco, we addressed doi's interpretation of the accepted by a purchaser under a sales contract typical for the as if to suggest that the board had authority to adopt regulations 1961). under the mineral leasing act, the producer-lessees subsequently, on april 22, 1996, mms's associate government. in exchange, lessees, like appellant devon energy v. from 1995 to 2002, devon deducted the following costs as 16 case: 07-5299 document: 01215418734 page: 19 large number of individual gas-producing wells. the gas comment rulemaking. [id.] put the production into marketable condition . . . to meet interpretation unreasonable. program, in which the identification and classification of away from a processing plant." 30 c.f.r. � 206.151. appellee a supportable interpretation of the marketable condition rule. as number of years, regulated parties followed the advicecontained development of these natural resources and to obtain for the dioxide removal or other treating facility . . . [y]ou can allow the gas to be delivered through the pipeline. therefore, 11, 2002, however, devon sought guidance from mms to interpretation of its regulationimplementingtheamericanswith compressed from approximately 800 psi to 1,100 psi. at that f.3d 1248, 1256-57 (d.c. cir. 1996), the court rejected consider, inter alia, whether the agency officials involved in the opinion for the court filed by senior circuit judge a group called the royalty policy board met to discuss how the dehydration and of compression performed at the screw booster," which compresses the gas to raise the pressure from which are directly related to the transportation of lease wellhead. you can include costs for compression occurring this cursory assertion is not sufficient to render doi's than 12.5 percent in amount or value of the production removed summary judgment. devon energy corp. v. norton, no 04-civ- 420, 427 (d.c. cir. 2004) (internal quotation marks meet the requirements of the "sales contract[s] typical for comprehensive inspection, collection, accounting, and auditing impurities and otherwise in a condition that they will be allowance) incurred after the gas leaves the cdps. this request determination was denied in march 2004. final order to 296 f.2d at 387-88 (affirming marketable condition demonstrate that the guidelines have had legal j.a. 157; compression guidance, dec. 8, 1995, reprinted inj.a. case: 07-5299 document: 01215418734 page: 14 devon apparently assumed that these expenses were deductible marketable condition rule, j.a. 84, or were simply do not satisfy this standard. documents] which were consistently followed by interior agency: purported to have the force of law may be taken as binding documents purported to have the force of law. long interpreted the mineral leasing act to require lessees to 18 devon followed interior's publicly-announced guidelines case: 07-5299 document: 01215418734 page: 8 for royalty management and the associate director for policy a 24-inch high-pressure gas pipeline, which begins at what is rule, and also inconsistent with doi's own prior interpretation amoco, 410 f.3d at 732. field or area." 30 c.f.r. � 206.151. the marketable condition the agency is bound by the guidance documents because, for a f.3d at 732. to which they allude are practical, not legal. it may be that, ("cdps") that have been approved by the bureau of land whenever they are referenced in an agency decision. edwards. how it had been applied as a result of ambiguous guidance production." 53 fed. reg. at 1261. a transportation allowance appellant interpretations of the marketable condition rule. second, it interpretation argument is a claim that the judgments reached in gas then travels through the pipeline to a "field booster," a royaltymeasurementpointinyour transportation allowance reviewed an agency action under the apa [5 u.s.c. � 706], we incurred after the gas leaves the cdps. request for valuation interior was not bound by its 1995 guidelines and entail the exercise of judgment grounded in policy concerns." downstream of the royalty measurement point, to the extent erik milito and michele schoeppe were on the brief for � to the regulated community can evidence the agency's for it to meet pipeline and purchaser requirements. amicus curiae american petroleum institute in support of minerals management service in 1995 to the associate director binding because the associate administrator had no authority to no. 07-5299 traffic safety admin., 452 f.3d 798, 810 (d.c. cir. 2006) over the propriety of its royalty accounting if, in its view, the minutes, nov. 2, 1995, reprinted in j.a. 102. subsequently, on performed . . . [was] for anything other than what is required to "increased to the extent that the gross proceeds have been generally harry t. edwards & linda a. elliott, federal iii. conclusion revisionofgas royalty valuation regulations, which establish (no. 04cv00821) this at oral argument, devon's counsel readily conceded that the 4 silberman, senior circuit judges. not embodied in a rule that was adopted through a notice immediately nearby." id. at 729. "the regulation stipulating agency "is not the sort of `fair and considered judgment' that royalty policy board had no authority to issue authoritative devon argues that these 1995 documents were conclusive 1045 (d.c. cir. 1993). we will uphold the contested agency of, binding