Court Opinion

ID: 9907632
Source: CourtListenerOpinion
Date Created: 2023-12-06 19:01:24.805453+00
Date Added: 2024-06-11T10:02:36.911772
License: Public Domain

Appellate Case: 22-8024    Document: 010110963862   Date Filed: 12/06/2023   Page: 1
                                                                            FILED
                                                                United States Court of Appeals
                                     PUBLISH                            Tenth Circuit

                   UNITED STATES COURT OF APPEALS                     December 6, 2023

                                                                    Christopher M. Wolpert
                             FOR THE TENTH CIRCUIT                      Clerk of Court
                          _________________________________

  BP AMERICA PRODUCTION
  COMPANY,

         Plaintiff-Appellant,

  vs.                                                   No. 22-8024

  DEBRA ANNE HAALAND, in her
  official capacity as United States
  Department of Interior Secretary;
  KIMBRA DAVIS, in her official
  capacity as Office of Natural
  Resources Revenue Director,

         Defendants-Appellees.
                     _________________________________

                  Appeal from the United States District Court
                          for the District of Wyoming
                        (D.C. No. 2:21-CV-00105-NDF)
                      _________________________________

 Sarah Y. Dicharry of Jones Walker, LLP, New Orleans, Louisiana (Jonathan A.
 Hunter of Jones Walker, LLP; and Hadassah M. Reimer of Holland & Hart
 LLP, Jackson, Wyoming, with her on the brief), for Plaintiff-Appellant.

 Justin D. Heminger (Todd Kim with him on the brief), of United States
 Department of Justice, Environment and Natural Resources Division, for
 Defendants-Appellees.
                      _________________________________

 Before PHILLIPS, BALDOCK, and McHUGH, Circuit Judges.
                   _________________________________

 PHILLIPS, Circuit Judge.
                    _________________________________
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023   Page: 2

       BP America Production Company asks us to adopt its interpretation of

 the Federal Oil and Gas Royalty Simplification and Fairness Act, which would

 shield it from paying the government nearly $700,000 in correctly assessed

 royalty underpayments. In doing so, BP has abandoned the sole argument it

 presented to the agency—that the agency had erred about the effective date of

 BP’s lease transfers. Instead, BP now argues that the royalty-payment statute

 compels reversal of all individual royalty underpayments less than $10,000,

 despite those underpayments being correctly calculated and assessed. We reject

 BP’s statutory interpretation and affirm the district court’s order upholding the

 agency order requiring BP to pay.

                                 BACKGROUND

 I.    Legislative Background

       In response to the “archaic and inadequate” accounting of lease royalties

 by the Department of the Interior, 30 U.S.C. § 1701(a)(2), Congress passed the

 Federal Oil and Gas Royalty Management Act of 1982, codified at 30 U.S.C.

 §§ 1701–1759. The Royalty Management Act tasked the Secretary of the

 Interior with creating an internal system for managing royalties on federal oil

 and gas leases. Id. § 1701(b)(2). Congress mandated that the Secretary

 “establish a comprehensive inspection, collection and fiscal and production

 accounting and auditing system to provide the capability to accurately

 determine oil and gas royalties.” Id. § 1711(a). Congress also permitted the

 Secretary to delegate responsibility to “conduct inspections, audits, and

                                         2
Appellate Case: 22-8024    Document: 010110963862     Date Filed: 12/06/2023     Page: 3

 investigations . . . to any State with respect to all Federal land within the

 State.” Id. § 1735(a); see id. § 1732(a).

       The newly established Minerals Management Service (MMS) assumed

 responsibility for the collection, distribution, and auditing of royalties on

 federal leases. S. Rep. No. 104-260, at 13 (1996). But MMS proved more

 malady than cure; it often took up to twelve years to complete audits of

 production royalties. Id. at 14.

       In 1996, still faced with a revenue-collection system clogged by lengthy

 audits and appeals, Congress amended the Royalty Management Act as part of

 its enactment of the Federal Oil and Gas Royalty Simplification and Fairness

 Act of 1996 (RSFA), Pub. L. No. 104-185, 110 Stat. 1700. Among other things,

 the RSFA streamlined the audit and appeals processes for royalty disputes.

 S. Rep. No. 104-260, at 14. For instance, Congress imposed a seven-year

 statute of limitations on all royalty disputes, barring judicial proceedings or

 demands outside the limitations period. 30 U.S.C. § 1724(b)(1). And further,

 Congress limited the Secretary (or the Secretary’s designee) to 33 months in

 which to issue final decisions on any appealed royalty dispute after an appeal’s

 commencement, id. § 1724(h)(1); otherwise, she would be “deemed” to have

 approved a final decision either affirming the agency for a monetary obligation

 of more than $10,000 or reversing it for a monetary obligation of $10,000 or

 less, id. § 1724(h)(2).

                                             3
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023   Page: 4

       In 2010, the Department restructured the MMS into three separate

 offices, including the Office of Natural Resources Revenue (ONRR).

