§ 226. — Lease of oil and gas lands.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 30USC226]
TITLE 30--MINERAL LANDS AND MINING
CHAPTER 3A--LEASES AND PROSPECTING PERMITS
SUBCHAPTER IV--OIL AND GAS
Sec. 226. Lease of oil and gas lands
(a) Authority of Secretary
All lands subject to disposition under this chapter which are known
or believed to contain oil or gas deposits may be leased by the
Secretary.
(b) Lands within known geologic structure of a producing oil or gas
field; lands within special tar sand areas; competitive bidding;
royalties
(1)(A) All lands to be leased which are not subject to leasing under
paragraphs (2) and (3) of this subsection shall be leased as provided in
this paragraph to the highest responsible qualified bidder by
competitive bidding under general regulations in units of not more than
2,560 acres, except in Alaska, where units shall be not more than 5,760
acres. Such units shall be as nearly compact as possible. Lease sales
shall be conducted by oral bidding. Lease sales shall be held for each
State where eligible lands are available at least quarterly and more
frequently if the Secretary of the Interior determines such sales are
necessary. A lease shall be conditioned upon the payment of a royalty at
a rate of not less than 12.5 percent in amount or value of the
production removed or sold from the lease. The Secretary shall accept
the highest bid from a responsible qualified bidder which is equal to or
greater than the national minimum acceptable bid, without evaluation of
the value of the lands proposed for lease. Leases shall be issued within
60 days following payment by the successful bidder of the remainder of
the bonus bid, if any, and the annual rental for the first lease year.
All bids for less than the national minimum acceptable bid shall be
rejected. Lands for which no bids are received or for which the highest
bid is less than the national minimum acceptable bid shall be offered
promptly within 30 days for leasing under subsection (c) of this section
and shall remain available for leasing for a period of 2 years after the
competitive lease sale.
(B) The national minimum acceptable bid shall be $2 per acre for a
period of 2 years from December 22, 1987. Thereafter, the Secretary may
establish by regulation a higher national minimum acceptable bid for all
leases based upon a finding that such action is necessary: (i) to
enhance financial returns to the United States; and (ii) to promote more
efficient management of oil and gas resources on Federal lands. Ninety
days before the Secretary makes any change in the national minimum
acceptable bid, the Secretary shall notify the Committee on Natural
Resources of the United States House of Representatives and the
Committee on Energy and Natural Resources of the United States Senate.
The proposal or promulgation of any regulation to establish a national
minimum acceptable bid shall not be considered a major Federal action
subject to the requirements of section 4332(2)(C) of title 42.
(2) If the lands to be leased are within a special tar sand area,
they shall be leased to the highest responsible qualified bidder by
competitive bidding under general regulations in units of not more than
five thousand one hundred and twenty acres, which shall be as nearly
compact as possible, upon the payment by the lessee of such bonus as may
be accepted by the Secretary. Royalty shall be 12\1/2\ per centum in
amount or value of production removed or sold from the lease, subject to
subsection (k)(1)(c) \1\ of this section. The Secretary may lease such
additional lands in special tar sand areas as may be required in support
of any operations necessary for the recovery of tar sands.
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\1\ So in original. Probably should be subsection ``(k)(1)(C)''.
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(3)(A) If the United States held a vested future interest in a
mineral estate that, immediately prior to becoming a vested present
interest, was subject to a lease under which oil or gas was being
produced, or had a well capable of producing, in paying quantities at an
annual average production volume per well per day of either not more
than 15 barrels per day of oil or condensate, or not more than 60,000
cubic feet of gas, the holder of the lease may elect to continue the
lease as a noncompetitive lease under subsection (c)(1) of this section.
(B) An election under this paragraph is effective--
(i) in the case of an interest which vested after January 1,
1990, and on or before October 24, 1992, if the election is made
before the date that is 1 year after October 24, 1992;
(ii) in the case of an interest which vests within 1 year after
October 24, 1992, if the election is made before the date that is 2
years after October 24, 1992; and
(iii) in any case other than those described in clause (i) or
(ii), if the election is made prior to the interest becoming a
vested present interest.
(C) Notwithstanding the consent requirement referenced in section
352 of this title, the Secretary shall issue a noncompetitive lease
under subsection (c)(1) of this section to a holder who makes an
election under subparagraph (A) and who is qualified to hold a lease
under this chapter. Such lease shall be subject to all terms and
conditions under this chapter that are applicable to leases issued under
subsection (c)(1) of this section.
(D) A lease issued pursuant to this paragraph shall continue so long
as oil or gas continues to be produced in paying quantities.
(E) This paragraph shall apply only to those lands under the
administration of the Secretary of Agriculture where the United States
acquired an interest in such lands pursuant to the Act of March 1, 1911
(36 Stat. 961 and following).