the agency." id. at 1257. includes compression at the cdp and in the transportation attorney, entered an appearance. edwards, senior circuit judge: the united states leases to challenge interior's order. the district court denied devon's standards of review � review of district court that producers are to place gas in marketable condition at no cost from 1995 until 2003. [id.] this "transportation allowance" includes "only those costs rejecting devon's argument, we start with the principle that 410 f.3d at 729 (citations and quotations omitted). lease to extract coalbed methane from federal land in wyoming. "compression guidance," respectively. see coalbed methane pipeline pressure. to the government does not contain a geographic limit." id. plant were inconsistent with the marketable condition rule, agency because not authored by official with authority to purposes of" the act. 30 u.s.c. � 189. pursuant to this inconsistent with the plain language of the regulations, because partner, redstone resources, inc., sells gas to unrelated third typically sold. devon argues that this interpretation is 17 the practical effect of the agency action is not a certain change interest is protected by the apa." appellant's br. at 16. a speech by a mid-level official did not amount to a binding argued september 15, 2008 decided december 23, 2008 been upheld in an agency adjudication, nor have they ever been troy corp. v. browner, 120 f.3d 277, 281 (d.c. cir. 1997); gas condition rule is consistent with an interpretation that this court 11 10 id. at 66. these pipelines. id. or sold from the lease." 30 u.s.c. � 226(b)(1)(a). in the determines "rights or obligations" or occasions "legal but you cannot deduct costs of dehydration occurring at the certain costs of compression and dehydration after the gas leaves or area required devon to compress its gas to 1,100 psi and doi's description of the situation is quite different. also amoco prod. co. v. watson, 410 f.3d 722, 725 (d.c. cir. screw compressors, the field boosters, the mtg booster, and the [id.] case: 07-5299 document: 01215418734 page: 16 interpretation. agency's guidelines have been voluntarily followed by agency actions do not have the force of law unless they "mark defined to mean "lease products which are sufficiently free from instructions because they were not embodied in a formal argument that, merely because the agency and automakers had excess carbon dioxide to the treatment plant. the court held that the interior was instructed by congress to create a comment requirements [of � 553 of the apa, 5 u.s.c. cir. 1997) (stating that a speech of a mid-level official of an 9, 2003, the acting assistant secretary issued a decision the consummation of the agency's decisionmaking process" and of the rule to include the costs of compression and dehydration the framework for calculating the royalty value of coalbed therefore, doi's interpretation of the marketable condition rule and compression costs. [id.] definitive interpretation, the apa does not require notice omitted), do not retroactively become agency rules an interpretation can be changed only through a notice and nothing in the record here to indicate that the guidance at the very least, a definitive and binding statement on � 553(b)(a),] by amending a rule under the guise of in marketable condition. devon filed suit in the district court that costs associated with compression and dehydration are not framework for calculating the royalty value of the coalbed methane production. see royalty policy board meeting 8 for confirmation was made in 2002, long after the issuance of � 706(2)(a). the case is plainly distinguishable, however, because the known as the landeck station and runs 126 miles to the paralyzed veterans also lends no support to devon's marketable condition rule (embodied in the doi valuation for eventual sale. see valuation determination for coalbed parties in the field at pressures less than 1200 psi [sic] under deduct its actual costs of transporting the gas from the wellhead action unless we find it to be "arbitrary, capricious, an abuse of management and the associate director for policy and documents written by persons without authority to bind an department itself had adopted the board's interpretation of the omitted). however, an agency may not "evade [the] notice and first, it is telling that the agency's disputed valuation case: 07-5299 document: 01215418734 page: 7 it is true that the doi marketable condition rule is additional royalties on the coalbed methane produced from the in the legal obligations of a party, the action is non-final for the if you sell your coalbed methane at the tailgate of a carbon issue. importantly, the court also rejected the petitioner's the compression is necessary for transportation. this noted in amoco, the deference that we owe to an agency's states � the so-called "marketable condition rule." the 1988 assistant secretary's decision that cited the april 22, 1996 buckshot gas plant, as well as the cost of dehydrating the gas. problems with this argument. first, it assumes that the two � 206.152(i) (governing unprocessed gas); 30 c.f.r. condition rule." the rule was included as a part of doi's 1988 for the field or area" requires. doi found that "typical" sales must provide the compression and dehydration necessary to is reasonable. indeed, doi's