 Reorganization of Title 30, Code of Federal Regulations, 75 Fed. Reg. 61,051,

 61,052 (Oct. 4, 2010). Taking the MMS’s place, the ONRR’s duties included

 determining, collecting, and auditing royalties for federal oil and gas

 leases. 30 C.F.R. § 1201.100. The ONRR also became the first level of appeal

 for royalty payors disputing adverse decisions from a State order. See id.

 § 1290.105.

       If dissatisfied with the ONRR Director’s decision, royalty payors may

 appeal to the Department of the Interior’s Board of Land Appeals (IBLA).

 Id. § 1290.108; 43 C.F.R. § 4.1(b)(2). The Secretary has delegated to the IBLA

 the authority to make final decisions on various matters, including “[t]he use

 and disposition of public lands and their resources.” 43 C.F.R. § 4.1(b)(2)(i).

 The IBLA’s Chief Administrative Judge is authorized to delegate an appeal to a

 panel of two or more administrative judges and to communicate final decisions

 on the IBLA’s and the Secretary’s behalf. 1 Id. § 4.2(a), (c).

 II.   Factual Background

       Between 2008 and 2012, BP held more than twenty federal leases in the

 Jonah Field, one of the largest natural-gas deposits in the United States.

       1
         Because the IBLA acts on the Secretary’s behalf, we refer to the IBLA
 and the Secretary interchangeably in our discussion.

                                          4
Appellate Case: 22-8024   Document: 010110963862    Date Filed: 12/06/2023   Page: 5

 Located on federal land in the Upper Green River Basin of west central

 Wyoming, the Jonah Field is managed by the BLM, a subagency of the United

 States Department of the Interior.

       Sometime in early 2012, BP conveyed the record title, operating rights,

 and royalty obligations for its Jonah Field leases to Linn Energy Holdings,

 LLC. In the applicants’ signature block for each lease transfer form, BP and

 Linn Energy marked the date as June 25, 2012, and declared, as between

 themselves, the transfer to be “EFFECTIVE as of the 1st of April, 2012.” E.g.,

 App. at 170. For unstated reasons, BP and Linn Energy delayed in filing the

 necessary forms with the BLM to provide the BLM notice of the transfers and

 seek the BLM’s necessary approval. See 43 C.F.R. § 3106.4-1. After the

 necessary filings, the BLM approved the transfers. For royalty-payment

 purposes, the BLM set effective dates of October 1, 2012, for the transfers filed

 in September, and of November 1, 2012, for the transfers filed in October. See

 id. § 3106.7-4.

       On August 28, 2012, the State of Wyoming’s Mineral Audit Division of

 its Department of Audit began auditing BP’s federal royalty payments for the

 Jonah Field between 2008 and 2011. At BP’s request, in June 2014 the State

 expanded its audit to include calendar year 2012, so that the audit would cover

 the periods after BP transferred the leases to Linn Energy. In March and April

 2016, the State notified BP of its audit findings that BP owed underpayments of

                                         5
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023   Page: 6

 more than $6.5 million for years 2008 to 2011 and more than $2.4 million for

 2012.

         In May 2016, BP objected to the State’s 2012 audit results, contending

 that the “total royalty amount should be reduced . . . to a total royalty under

 payment of $1,912,993.63.” Supp. App. at 6. The State agreed to reduce the

 2012 royalty underpayment to $2,023,436.71, and BP began to pay it.

         But on September 27, 2016, BP changed course, advising the State that

 BP would no longer pay any of the royalty underpayments assessed for April to

 October 2012. BP claimed that Linn Energy (which had declared bankruptcy in

 May 2016) should be “responsible for the remaining months” because “the

 properties were sold to Linn with an effective date of April 2012.” App. at 148.

 BP did not dispute the methodology or calculation of the royalty underpayment

 for April to October 2012.

         By December 2016, BP completed payment of its royalty underpayments

 for 2008 to March 2012, but it continued to withhold the remaining

 $1,031,377.23 in underpayments for April to October 2012.

 III.    Procedural Background

         A.    The State’s Order

         On March 1, 2017, the State of Wyoming’s Mineral Audit Division

 ordered BP to pay the remaining royalty underpayments and rejected BP’s

 position that the transfer to Linn Energy took effect on April 1, 2012, before

 the BLM was notified of and approved the transfers. The State ruled that BP

                                          6
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023   Page: 7

 remained liable for the royalty underpayments from April to October 2012

 because the BLM had not approved BP’s transfer to Linn Energy until

 November 1, 2012:

       Until BLM approves the lease assignment or lease transfer, BP
       continues to be responsible for the lease obligations. The effective
       date on the payor of record or operating rights BLM form signifies
       when BP is released from their obligation. The additional royalty
       due is $1,031,377.23 for April 2012 through October 2012.

 App. at 148. As its legal bases, the State relied on the RSFA and BLM’s

 implementing regulations. 2

       The State’s order attached numbered enclosures, including a summary

 schedule of the royalties owed by BP, which the parties call “Enclosure 6.”

