The Supreme Court ruled against the oil and gas industry today in a dispute over how many years into the past the government can reach to collect money for leases on federal land.
In a 7-0 decision, the court refused to limit the number of years the government can reach back to collect unpaid royalties. The ruling applies to administrative proceedings the Interior Department brought against two companies.
At issue is whether a federal law imposing a six-year time limit for the government to file lawsuits based on federal contracts also applies to administrative orders.
Ten years ago, the Interior Department’s Minerals Management Service ordered BP America Production Co. and ARCO to pay $4.1 million and $780,000 respectively to cover royalty deficiencies on coalbed methane. The companies pumped the natural gas from wells in the San Juan Basin, which is in northwest New Mexico and southwest Colorado.