As reported by Broc Romanek yesterday, the Securities and Exchange Commission adopted (again) a resource extraction rule. Congress had ordered the SEC to adopt a rule by April 17, 2011. After belatedly adopting a rule, the U.S. District Court vacated the rule and sent it back to the SEC. American Petroleum Institute v. SEC, 953 F. Supp. 2d 5 (D. D.C. 2013). Oxfam America then successfully sued the SEC to force it to do what Congress had long ago ordered it to do. Oxfam Am., Inc. v. United States SEC, 2015 U.S. Dist. LEXIS 116982 (D. Mass. Sept. 2, 2015). The SEC then promised to have a vote on a proposed rule by June 27, 2016. Whether from petulance, chagrin or expediency, the SEC adopted the rule on the very last day without holding a public meeting. For the record, the SEC missed Congress’ deadline by five years, two months and ten days.
“And whispering ‘I will ne’er consent’–consented”
In a comment letter to the SEC, I recommended that the SEC define “mineral”. See Resource Extraction Payments Disclosure: “I’ve Information Vegetable, Animal, and Mineral”. Although claiming not to define the term, the SEC nonetheless defines it in a footnote to the adopting release:
We believe that this also supports our view that, as commonly used when referring to mineral resources, “mineral” refers to the broader, non-technical meaning, which is any organic or inorganic natural resource extracted from the earth for human use.
Thus, the SEC seems to regard that gravel, sand, and even water are minerals. After all, water is an inorganic natural resource extracted from the earth for human use. Despite that SEC’s protestations to the contrary, my guess is that most people would not consider these substances to be minerals. The SEC’s claim to “common understanding” is further belied by the fact that parties have actually litigated the question of whether water is a mineral under a different statute. See Baker Hughes Oilfield Operations, Inc. v. Nat’l Rural Utils. Coop. Fin. Corp. (In re Naknek Elec. Ass’n), 471 B.R. 225 (Alaska 2012).