 Enclosure 6 listed the individual royalty underpayments (by lease number,

 product, and month), which the State totaled as $1,031,377.23. Most of these

 individual royalty underpayments were less than $10,000.

       B.     The ONRR Proceedings

       In June 2017, BP appealed the State’s order to the ONRR. See 30 C.F.R.

 § 1290.105(a)(1). Notably, BP did not challenge the State’s aggregation of the

       2
         Assigning or subletting oil and gas leases requires the Secretary’s
 approval. 30 U.S.C. §§ 187, 187a. “[A]ny assignment or sublease shall take
 effect as of the first day of the lease month following the date of filing in the
 proper land office” and “until such approval, . . . the assignor . . . shall
 continue to be responsible for the performance of any and all obligations.” Id.
 § 187a; see also 43 C.F.R. §§ 3106.1(b), 3106.7-2, 3106.7-4. Such obligations
 include the payment of royalties on oil and gas production. 30 U.S.C.
 §§ 1702(25)(B)(ii)(I), 1712(a).

                                         7
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023   Page: 8

 individually assessed royalty obligations (into a single monetary obligation of

 $1,031,377.23). BP instead made four other arguments. First, BP repeated its

 challenge to all royalty underpayments from April to October 2012 on grounds

 that the BLM had “approved the assignments without modification” and so had

 adopted BP’s suggested effective date. App. at 177. Second, BP contended that

 during the rulemaking process for 43 C.F.R. § 3106.7-2, which governs

 assignors’ continuing royalty obligations, the BLM had assured stakeholders

 that this regulation would not apply to the determination of liability for

 production royalties. BP argued that the State’s enforcing § 3106.7-2 would

 violate the notice requirements of the Administrative Procedure Act (APA),

 because the State had taken a position in the order contrary to the BLM’s

 position in the rulemaking process. 3 Third, BP argued that the State’s order

 should at least be modified to exclude royalties after September 2012 because

 the transfers to Linn Energy were effective on October 1, 2012, making Linn

 Energy primarily responsible for those royalties. Fourth, BP argued that the

 State’s order unlawfully required it to perform a restructured accounting. See

 30 U.S.C. § 1724(d)(4)(B)(i) (explaining when “repeated, systemic reporting

 errors” trigger an order to perform a restructured accounting).

       3
        In its appeal to the district court, BP abandoned its notice-based
 rulemaking challenge to 43 C.F.R. § 3106.7-2.

                                         8
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023     Page: 9

       On September 30, 2020, the ONRR Director issued a decision. First, the

 Director rejected BP’s position that April 1, 2012, was the effective lease-

 transfer date for royalty purposes. The Director noted that both 30 U.S.C.

 § 187a and 43 C.F.R. § 3106.7-4 establish that “the submitted assignment or

 transfer request, if approved, takes effect on the first day of the month

 following the date of its filing in the proper BLM office.” App. at 194. The

 Director further noted that BP’s transfer forms do not even provide a space for

 assignors or transferors to insert effective assignment dates. Instead, “the only

 place on either form to set the effective date is expressly reserved ‘FOR BLM

 USE ONLY.’” Id. So, the Director ruled, “the ‘effective date’ that the [BLM]

 examiner placed on each Request Form controls over the date that BP

 suggested.” 4 App. at 195.

       Second, the Director rejected BP’s argument that the State’s order

 violates the APA. As mentioned, BP contended that the BLM had told

 commenters during the rulemaking process that 43 C.F.R. § 3106.7-2’s

 continuing-liability requirements would not apply to production royalties. The

 Director cited the BLM’s response to public comments on 43 C.F.R. § 3106.7-2

 to show that BP indeed had notice of the State’s position: “A commenter

       4
         The ONRR Director also rejected BP’s argument that its transfer forms
 created binding contracts with the United States, noting that BLM personnel
 lacked “actual authority to bind the government to a contract, much less to bind
 the government to terms different than those found in 30 U.S.C. § 187a and
 43 C.F.R. § 3106.7-4.” App. at 195 n.31.

                                          9
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023   Page: 10

  suggested that we recognize the terms of assignment agreements that specify

  which responsibilities are assigned or transferred. The final rule did not adopt

  this suggestion because we cannot be bound by agreements to which we are not

  a party.” App. at 198 (quoting Oil and Gas Leasing: Onshore Oil and Gas

  Operations, 66 Fed. Reg. 1883, 1889 (Jan. 10, 2001)).

        Third, observing that “BP identifies no calculation error” in Enclosure 6,

  the Director focused on the primary issue BP presented to the ONRR—the

  effective date of the transfers of BP’s Jonah Field leases. App. at 199. Relying

  on 30 U.S.C. § 1712(a), the Director concluded as follows:

             BP is primarily liable for royalties due for the production
              months April 2012 through September 2012, on the 21 Leases
              where it transferred its operating rights to Linn effective
              October 1, 2012. . . .

             BP is primarily liable for royalties due for the production
              months April 2012 through October 2012, on the two Leases
              where BP transferred its operating rights to Linn Energy
              effective November 1, 2012. . . .