(c) Lands subject to leasing under subsection (b); first qualified
applicant
(1) If the lands to be leased are not leased under subsection (b)(1)
of this section or are not subject to competitive leasing under
subsection (b)(2) of this section, the person first making application
for the lease who is qualified to hold a lease under this chapter shall
be entitled to a lease of such lands without competitive bidding, upon
payment of a non-refundable application fee of at least $75. A lease
under this subsection shall be conditioned upon the payment of a royalty
at a rate of 12.5 percent in amount or value of the production removed
or sold from the lease. Leases shall be issued within 60 days of the
date on which the Secretary identifies the first responsible qualified
applicant.
(2)(A) Lands (i) which were posted for sale under subsection (b)(1)
of this section but for which no bids were received or for which the
highest bid was less than the national minimum acceptable bid and (ii)
for which, at the end of the period referred to in subsection (b)(1) of
this section no lease has been issued and no lease application is
pending under paragraph (1) of this subsection, shall again be available
for leasing only in accordance with subsection (b)(1) of this section.
(B) The land in any lease which is issued under paragraph (1) of
this subsection or under subsection (b)(1) of this section which lease
terminates, expires, is cancelled or is relinquished shall again be
available for leasing only in accordance with subsection (b)(1) of this
section.
(d) Annual rentals
All leases issued under this section, as amended by the Federal
Onshore Oil and Gas Leasing Reform Act of 1987, shall be conditioned
upon payment by the lessee of a rental of not less than $1.50 per acre
per year for the first through fifth years of the lease and not less
than $2 per acre per year for each year thereafter. A minimum royalty in
lieu of rental of not less than the rental which otherwise would be
required for that lease year shall be payable at the expiration of each
lease year beginning on or after a discovery of oil or gas in paying
quantities on the lands leased.
(e) Primary terms
Competitive and noncompetitive leases issued under this section
shall be for a primary term of 10 years: Provided, however, That
competitive leases issued in special tar sand areas shall also be for a
primary term of ten years. Each such lease shall continue so long after
its primary term as oil or gas is produced in paying quantities. Any
lease issued under this section for land on which, or for which under an
approved cooperative or unit plan of development or operation, actual
drilling operations were commenced prior to the end of its primary term
and are being diligently prosecuted at that time shall be extended for
two years and so long thereafter as oil or gas is produced in paying
quantities.
(f) Notice of proposed action; posting of notice; terms and maps
At least 45 days before offering lands for lease under this section,
and at least 30 days before approving applications for permits to drill
under the provisions of a lease or substantially modifying the terms of
any lease issued under this section, the Secretary shall provide notice
of the proposed action. Such notice shall be posted in the appropriate
local office of the leasing and land management agencies. Such notice
shall include the terms or modified lease terms and maps or a narrative
description of the affected lands. Where the inclusion of maps in such
notice is not practicable, maps of the affected lands shall be made
available to the public for review. Such maps shall show the location of
all tracts to be leased, and of all leases already issued in the general
area. The requirements of this subsection are in addition to any public
notice required by other law.
(g) Regulation of surface-disturbing activities; approval of plan of
operations; bond or surety; failure to comply with reclamation
requirements as barring lease; opportunity to comply with
requirements
The Secretary of the Interior, or for National Forest lands, the
Secretary of Agriculture, shall regulate all surface-disturbing
activities conducted pursuant to any lease issued under this chapter,
and shall determine reclamation and other actions as required in the
interest of conservation of surface resources. No permit to drill on an
oil and gas lease issued under this chapter may be granted without the
analysis and approval by the Secretary concerned of a plan of operations
covering proposed surface-disturbing activities within the lease area.
The Secretary concerned shall, by rule or regulation, establish such
standards as may be necessary to ensure that an adequate bond, surety,
or other financial arrangement will be established prior to the
commencement of surface-disturbing activities on any lease, to ensure
the complete and timely reclamation of the lease tract, and the
restoration of any lands or surface waters adversely affected by lease
operations after the abandonment or cessation of oil and gas operations
on the lease. The Secretary shall not issue a lease or leases or approve
the assignment of any lease or leases under the terms of this section to
any person, association, corporation, or any subsidiary, affiliate, or
person controlled by or under common control with such person,
association, or corporation, during any period in which, as determined
by the Secretary of the Interior or Secretary of Agriculture, such
entity has failed or refused to comply in any material respect with the
reclamation requirements and other standards established under this
section for any prior lease to which such requirements and standards
applied. Prior to making such determination with respect to any such
entity the concerned Secretary shall provide such entity with adequate
notification and an opportunity to comply with such reclamation
requirements and other standards and shall consider whether any
administrative or judicial appeal is pending. Once the entity has
complied with the reclamation requirement or other standard concerned an
oil or gas lease may be issued to such entity under this chapter.
