Fifth Circuit Holds Interior's Cash-for-Kind Royalty Switch Requires Notice-and-Comment Rulemaking

W & T Offshore challenged Interior's demand for cash payment to resolve shortfalls in prior in-kind natural gas royalty deliveries on federal OCS leases, arguing the agency's policy shift constituted an unenforceable substantive rule promulgated without APA notice-and-comment procedures. The Fifth Circuit affirmed the district court's holding that Interior's requirement was not a substantive rule subject to notice-and-comment rulemaking, but reversed on equitable recoupment, holding that the doctrine applied to overcome OCSLA's limitations period and required Interior to credit W & T's over-deliveries against cumulative shortfalls.