             BP is secondarily liable for royalties due for production
              months April 2012 through October 2012, on the four Leases
              where BP assigned its record title to Linn effective
              November 1, 2012.

  App. at 199–200.

        The Director granted in part BP’s argument that the State had erred by

  including some royalty obligations “related to a Lease or production month

                                         10
Appellate Case: 22-8024    Document: 010110963862       Date Filed: 12/06/2023   Page: 11

  where BP was not a lessee,” thus reducing BP’s monetary obligation to

  $905,348.24. 5 Id. at 200.

        Fourth, the Director concluded that the State’s order did not require BP

  to perform a restructured accounting, finding no record or statutory support for

  BP’s argument. The Director affirmed the State’s order “as amended,” and

  concluded that “BP must report and pay $905,348.24 in additional royalties no

  later than 30 days after its receipt of this decision.” Id. at 203.

        C.     The IBLA Proceedings

        On October 21, 2020, BP appealed the ONRR Director’s decision to the

  IBLA. Under 30 U.S.C. § 1724(h)(1), if the Secretary of the Interior opts to

  “issue a final decision in any administrative proceeding,” she must do so

  “within 33 months from the date such proceeding was commenced,” unless both

  parties agree to extend the deadline. The parties jointly agreed to extend the

  33-month statutory period to December 2, 2020, and in doing so reminded the

  IBLA that if the Secretary opted not to issue a decision by then, that the

  Secretary “shall be deemed to have issued a final decision” and BP “shall have

  a right to judicial review of [that] deemed final decision.” Supp. App. at 13–14

  (quoting 30 U.S.C. § 1724(h)(2)(B)).

        5
         As part of the Director’s decision, the ONRR prepared “Amended
  Enclosure 6,” which detailed the Jonah Field lease obligations by lease and
  month. App. at 205.

                                            11
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023   Page: 12

        On December 2, 2020, citing § 1724(h)(2)(B), the IBLA issued an order

  stating that “by operation of law, it will be deemed that the Secretary issues a

  final decision in favor of the Secretary affirming those issues for which the

  ONRR Director rendered a decision on September 30, 2020.” Supp. App. at 16–

  17. In other words, the Secretary opted for a “deemed” final decision rather

  than issue her own written decision.

        A week later, the IBLA issued another order, formally dismissing BP’s

  appeal. The IBLA reiterated that “[b]y operation of law, the Secretary is

  deemed to have affirmed [the] ONRR Director’s decision.” Id. at 21.

        D.    The District Court Proceedings

        BP timely appealed the IBLA’s final agency action to the United States

  District Court for the District of Wyoming. For the first time, BP argued that

  the imposed $905,348.24 monetary obligation was really 443 individual

  monetary obligations. Under § 1724(h)(2)(A), BP argued that the Secretary’s

  deemed final decision released BP from paying the 432 royalty-underpayment

  obligations that were less than $10,000. That would leave just 11 of the 443

  listed royalty obligations—the 11 individual obligations that exceeded $10,000

  and totaled $218,576.49. Thus, by BP’s reckoning, it no longer owed

  $686,771.75 of the correctly assessed $905,348.24 royalty underpayments.

  According to BP, each of the 443 royalty obligations was a separate “monetary

  obligation.” App. at 34.

                                          12
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023   Page: 13

        Additionally, BP maintained its challenge to the effective date of its

  lease transfers, claiming that it owed no royalties from April to October 2012.

  BP argued that “[u]pon the effective date of BLM’s approval of those

  assignments, Linn Energy owned the relevant lease interests and was bound to

  the terms of the leases, dating back to April 1, 2012, to the same extent as if

  Linn Energy were an original lessee.” Id. at 46.

        Finally, BP alternatively argued that the Secretary’s “deemed” final

  decision under § 1724(h)(2) lacked a reasoned basis and thus violated the APA.

  As we understand this argument, BP contended that the Secretary’s “silent”

  final decision (the deemed final decision) was a standalone decision, divorced

  from the ONRR Director’s decision.

        The district court rejected each of BP’s arguments and affirmed the

  Secretary’s “deemed” final agency decision. The court disagreed with BP that

  the Secretary’s deemed final decision had, by operation of § 1724(h)(2)(A),

  reversed the IBLA’s ruling that BP owed royalty underpayments for 432 of the

  IBLA’s collectively assessed royalty obligations that were less than $10,000.

  Instead, the district court ruled under § 1724(h)(2)(B) that BP was liable for a

  single monetary obligation of $905,348.24. In the district court’s words, “the

  issue decided by the Director was the effective date of BP’s assignment” and

  “[a]s to that issue, the Director’s decision resulted in a monetary obligation of

  $905,348.24.” App. at 124. With one monetary obligation of $905,348.24, BP

                                          13
Appellate Case: 22-8024    Document: 010110963862       Date Filed: 12/06/2023   Page: 14

  had no monetary obligation less than $10,000 to avail itself of § 1724(h)(2)(A),

  or to challenge the district court’s appellate jurisdiction under that subsection.