(h) National Forest System Lands
The Secretary of the Interior may not issue any lease on National
Forest System Lands reserved from the public domain over the objection
of the Secretary of Agriculture.
(i) Termination
No lease issued under this section which is subject to termination
because of cessation of production shall be terminated for this cause so
long as reworking or drilling operations which were commenced on the
land prior to or within sixty days after cessation of production are
conducted thereon with reasonable diligence, or so long as oil or gas is
produced in paying quantities as a result of such operations. No lease
issued under this section shall expire because operations or production
is suspended under any order, or with the consent, of the Secretary. No
lease issued under this section covering lands on which there is a well
capable of producing oil or gas in paying quantities shall expire
because the lessee fails to produce the same unless the lessee is
allowed a reasonable time, which shall be not less than sixty days after
notice by registered or certified mail, within which to place such well
in producing status or unless, after such status is established,
production is discontinued on the leased premises without permission
granted by the Secretary under the provisions of this chapter.
(j) Drainage agreements; primary term of lease, extension
Whenever it appears to the Secretary that lands owned by the United
States are being drained of oil or gas by wells drilled on adjacent
lands, he may negotiate agreements whereby the United States, or the
United States and its lessees, shall be compensated for such drainage.
Such agreements shall be made with the consent of the lessees, if any,
affected thereby. If such agreement is entered into, the primary term of
any lease for which compensatory royalty is being paid, or any extension
of such primary term, shall be extended for the period during which such
compensatory royalty is paid and for a period of one year from
discontinuance of such payment and so long thereafter as oil or gas is
produced in paying quantities.
(k) Mining claims; suspension of running time of lease
If, during the primary term or any extended term of any lease issued
under this section, a verified statement is filed by any mining claimant
pursuant to subsection (c) of section 527 of this title, whether such
filing occur prior to September 2, 1960 or thereafter, asserting the
existence of a conflicting unpatented mining claim or claims upon which
diligent work is being prosecuted as to any lands covered by the lease,
the running of time under such lease shall be suspended as to the lands
involved from the first day of the month following the filing of such
verified statement until a final decision is rendered in the matter.
(l) Exchange of leases; conditions
The Secretary of the Interior shall, upon timely application
therefor, issue a new lease in exchange for any lease issued for a term
of twenty years, or any renewal thereof, or any lease issued prior to
August 8, 1946, in exchange for a twenty-year lease, such new lease to
be for a primary term of five years and so long thereafter as oil or gas
is produced in paying quantities and at a royalty rate of not less than
12\1/2\ per centum in amount or value of the production removed or sold
from such leases, except that the royalty rate shall be 12\1/2\ per
centum in amount or value of the production removed or sold from said
leases as to (1) such leases, or such parts of the lands subject thereto
and the deposits underlying the same, as are not believed to be within
the productive limits of any producing oil or gas deposit, as such
productive limits are found by the Secretary to have existed on August
8, 1946; and (2) any production on a lease from an oil or gas deposit
which was discovered after May 27, 1941, by a well or wells drilled
within the boundaries of the lease, and which is determined by the
Secretary to be a new deposit; and (3) any production on or allocated to
a lease pursuant to an approved cooperative or unit plan of development
or operation from an oil or gas deposit which was discovered after May
27, 1941, on land committed to such plan, and which is determined by the
Secretary to be a new deposit, where such lease, or a lease for which it
is exchanged, was included in such plan at the time of discovery or was
included in a duly executed and filed application for the approval of
such plan at the time of discovery.
(m) Cooperative or unit plan; authority of Secretary of the Interior to
alter or modify; communitization or drilling agreements; term of
lease, conditions; Secretary to approve operating, drilling or
development contracts, and subsurface storage
For the purpose of more properly conserving the natural resources of
any oil or gas pool, field, or like area, or any part thereof (whether
or not any part of said oil or gas pool, field, or like area, is then
subject to any cooperative or unit plan of development or operation),
lessees thereof and their representatives may unite with each other, or
jointly or separately with others, in collectively adopting and
operating under a cooperative or unit plan of development or operation
of such pool, field, or like area, or any part thereof, whenever
determined and certified by the Secretary of the Interior to be
necessary or advisable in the public interest. The Secretary is
thereunto authorized, in his discretion, with the consent of the holders
of leases involved, to establish, alter, change, or revoke drilling,
producing, rental, minimum royalty, and royalty requirements of such
leases and to make such regulations with reference to such leases, with
like consent on the part of the lessees, in connection with the
institution and operation of any such cooperative or unit plan as he may
deem necessary or proper to secure the proper protection of the public
interest. The Secretary may provide that oil and gas leases hereafter
issued under this chapter shall contain a provision requiring the lessee
to operate under such a reasonable cooperative or unit plan, and he may
prescribe such a plan under which such lessee shall operate, which shall
adequately protect the rights of all parties in interest, including the
United States.