interpretation of the marketable final order. the district court denied devon's motion for (holding that associate administrator for safety assurance had behalf of the agency must come from a source with the authority prescribe necessary and proper rules and regulations and to do no authority to issue guidelines with binding effect on agency); fourth, resting on its "reliance" theory, devon suggests that valuation and reporting guidelines" and the "compression that policy guidelines issued by the associate administrator of argument that the guidance documents constituted authoritative interpretation of its own regulations." thomas jefferson univ., royalty valuation process. in 1988, doi conducted a major devon merely asserted that it "believes that its working interest interpretation it relied on was authoritatively adopted by the at 1256. "the letter is not an agency rule at all, legislative because they reflected the actions of the royalty policy board, cdp through the pipeline to one of several "screw judgment in favor of the agency. offered in these documents. these documents did not amount endorsed in any other agency action having the force of law. regulation. this court has long recognized that an agency connected to a small diameter pipeline. gas travels from the 450-500 pounds per square inch ("psi") to approximately 1,200 perform restructured accounting and pay additional royalties before the court. rather, doi contends that 7 doi's valuation determination and final order do not reflect interpretations of an agency regulation. disputed agency advice in that case had been upheld in a formal after doi's promulgation of the 1988 regulations. however, as interpretation can be authoritatively adopted even if it was can be thought of as an authoritative departmental position") the agency was free to adopt the interpretation at issue in this c.f.r. � 206.152(i); amoco, 410 f.3d at 725-26. royalty calculation regulations should be applied to coalbed marketable condition rule as it related to the cost of transporting letter, arguing that it constituted a new rule that the agency could when the gas arrives at the buckshot gas plant, excess dehydration and compression can reasonably be interpreted to transportation allowances: the cost of compressing the gas at the obligation is to dehydrate gas to the water content required case: 07-5299 document: 01215418734 page: 13 pipelines. the gas is transported to various purchasers through acted in reliance on the guidance documents and this "reliance deference to the judgment of the district court." holland v. challenge to doi's final order and affirm the district court's case mms's associate director for royalty management by the alaskan regional office of the faa "became an determining whether an agency action effectively "amends" a approved in amoco, 410 f.3d 722. coalbed methane. these leases cover three fields � kitty, buckshot gas plant. approximately 30 miles from the landeck guidance," supra, "guidance documents"]. certainly does not satisfy this standard. indeed, this court has 20 hunters ass'n v. faa, 177 f.3d 1030 (d.c. cir. 1999), and inconsistent with the plain language of the marketable condition an agency's consistent advice � and here it was instruction in its valuation determination and final order, doi held case: 07-5299 document: 01215418734 page: 9 thomas jefferson univ., 512 u.s. at 512. and as the court under the 1988 doi regulations, "marketable condition" is case: 07-5299 document: 01215418734 page: 6 512 u.s. at 512 (citations omitted). on this record, we find that powder river basin, which contains the natural gas known as appeal from the united states district court agency. see alaska prof'l, 177 f.3d at 1034 (discussing nat'l mining ass'n, 309 f.3d 808, 814 (d.c. cir. 2002); see also amoco, 410 f.3d at 732.] if they were not binding, then with doi. dehydration to reduce its water content. thus, doi concluded requirements of the pipelines that serve its typical purchasers is draw fields, reprinted in joint appendix ("j.a.") 57 and management improvement were final and binding agency according to the agency, there was no official or binding 15 devon's argument runs as follows: the basis of the formal adjudication upon which the longstanding rejecting devon's reliance on the guidance documents. see ("valuation determination"); see also chart, j.a. 460. the production process varies slightly in the three fields, followed the guidelines for seven years, the guidelines had reconsideration and/or clarification,reprinted in j.a. 194, 196. argued the cause for appellee. with him on the brief was matters at issue had been authoritatively resolved over five years interior's decision in this case wrongly assumes that the marketable condition rule does not prohibit the guidance documents were far from conclusive in what they said. amount to a binding rule. the contested guidelines, which michael t. gray, attorney. r. craig lawrence, assistant u.s. for the reasons indicated above, we deny devon's case: 07-5299 document: 01215418734 page: 1 160 [hereinafter, along with the "dear operator" letter, infra, the flaw in appellants' argument is that the "consequences" for how to conduct regional recalls. but this does not case: 07-5299 document: 01215418734 page: 12 methane gas production at issue here. under this regulatory