        Next, the court addressed BP’s “effective date” argument. Under the

  Mineral Leasing Act and its implementing regulations, 43 C.F.R. §§ 3106.7-2

  and 3106.7-4, the court ruled that “BP’s assignment of record title or transfer

  of operating rights for the leases took effect as of the first day of the lease

  month following the date of filing, which was either October 1, 2012, or

  November 1, 2012.” Id. at 126–27. The district court agreed with the ONRR

  Director that “BP cannot change its statutory or regulatory obligations by any

  negotiations with a third party, or by altering the transfer forms to type in a

  different effective date for the transfer.” Id. at 127.

        BP has timely appealed. BP challenges the district court’s total-

  monetary-obligation ruling, but, as mentioned, BP has abandoned its “effective

  date” argument, the sole issue it presented to the agency. So the issue before us

  is one that BP failed to alert the Secretary to before she decided whether a

  deemed final decision would suffice. If BP had so alerted the Secretary, she

  may well have issued a final written decision individually adjudicating each of

  the 443 royalty obligations, thus foreclosing BP’s ability to seek relief from a

  deemed final decision under § 1724(h)(2)(A), the argument it now advances to

  us.

                                           14
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023      Page: 15

                                  JURISDICTION

        This Court has jurisdiction under 28 U.S.C. § 1291 to review BP’s appeal

  of the district court’s final affirmance of agency action. Kansas ex rel. Kobach

  v. U.S. Dep’t of Interior, 72 F.4th 1107, 1124 (10th Cir. 2023). We also have

  jurisdiction to review final agency actions under the APA. 5 U.S.C. § 704; see

  also 30 U.S.C. § 1724(h)(2)(B) (“[T]he appellant shall have a right to judicial

  review of such deemed final decision in accordance with Title 5.”).

                                   DISCUSSION

        On appeal, BP asserts that the district court erred in two ways: (1) by

  reading “monetary obligation” as used in § 1724(h)(2)(A) and (B) to mean the

  aggregated monetary obligation of BP’s individual royalty obligations totaling

  $905,348.24; and (2) by affirming the Secretary’s so-called “silent” deemed

  final decision, allegedly lacking a reasoned basis as the APA requires.

        Each party claims that “monetary obligation” is unambiguous in its favor.

  But we conclude that the term is ambiguous in contexts like this one, which

  involve multiple assessed royalty obligations, some more than $10,000, some

  less. In resolving this ambiguity, we examine related statutory language and

  then buttress our interpretation of those statutes by relying on the obvious

  congressional intent behind the RSFA.

        We review de novo a district court’s rulings on agency actions. Kobach,

  72 F.4th at 1124. We owe no deference to the district court’s decision and

  “render an independent decision using the same standard of review” as the

                                          15
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023   Page: 16

  district court. Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1580

  (10th Cir. 1994) (citation omitted). And we will not disturb agency action

  unless it is “arbitrary, capricious, an abuse of discretion, or otherwise not in

  accordance with law.” 5 U.S.C. § 706(2)(A).

  I.    Though the meaning of “monetary obligation” is ambiguous in BP’s
        case, we resolve the ambiguity in the government’s favor based on
        surrounding statutory language and expressed congressional intent.

        We begin by examining whether the language of § 1724(h)(2) has a

  “plain and unambiguous meaning with regard to the particular dispute in the

  case.” Ceco Concrete Const., LLC v. Centennial State Carpenters Pension Tr.,

  821 F.3d 1250, 1258 (10th Cir. 2016) (quoting Robinson v. Shell Oil Co.,

  519 U.S. 337, 340 (1997)). When interpreting a statute, “our primary task is to

  determine congressional intent, using traditional tools of statutory

  interpretation.” Potts v. Ctr. for Excellence in Higher Educ., Inc., 908 F.3d

  610, 613 (10th Cir. 2018) (cleaned up). If “the statutory scheme is coherent and

  consistent, there generally is no need for a court to inquire beyond the plain

  language of the statute.” United States v. Ron Pair Enters., Inc., 489 U.S. 235,

  240–41 (1989); see also Robinson, 519 U.S. at 340.

        To determine whether a statute is plain and unambiguous, we examine

  “the language itself, the specific context in which that language is used, and the

  broader context of the statute as a whole.” Robinson, 519 U.S. at 341; see also

  Hamer v. City of Trinidad, 924 F.3d 1093, 1103 (10th Cir. 2019) (“[T]he

  meaning of statutory language, plain or not, depends on context.” (cleaned up)).