Any plan authorized by the preceding paragraph which includes lands
owned by the United States may, in the discretion of the Secretary,
contain a provision whereby authority is vested in the Secretary of the
Interior, or any such person, committee, or State or Federal officer or
agency as may be designated in the plan, to alter or modify from time to
time the rate of prospecting and development and the quantity and rate
of production under such plan. All leases operated under any such plan
approved or prescribed by the Secretary shall be excepted in determining
holdings or control under the provisions of any section of this chapter.
When separate tracts cannot be independently developed and operated
in conformity with an established well-spacing or development program,
any lease, or a portion thereof, may be pooled with other lands, whether
or not owned by the United States, under a communitization or drilling
agreement providing for an apportionment of production or royalties
among the separate tracts of land comprising the drilling or spacing
unit when determined by the Secretary of the Interior to be in the
public interest, and operations or production pursuant to such an
agreement shall be deemed to be operations or production as to each such
lease committed thereto.
Any lease issued for a term of twenty years, or any renewal thereof,
or any portion of such lease that has become the subject of a
cooperative or unit plan of development or operation of a pool, field,
or like area, which plan has the approval of the Secretary of the
Interior, shall continue in force until the termination of such plan.
Any other lease issued under any section of this chapter which has
heretofore or may hereafter be committed to any such plan that contains
a general provision for allocation of oil or gas shall continue in force
and effect as to the land committed so long as the lease remains subject
to the plan: Provided, That production is had in paying quantities under
the plan prior to the expiration date of the term of such lease. Any
lease heretofore or hereafter committed to any such plan embracing lands
that are in part within and in part outside of the area covered by any
such plan shall be segregated into separate leases as to the lands
committed and the lands not committed as of the effective date of
unitization: Provided, however, That any such lease as to the
nonunitized portion shall continue in force and effect for the term
thereof but for not less than two years from the date of such
segregation and so long thereafter as oil or gas is produced in paying
quantities. The minimum royalty or discovery rental under any lease that
has become subject to any cooperative or unit plan of development or
operation, or other plan that contains a general provision for
allocation of oil or gas, shall be payable only with respect to the
lands subject to such lease to which oil or gas shall be allocated under
such plan. Any lease which shall be eliminated from any such approved or
prescribed plan, or from any communitization or drilling agreement
authorized by this section, and any lease which shall be in effect at
the termination of any such approved or prescribed plan, or at the
termination of any such communitization or drilling agreement, unless
relinquished, shall continue in effect for the original term thereof,
but for not less than two years, and so long thereafter as oil or gas is
produced in paying quantities.
The Secretary of the Interior is hereby authorized, on such
conditions as he may prescribe, to approve operating, drilling, or
development contracts made by one or more lessees of oil or gas leases,
with one or more persons, associations, or corporations whenever, in his
discretion, the conservation of natural products or the public
convenience or necessity may require it or the interests of the United
States may be best subserved thereby. All leases operated under such
approved operating, drilling, or development contracts, and interests
thereunder, shall be excepted in determining holdings or control under
the provisions of this chapter.
The Secretary of the Interior, to avoid waste or to promote
conservation of natural resources, may authorize the subsurface storage
of oil or gas, whether or not produced from federally owned lands, in
lands leased or subject to lease under this chapter. Such authorization
may provide for the payment of a storage fee or rental on such stored
oil or gas or, in lieu of such fee or rental, for a royalty other than
that prescribed in the lease when such stored oil or gas is produced in
conjunction with oil or gas not previously produced. Any lease on which
storage is so authorized shall be extended at least for the period of
storage and so long thereafter as oil or gas not previously produced is
produced in paying quantities.
(n) Conversion of oil and gas leases and claims on hydrocarbon resources
to combined hydrocarbon leases for primary term of 10 years;
application
(1)(A) The owner of (1) an oil and gas lease issued prior to
November 16, 1981, or (2) a valid claim to any hydrocarbon resources
leasable under this section based on a mineral location made prior to
January 21, 1926, and located within a special tar sand area shall be
entitled to convert such lease or claim to a combined hydrocarbon lease
for a primary term of ten years upon the filing of an application within
two years from November 16, 1981, containing an acceptable plan of
operations which assures reasonable protection of the environment and
diligent development of those resources requiring enhanced recovery
methods of development or mining. For purposes of conversion, no claim
shall be deemed invalid solely because it was located as a placer
location rather than a lode location or vice versa, notwithstanding any
previous adjudication on that issue.