regulations. see revisionofgasroyaltyvaluation regulations devon has not shown that the dehydration performed after interior issues and administers leases authorizing the removal of b. plain language case: 07-5299 document: 01215418734 page: 2 statement with future effect because nothing under doi j.a. 84-85, or reflected an incorrect application of the 5 to "substantial deference," unless "plainly erroneous or purchaser under a sales contract typical for the field or ("final order"), mar. 19, 2004, reprinted in j.a. 46. the doi the national highway traffic safety administration did not that interior's interpretation of the marketable condition rule devon argues that our decisions in alaska professional produced from the wells is gathered at central delivery points and guidelines discussed" in the doi final order. id. practice was based); ass'n of am. r.rs., 198 f.3d at 949 (same). valuation determination, j.a. 61. at this point, the gas enters on november 2, 1995, doi and mms personnel serving on devon argues that there is no record support for the differentiate between deductible transportation costs and (2000), the guidance documents nonetheless suggested that at issue is the agency's interpretation of its "marketable finally, devon argues that the agency's interpretation of the "legal consequences" for regulated parties. bennett v. spear, transportation costs under the guidance documents. on january case: 07-5299 document: 01215418734 page: 11 value a lessee receives for its production. the regulations followed. "downstream" to the buckshot processing plant in preparation corporation ("devon"), agree to pay the united states royalties are obliged to afford "substantial deference to an agency's system to the [carbon dioxide] removal facility. spotted horse, and rough draw � each of which contains a the mineral leasing act gives doi the authority "to was a binding rule. rather, devon contends that the regulatory mms dear operator letter, apr. 22, 1996, reprinted in j.a. case: 07-5299 document: 01215418734 page: 18 and interior can change its interpretation without going decisions and agency actions 130-35 (2007). director for royalty managementdistributed a "dear operator" not amount to an authoritative agency interpretation); paralyzed through notice and comment rulemaking. . . . absent a adjudicationbythecivilaeronauticsboard,faa'spredecessor doi's contested construction of the marketable condition rule automakers and have become a de facto industry standard position. in that case, we held that advisory board guidelines carbon dioxide is removed, the gas is dehydrated, and the gas is the gas to the pressure necessary to get it into" the pipelines, makes it quite clear that agency action is only final if it "understand typical sales contracts � and thus marketable deborah b. haglund argued the cause for appellant. with 543, 546 (d.c. cir. 1999)); see also am. hosp. ass'n v. bowen, regulations do not expressly address the issue, the royalty certain costs associated with compression and dehydration when determination and final order) must be vacated because it was (holding a letter and two emails from lower level officials did determination, jan. 11, 2003, reprinted in j.a. 166. on october public a reasonable financial return on assets that `belong' to the in any event, on the record here, it is plain that the contested ass'n of am. r.rs. v. dot, 198 f.3d 944, 948 (d.c. cir. 1999) guidance documents did not come from sources who had the 0821, 2007 wl 2422005 (d.d.c. aug. 23, 2007). this appeal inconsistent with the regulation." thomas jefferson univ. v. to bind the agency. see ctr. for auto safety v. nat'l highway minuscertainallowabledeductions. 30c.f.r.�206.152(h);see public." california co. v. udall, 296 f.2d 384, 388 (d.c. cir. disabilities act. 117 f.3d at 588. the court noted that if the 13 not contend that the 1996 dear operator letter in and of itself in amoco, coalbed methane producers challenged an determination and final order came only after devon sought letter detailing how to calculate royalties on coalbed methane operator" letter that is at issue in this case. see amoco, 410 future, it was to "report and pay royalties under the regulations the administrative procedure act ("apa"), 5 u.s.c. � 553 area," in the words of the definition [of the marketable to the point of sale when gas produced from the lease is sold at authoritative adoption of a regulatory interpretation. such pipeline and purchaser requirements." j.a. 91. appliance mfrs. ass'n, inc. v. dep't of energy, 998 f.2d 1041, home builders v. norton, 415 f.3d 8, 15 (d.c. cir. 2005) ("[i]f administrator v. marshall, 39 c.a.b. 948 (1963)). indeed, the force of law. this concession is unsurprising, because there is case: 07-5299 document: 01215418734 page: 15 they are not evidence of a definitive agency interpretation terminus of a specified pipeline. under this view, a producer her on the briefs was charles d. tetrault. 834 f.2d 1037, 1044-48, 1052-57 (d.c. cir. 1987). in production. the letter stated: final order largely reaffirmed the reasoning and conclusions for anything other than what is required to put the 19 methane valuation and reporting guidelines" and valuation determination, j.a. 57. from a final order issued by the united states department of the the agency reasonably found that devon "could not meet the