                                          16
Appellate Case: 22-8024    Document: 010110963862     Date Filed: 12/06/2023    Page: 17

  We also presume that Congress enacted sensible legislation that avoids unjust,

  impractical, or absurd outcomes. United States v. Kirby, 74 U.S. (7 Wall.) 482,

  486–87 (1868); see also Resol. Tr. Corp. v. Westgate Partners, Ltd., 937 F.2d

  526, 529–30 (10th Cir. 1991). When possible, we try to “give effect to each

  word” and only “reject words as surplusage if inadvertently inserted or if

  repugnant to the rest of the statute.” Chickasaw Nation v. United States,

  534 U.S. 84, 94 (2001) (cleaned up).

        We turn now to the statute in question. As noted in its heading, § 1724(h)

  addresses “[a]ppeals and final agency action.” It generally provides that

  “[d]emands or orders issued by the Secretary or a delegated State are subject to

  administrative appeal in accordance with the regulations of the Secretary.”

  30 U.S.C. § 1724(h)(1).

        We consider § 1724(h)(2)’s disputed terms in full:

        (h) Appeals and final agency action

              ....

              (2)    Effect of failure to issue decision

              If no such decision has been issued by the Secretary within the
              33-month period referred to in paragraph (1)—

                     (A)    the Secretary shall be deemed to have
                            issued and granted a decision in favor of the
                            appellant as to any nonmonetary obligation
                            and any monetary obligation the principal
                            amount of which is less than $10,000; and

                     (B)    the Secretary shall be deemed to have
                            issued a final decision in favor of the

                                          17
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023    Page: 18

                           Secretary, which decision shall be deemed
                           to affirm those issues for which the agency
                           rendered a decision prior to the end of such
                           period, as to any monetary obligation the
                           principal amount of which is $10,000 or
                           more, and [BP] shall have a right to judicial
                           review of such deemed final decision in
                           accordance with Title 5.

  Id. § 1724(h)(2)(A)–(B) (emphases added).

        This appeal turns on the interpretation of the term “monetary obligation.”

  For help interpreting this term, we lean on related statutory definitions in the

  Royalty Management Act. See id. § 1702. Though the Act does not define

  “monetary obligation,” it does define “obligation” and “order to pay.”

  Id. § 1702(25), (26). The Act allows obligors to pay oil or gas royalties either

  “in kind” or in money. Id. § 1702(25)(B). For those paying monetarily, the Act

  defines an “obligation” as “any duty of a lessee or its designee” to pay “monies

  including . . . the principal amount of any royalty . . . which arises from or

  relates to any lease administered by the Secretary” for production of “oil or gas

  on Federal lands.” Id. § 1702(25)(B)(ii).

        The Act then enforces collection of the monetary obligation through a

  written order:

        “[O]rder to pay” means a written order issued by the Secretary or the
        applicable delegated State to a lessee or its designee . . . which—

              (A)    asserts a specific, definite, and        quantified
                     obligation claimed to be due, and

              (B)    specifically identifies the obligation by lease,
                     production month and monetary amount of such

                                          18
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023      Page: 19

                     obligation claimed to be due and ordered to be
                     paid[.]

  Id. § 1702(26). As seen, an order to pay speaks to a single obligation, not

  multiple obligations. From that, we conclude that the monetary obligation in

  this case is the total amount ordered paid ($905,348.24)—not each of the 443

  constituent royalty obligations.

        Yet we see ambiguity. We acknowledge that the $905,348.24 ordered to

  be paid here—though a “specific, definite, and quantified” amount due—does

  not arise from a single lease, production month, and monetary amount. But we

  read the purpose of this “lease, production month and monetary amount”

  condition as providing the obligor with notice of the individual royalty

  obligations included in the monetary obligation, so the obligor can contest any

  obligations individually.

        In Amended Enclosure 6, the ONRR Director provided BP this

  information. And with this itemization, BP could challenge—and the ONRR

  could review and reduce—the individual royalty underpayments by the

  effective date of BP’s lease transfers. 6 Otherwise stated, § 1702(26) requires

  that the order to pay identify the subparts of an obligation, but it does not

        6
          As BP notes, the ONRR Director’s decision “affirmed the [State] Order
  with respect to the majority of the underlying royalty obligations but reversed
  the Order with respect to ‘any royalty obligation related to a Lease or
  production month where BP was not a lessee.’” Reply Br. at 12 (quoting App.
  at 200). But this simply acknowledges that disputed royalty obligations are
  considered individually but ordered paid only when legally owed.

                                          19
Appellate Case: 22-8024     Document: 010110963862     Date Filed: 12/06/2023   Page: 20

  define those subparts as individual monetary obligations. Reading the statute

  BP’s way might well require clogging the system with 443 separate orders to

  pay. 7

           We also acknowledge BP’s point that ONRR regulations require separate

  reporting requirements for different oil and gas products, which must be broken

  down by lease, product, and month. See Op. Br. at 6–7 (citing 30 C.F.R.

  §§ 1202.101, 1202.151, 1202.152, 1210.53, 1218.50). But whatever BP’s

  regulatory reporting requirements, they do not determine or define the

  “monetary obligation” as used in § 1724(h)(2)(A)–(B)’s deemed-final-decision

  rule. After all, a statutory provision governing judicial review serves a different

  purpose. See Env’t Def. v. Duke Energy Corp., 549 U.S. 561, 575–76 (2007)

  (stating that “[c]ontext counts” when interpreting the “same defined term in

  different provisions of the same statute”).