(B) The Secretary shall issue final regulations to implement this
section within six months of November 16, 1981. If any oil and gas lease
eligible for conversion under this section would otherwise expire after
November 16, 1981, and before six months following the issuance of
implementing regulations, the lessee may preserve his conversion right
under such lease for a period ending six months after the issuance of
implementing regulations by filing with the Secretary, before the
expiration of the lease, a notice of intent to file an application for
conversion. Upon submission of a complete plan of operations in
substantial compliance with the regulations promulgated by the Secretary
for the filing of such plans, the Secretary shall suspend the running of
the term of any oil and gas lease proposed for conversion until the plan
is finally approved or disapproved. The Secretary shall act upon a
proposed plan of operations within fifteen months of its submittal.
(C) When an existing oil and gas lease is converted to a combined
hydrocarbon lease, the royalty shall be that provided for in the
original oil and gas lease and for a converted mining claim, 12\1/2\ per
centum in amount or value of production removed or sold from the lease.
(2) Except as provided in this section, nothing in the Combined
Hydrocarbon Leasing Act of 1981 shall be construed to diminish or
increase the rights of any lessee under any oil and gas lease issued
prior to November 16, 1981.
(o) Certain outstanding oil and gas deposits
(1) Prior to the commencement of surface-disturbing activities
relating to the development of oil and gas deposits on lands described
under paragraph (5), the Secretary of Agriculture shall require,
pursuant to regulations promulgated by the Secretary, that such
activities be subject to terms and conditions as provided under
paragraph (2).
(2) The terms and conditions referred to in paragraph (1) shall
require that reasonable advance notice be furnished to the Secretary of
Agriculture at least 60 days prior to the commencement of surface
disturbing activities.
(3) Advance notice under paragraph (2) shall include each of the
following items of information:
(A) A designated field representative.
(B) A map showing the location and dimensions of all
improvements, including but not limited to, well sites and road and
pipeline accesses.
(C) A plan of operations, of an interim character if necessary,
setting forth a schedule for construction and drilling.
(D) A plan of erosion and sedimentation control.
(E) Proof of ownership of mineral title.
Nothing in this subsection shall be construed to affect any authority of
the State in which the lands concerned are located to impose any
requirements with respect to such oil and gas operations.
(4) The person proposing to develop oil and gas deposits on lands
described under paragraph (5) shall either--
(A) permit the Secretary to market merchantable timber owned by
the United States on lands subject to such activities; or
(B) arrange to purchase merchantable timber on lands subject to
such surface disturbing activities from the Secretary of
Agriculture, or otherwise arrange for the disposition of such
merchantable timber, upon such terms and upon such advance notice of
the items referred to in subparagraphs (A) through (E) of paragraph
(3) as the Secretary may accept.
(5)(A) The lands referred to in this subsection are those lands
referenced in subparagraph (B) which are under the administration of the
Secretary of Agriculture where the United States acquired an interest in
such lands pursuant to the Act of March 1, 1911 (36 Stat. 961 and
following), but does not have an interest in oil and gas deposits that
may be present under such lands. This subsection does not apply to any
such lands where, under the provisions of its acquisition of an interest
in the lands, the United States is to acquire any oil and gas deposits
that may be present under such lands in the future but such interest has
not yet vested with the United States.
(B) This subsection shall only apply in the Allegheny National
Forest.
(Feb. 25, 1920, ch. 85, Sec. 17, 41 Stat. 443; July 3, 1930, ch. 854,
Sec. 1, 46 Stat. 1007; Mar. 4, 1931, ch. 506, 46 Stat. 1523; Aug. 21,
1935, ch. 599, Sec. 1, 49 Stat. 676; Aug. 8, 1946, ch. 916, Sec. 3, 60
Stat. 951; July 29, 1954, ch. 644, Sec. 1(1)-(3), 68 Stat. 583; Pub. L.
86-507, Sec. 1(21), June 11, 1960, 74 Stat. 201; Pub. L. 86-705, Sec. 2,
Sept. 2, 1960, 74 Stat. 781; Pub. L. 97-78, Sec. 1(6), (8), Nov. 16,
1981, 95 Stat. 1070, 1071; Pub. L. 100-203, title V, Sec. 5102(a)-
(d)(1), Dec. 22, 1987, 101 Stat. 1330-256, 1330-257; Pub. L. 102-486,
title XXV, Secs. 2507(a), 2508(a), 2509, Oct. 24, 1992, 106 Stat. 3107-
3109; Pub. L. 103-437, Sec. 11(a)(1), Nov. 2, 1994, 108 Stat. 4589; Pub.
L. 104-66, title I, Sec. 1081(a), Dec. 21, 1995, 109 Stat. 721.)
References in Text
Act of March 1, 1911, referred to in subsecs. (b)(3)(E) and
(o)(5)(A), is act Mar. 1, 1911, ch. 186, 36 Stat. 961, as amended, known
as the Weeks Law, which is classified to sections 480, 500, 513 to 519,
521, 552, and 563 of Title 16, Conservation. For complete classification
of this Act to the Code, see Short Title note set out under section 552
of Title 16 and Tables.
The Federal Onshore Oil and Gas Leasing Reform Act of 1987, referred
to in subsec. (d), is subtitle B (Secs. 5101 to 5113) of title V of Pub.
L. 100-203, Dec. 22, 1987, 101 Stat. 1330-256. For complete
classification of this Act to the Code, see Short Title of 1987
Amendment note set out under section 181 of this title and Tables.
The Combined Hydrocarbon Leasing Act of 1981, referred to in subsec.
(n)(2), is Pub. L. 97-78, Nov. 16, 1981, 95 Stat. 1070, which amended
sections 181, 182, 184, 209, 226, 241, 351, and 352 of this title and
enacted a provision set out as a note under section 181 of this title.
For complete classification of this Act to the Code, see Short Title of
1981 Amendment note set out under section 181 of this title and Tables.
Amendments
1995--Subsec. (j). Pub. L. 104-66 struck out at end ``The Secretary
shall report to Congress at the beginning of each regular session all
such agreements entered into during the previous year which involve
unleased Government lands.''
1994--Subsec. (b)(1)(B). Pub. L. 103-437 substituted ``Natural
Resources'' for ``Interior and Insular Affairs'' before ``of the United
States House''.
1992--Subsec. (b)(1)(A). Pub. L. 102-486, Sec. 2507(a)(1),
substituted ``under paragraphs (2) and (3)'' for ``under paragraph
(2)''.
Subsec. (b)(3). Pub. L. 102-486, Sec. 2507(a)(2), added par. (3).
Subsec. (e). Pub. L. 102-486, Sec. 2509, substituted ``Competitive
and noncompetitive leases issued under this section shall be for a
primary term of 10 years: Provided, however,'' for ``Competitive leases
issued under this section shall be for a primary term of five years and
noncompetitive leases for a primary term of ten years: Provided,
however,''.
Subsec. (o). Pub. L. 102-486, Sec. 2508(a), added subsec. (o).
1987--Subsec. (b)(1). Pub. L. 100-203, Sec. 5102(a), amended par.
(1) generally. Prior to amendment, par. (1) read as follows: ``If the
lands to be leased are within any known geological structure of a
producing oil or gas field, they shall be leased to the highest
responsible qualified bidder by competitive bidding under general
regulations in units of not more than six hundred and forty acres, which
shall be as nearly compact in form as possible, upon the payment by the
lessee of such bonus as may be accepted by the Secretary and of such
royalty as may be fixed in the lease, which shall be not less than 12\1/
2\ per centum in amount or value of the production removed or sold from
the lease.''
Subsec. (c). Pub. L. 100-203, Sec. 5102(b), amended subsec. (c)
generally. Prior to amendment, subsec. (c) read as follows: ``If the
lands to be leased are not subject to leasing under subsection (b) of
this section, the person first making application for the lease who is
qualified to hold a lease under this chapter shall be entitled to a
lease of such lands without competitive bidding. Such leases shall be
conditioned upon the payment by the lessee of a royalty of 12\1/2\ per
centum in amount or value of the production removed or sold from the
lease.''
Subsec. (d). Pub. L. 100-203, Sec. 5102(c), amended subsec. (d)
generally. Prior to amendment, subsec. (d) read as follows: ``All leases
issued under this section shall be conditioned upon payment by the
lessee of a rental of not less than 50 cents per acre for each year of
the lease. Each year's lease rental shall be paid in advance. A minimum
royalty of $1 per acre in lieu of rental shall be payable at the
expiration of each lease year beginning on or after a discovery of oil
or gas in paying quantities on the lands leased.''
Subsecs. (f) to (n). Pub. L. 100-203, Sec. 5102(d)(1), added
subsecs. (f) to (h) and redesignated former subsecs. (f) to (k) as (i)
to (n), respectively.
1981--Subsec. (b). Pub. L. 97-78, Sec. 1(6)(a), designated existing
provisions as par. (1) and added par. (2).
Subsec. (c). Pub. L. 97-78, Sec. 1(6)(b), substituted ``subject to
leasing under subsection (b) of this section'' for ``within any known
geological structure of a producing oil or gas field''.