           Congressional intent reinforces our statutory interpretation. Congress

  enacted the RSFA largely to provide “faster audit, royalty collection and

  appeals processes” so that “moneys owed to the United States [are collected] in

  a shorter period of time.” S. Rep. 104-260, at 13. The RSFA also streamlined

  the appeals process to effect “quicker resolution of money disputes between the

           7
          At oral argument, BP asserted that “the Department of the Interior could
  have issued individual orders for each one of [the individual royalty
  obligations,] and then we’d be looking at . . . the principal amount for each
  individual royalty obligation for determining the $10,000 threshold.” Oral
  Argument at 11:02–11:14.

                                            20
Appellate Case: 22-8024   Document: 010110963862       Date Filed: 12/06/2023   Page: 21

  United States and royalty payors.” Id. BP’s reading of the statute would

  frustrate this congressional intent by requiring the ONRR to rule individually

  on each royalty obligation less than $10,000—even if the debtor concedes

  owing the obligations. And if the Secretary overlooked issuing a final decision

  affirming all individual royalty obligations and not just their total—for

  instance, as with the $686,771.75 that BP agrees were correctly assessed—the

  government would lose that revenue as well as untold other revenue in like

  appeals. And all for no good reason. For us, it is obvious that Congress did not

  intend BP’s requested result.

        Finally, we read § 1724(h)(2)(A)’s “less than $10,000” demarcation as

  applying when the monetary obligation in the Order to Pay meets that

  condition. So, hypothetically, if a company challenged a single royalty

  obligation of less than $10,000 to the IBLA, or multiple royalty obligations

  totaling less than $10,000, and if the Secretary had opted for issuing a deemed

  final decision under the statute, the company would be relieved of its liability

  for those payments and have an enforceable right to relief under

  § 1724(h)(2)(A).

        But BP didn’t do that. Instead, it challenged its liability for the collective

  amount of those royalty obligations based on one issue—the “effective date” of

  the lease transfers. And because that issue determined BP’s liability for all the

  outstanding royalty payments, the total “monetary obligation” implicated by

                                          21
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023     Page: 22

  BP’s appeal was $905,348.24, a sum well above the $10,000 statutory

  condition. Only once in federal court did BP unsheathe § 1724(h)(2)(A).

        Based on our statutory interpretation, we affirm the district court’s order

  holding BP liable for its monetary obligation of $905,348.24.

 II.    We agree with the BLM’s regulatory interpretation of “monetary
        obligation.”

        Ordinarily, after concluding that “monetary obligation” in § 1724(h)(2) is

  ambiguous, we would consult and defer to the agency’s interpretation of this

  term. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837, 842–44

  (1984). But BP contends that we cannot defer here “because Section 1724(h)

  confers jurisdiction to the federal courts.” Op. Br. at 19 (citing Murphy Expl. &

  Prod. Co. v. U.S. Dep’t of Interior, 252 F.3d 473, 482 (D.C. Cir. 2001),

  modified on denial of reh’g, 270 F.3d 957 (D.C. Cir. 2001)). In so arguing, BP

  asserts that the statute’s interpretation is “categorically not a matter of agency

  judgment.” Id. (quoting United States v. Fields, 516 F.3d 923, 934 (10th Cir.

  2008)). Though we see distinctions here from Murphy, we will assume without

  deciding that BP is correct, because the government has failed to brief this

  issue. 8 We leave the question for another day. So, we will not defer to the

  agency’s interpretation in this appeal.

        8
           In Murphy, the D.C. Circuit examined whether a refund request was an
  “administrative proceeding” within the meaning of 30 U.S.C. §1702(18), such
  that it would trigger § 1724(h)(1)’s 33-month period, the lapse of which would
  invoke the district court’s appellate jurisdiction. 252 F.3d at 477, 480. The
                                                                  (footnote continued)
                                            22
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023     Page: 23

        Even so, for completeness, we take note of the regulation in passing. The

  BLM defines “monetary obligation” as “a lessee’s . . . duty to pay, . . . any

  obligation in any order.” 43 C.F.R. § 4.903. Further, it instructs how “[t]o

  determine the amount of any monetary obligation, for purposes of the default

  rule of decision in . . . 30 U.S.C. [§] 1724(h)”:

        (1)   If an order asserts a monetary obligation arising from one
              issue or type of underpayment that covers multiple leases or
              production months, the total obligation for all leases or
              production months involved constitutes a single monetary
              obligation; [and]

        (2)   If an order asserts monetary obligations arising from different
              issues or types of underpayments for one or more leases, the
              obligations arising from each separate issue . . . constitute
              separate monetary obligations.

  43 C.F.R. § 4.903.

        Here, BP faces “a monetary obligation arising from one issue or type of

  underpayment that covers multiple leases or production months.” Id. (emphases

  added). And the ONRR Director imposed a monetary obligation of $905,348.24

  arising from one issue—the effective date of the Linn Energy transfers and

  BP’s liability for the royalties—which covered multiple leases and production

  months. Though we rely on our own statutory interpretation and not 43 C.F.R.

  issue in Murphy was clearly jurisdictional because the district court’s
  interpretation of “administrative proceeding” directly determined the appellate-
  jurisdiction issue. Id. at 477.