Subsec. (e). Pub. L. 97-78, Sec. 1(6)(c), inserted proviso that
competitive leases in special tar sand areas be for a primary term of
ten years.
Subsec. (k). Pub. L. 97-78, Sec. 1(8), added subsec. (k).
1960--Pub. L. 86-705 generally amended this section and sections
226d and 226e of this title, combining all three sections and
subdividing provisions into subsections (a) to (j) of this section.
Among other changes were: substitution of a fixed 10-year term for a
renewable 5-year term for noncompetitive leases, the addition of subsec.
(h) provisions with respect to the running of time against a lease
during a contest of the claim, an increase in the minimum yearly rentals
from 25 to 50 cents an acre, and striking out provisions that permitted
a waiver of second-year and third-year rentals in certain situations.
Pub. L. 86-507 authorized notice of withdrawal to be given by
certified mail.
1954--Act July 29, 1954, in second par., provided, that no lease
shall terminate for nonproduction (1) if reworking or drilling
operations are begun within 60 days after cessation of production, (2)
if cessation of production is by order or with consent of the Secretary
of the Interior, or (3) unless the lessee is given a reasonable time of
at least 60 days to place a well, capable of producing paying quantities
of oil or gas, on a producing status.
Act July 29, 1954, in third par., made sure that if a lessee
seasonably applies for an extension of the initial five-year term of the
lease he will be given such extension for either 5 years or 2 years,
depending on whether or not the land is in a producing structure.
Act July 29, 1954, in fifth par., provided that the primary term of
a lease which is effected by an agreement under which the United States
received compensatory royalty remains in full force and effect for 1
year following discontinuance of compensatory royalty payments.
1946--Act Aug. 8, 1946, principally substituted, with respect to the
leasing of lands not within a known geological structure of a producing
oil or gas field, a royalty rate of 12\1/2\ per cent without further
provision as to lease terms or quality of production; substituted a
minimum royalty of $1 per acre per annum after discovery for the advance
rental of not less than 25 cents per acre per annum required prior to
discovery; provided that all leases shall be for a primary term of 5
years which shall continue thereafter for so long as oil or gas is
produced in paying quantities, and that leases, with certain exceptions,
shall be subject to one renewal for 5 years, and, if not subject to
renewal, shall extend for an additional 2 years if diligent operations
are in progress at the lease expiration date.
1935--Act Aug. 21, 1935, amended section generally.
1931--Act Mar. 4, 1931, amended section generally.
1930--Act July 3, 1930, amended section generally.
Change of Name
Committee on Natural Resources of House of Representatives treated
as referring to Committee on Resources of House of Representatives by
section 1(a) of Pub. L. 104-14, set out as a note preceding section 21
of Title 2, The Congress.
Effective Date of 1992 Amendment
Section 2507(b) of Pub. L. 102-486 provided that: ``The amendments
made by subsection (a) [amending this section] apply with respect to
those mineral estates in which the interest of the United States becomes
a vested present interest after January 1, 1990.''
Regulations
Section 2508(b) of Pub. L. 102-486 provided that: ``Within 90 days
after the enactment of this Act [Oct. 24, 1992] the Secretary of
Agriculture shall promulgate regulations to implement the amendment made
by subsection (a) [amending this section].''
Section 5107 of Pub. L. 100-203 provided that:
``(a) Regulations.--The Secretary shall issue final regulations to
implement this subtitle [subtitle B (Secs. 5101-5113) of title V of Pub.
L. 100-203, see Short Title of 1987 Amendment note set out under section
181 of this title] within 180 days after the enactment of this subtitle
[Dec. 22, 1987]. The regulations shall be effective when published in
the Federal Register.
``(b) Treatment Under Other Law.--The proposal or promulgation of
such regulations shall not be considered a major Federal action subject
to the requirements of section 102(2)(C) of the National Environmental
Policy Act of 1969 [42 U.S.C. 4332(2)(C)].
``(c) Test Sale.--The Secretary may hold one or more lease sales
conducted in accordance with the amendments made by this subtitle before
promulgation of regulations referred to in subsection (a). Sale
procedures for such sale shall be established in the notice of sale.''
Savings Provision
Section 8 of Pub. L. 86-705 provided that: ``No amendment made by
this Act [see Short Title of 1960 Amendment note set out under section
181 of this title] shall affect any valid right in existence on the
effective date [Sept. 2, 1960] of the Mineral Leasing Act Revision of
1960.''
See note set out under section 181 of this title.