                                          23
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023    Page: 24

  § 4.903, we note that the agency’s interpretation of § 1724(h)(2) matches our

  own interpretation of the statute.

  III.   Section 1724(h)(2)(B) does not violate the APA.

         Under § 1724(h)(2)(B), “the appellant shall have a right to judicial

  review of such deemed final decision in accordance with Title 5.” We

  understand “Title 5” to refer to the judicial review provisions of the APA,

  5 U.S.C. §§ 701–706. From this, BP takes a remarkable position on appeal. It

  argues that all “deemed” final decisions by the Secretary violate the APA,

  because these decisions are silent and “lack[] any articulated basis—let alone

  the ‘reasoned’ basis that decades of case law mandate for an agency decision to

  be upheld.” Op. Br. at 37. Though in the district court BP treated the ONRR

  Director’s decision as the agency’s final decision, it now faults the district

  court for doing so. 9

         Changing tack, BP contends that nothing in § 1724(h)(2)(B) allows the

  Secretary to incorporate the ONRR Director’s decision into her deemed final

         9
           The government points out that in BP’s petition for review in the
  district court, BP stated that “[t]he September 30, 2020, decision of the ONRR
  Director, deemed by operation of law to be Interior’s final decision in BP’s
  administrative appeal (hereinafter the ‘Final Decision’), is attached hereto as
  Exhibit 1.” Resp. Br. at 39 (quoting App. at 8). The government noted that BP
  challenged the Director’s decision as the Secretary’s deemed final decision and
  argued under the APA that it conflicted with the RSFA and the Mineral Leasing
  Act. In its Reply brief, BP responds to this “chid[ing]” by asserting that “in that
  filing BP explained that Interior was deemed to have issued a final decision
  affirming the Director’s Decision, triggering BP’s right to judicial review.”
  Reply Br. at 23 n.28.

                                          24
Appellate Case: 22-8024   Document: 010110963862      Date Filed: 12/06/2023   Page: 25

  decision. 10 In doing so, BP ignores the key language from subsection (B): “the

  Secretary shall be deemed to have issued a final decision in favor of the

  Secretary, which decision shall be deemed to affirm those issues for which the

  agency rendered a decision prior to the end of such period[.]” 30 U.S.C.

  § 1724(h)(2)(B) (emphasis added). This language matters. It says that for

  appeals with a monetary obligation of $10,000 or more, the Secretary’s deemed

  final decision adopts the ONRR Director’s decision on the issues raised. 11 So

  we reject BP’s argument that the Secretary’s deemed final decision is “silent,”

  Op. Br. at 40, and cannot be “the product of reasoned decisionmaking,” id.

  at 38 (citing Double J. Land & Cattle Co. v. U.S. Dep’t of Interior, 91 F.3d

  1378, 1383 (10th Cir. 1996)). 12

        10
          In support, BP cites statutes that it says “elevate” an inferior agency
  decision as the final decision of the agency. Op. Br. at 39 n.125 (citing 29
  U.S.C. §§ 3246(c), 1853(b)(2) and 20 U.S.C. § 1234a(g)). We acknowledge the
  difference in wording but not in result.
        11
           In OXY USA Inc. v. United States Department of the Interior, we
  briefly noted that “[t]he Board did not issue a final merits decision prior to the
  33-month limitations period,” and so “[t]he [ONRR] Director’s decision thus
  became the agency’s final decision ripe for judicial review.” 32 F.4th 1032,
  1043 (10th Cir. 2022) (citing 30 U.S.C. § 1724(h)(1), (2)(B); 43 C.F.R.
  § 4.906(a)).
        12
           In Double J., we reversed after noting that the record from the IBLA
  proceedings was “devoid of facts supporting the conclusion that [the corporate
  officer], as an individual, [wa]s trespassing on federal land.” 91 F.3d at 1383.
  In this case, the ONRR’s record is robust and certainly not “silent” as in
  Double J.

                                          25
Appellate Case: 22-8024   Document: 010110963862     Date Filed: 12/06/2023   Page: 26

        As the district court noted, BP’s APA “argument . . . would effectively

  nullify all deemed affirmed final decisions under the RSFA.” App. at 125. By

  BP’s logic, any such deemed final decision would fail APA review by not

  articulating a reasoned basis, or any basis at all. We agree with the government

  that BP’s argument would require that Congress had “intentionally fashioned a

  circular, self-defeating process under which [the] RSFA first directs that the

  Secretary’s deemed-final decision is reviewed under the APA, and the APA

  then directs that [the] Secretary’s deemed-final decision fails review.” Resp.

  Br. at 40.

                                   CONCLUSION

        The district court’s order is affirmed.

  BALDOCK, J. concurs in the judgment only.

                                          26