Transfer of Functions
Functions of Secretary of the Interior, referred to in subsec. (j),
to promulgate regulations under this chapter relating to establishment
of diligence requirements for operations conducted on Federal leases,
setting of rates for production of Federal leases, and specifying of
procedures, terms, and conditions for acquisition and disposition of
Federal royalty interests taken in kind, transferred to Secretary of
Energy by section 7152(b) of Title 42, The Public Health and Welfare.
Section 7152(b) of Title 42 was repealed by Pub. L. 97-100, title II,
Sec. 201, Dec. 23, 1981, 95 Stat. 1407, and functions of Secretary of
Energy returned to Secretary of the Interior. See House Report No. 97-
315, pp. 25, 26, Nov. 5, 1981.
Pending Applications, Offers, and Bids
Section 5106 of Pub. L. 100-203 provided that:
``(a) Notwithstanding any other provision of this subtitle [subtitle
B (Secs. 5101-5113) of title V of Pub. L. 100-203, see Short Title of
1987 Amendment note set out under section 181 of this title] and except
as provided in subsection (b) of this section, all noncompetitive oil
and gas lease applications and offers and competitive oil and gas bids
pending on the date of enactment of this subtitle [Dec. 22, 1987] shall
be processed, and leases shall be issued under the provisions of the Act
of February 25, 1920 [this chapter], as in effect before its amendment
by this subtitle, except where the issuance of any such lease would not
be lawful under such provisions or other applicable law.
``(b) No noncompetitive lease applications or offers pending on the
date of enactment of this subtitle for lands within the Shawnee National
Forest, Illinois; the Ouachita National Forest, Arkansas; Fort Chaffee,
Arkansas; or Eglin Air Force Base, Florida; shall be processed until
these lands are posted for competitive bidding in accordance with
section 5102 of this subtitle [amending this section and section 188 of
this title]. If any such tract does not receive a bid equal to or
greater than the national minimum acceptable bid from a responsible
qualified bidder then the noncompetitive applications or offers pending
for such a tract shall be reinstated and noncompetitive leases issued
under the Act of February 25, 1920, as in effect before its amendment by
this subtitle, except where the issuance of any such lease would not be
lawful under such provisions or other applicable law. If competitive
leases are issued for any such tract, then the pending noncompetitive
application or offer shall be rejected.
``(c) Except as provided in subsections (a) and (b) of this section,
all oil and gas leasing pursuant to the Act of February 25, 1920, after
the date of enactment of this subtitle shall be conducted in accordance
with the provisions of this subtitle.''
Report to Congress
Section 5110 of Pub. L. 100-203 provided that: ``The Secretary shall
submit annually for 5 years after enactment of this subtitle [Dec. 22,
1987] to the Congress a report containing appropriate information to
facilitate congressional monitoring of this subtitle [subtitle B
(Secs. 5101-5113) of title V of Pub. L. 100-203, see Short Title of 1987
Amendment note set out under section 181 of this title]. Such report
shall include, but not be limited to--
``(1) the number of acres leased, and the number of leases
issued, competitively and noncompetitively;
``(2) the amount of revenue received from bonus bids, filing
fees, rentals, and royalties;
``(3) the amount of production from competitive and
noncompetitive leases; and
``(4) such other data and information as will facilitate--
``(A) an assessment of the onshore oil and gas leasing
system, and
``(B) a comparison of the system as revised by this subtitle
with the system in operation prior to the enactment of this
subtitle.''
Land Use Study
Section 5111 of Pub. L. 100-203 provided that: ``The National
Academy of Sciences and the Comptroller General of the United States
shall conduct a study of the manner in which oil and gas resources are
considered in the land use plans developed by the Secretary of the
Interior in accordance with provisions of the Federal Land Policy and
Management Act of 1976 (90 Stat. 2743) [Pub. L. 94-579, see Short Title
note under 43 U.S.C. 1701] and the Secretary of Agriculture in
accordance with the Forest and Rangeland Renewable Resources Planning
Act of 1974 (88 Stat. 476) [Pub. L. 93-378, 16 U.S.C. 1600 et seq.], as
amended by the National Forest Management Act of 1976 (90 Stat. 2949)
[Pub. L. 94-588, see Short Title of 1976 Amendment note under 16 U.S.C.
1600], and recommend any improvements that may be necessary to ensure
that--
``(1) potential oil and gas resources are adequately addressed
in planning documents;
``(2) the social, economic, and environmental consequences of
exploration and development of oil and gas resources are determined;
and
``(3) any stipulations to be applied to oil and gas leases are
clearly identified.''
Reinstatement and Extension of Certain Ten-Year Oil and Gas Leases
Act July 14, 1952, ch. 742, 66 Stat. 630, provided: ``That any lease
issued for a ten-year term in exchange for an oil and gas prospecting
permit pursuant to sections 13 and 17 of the Act entitled `An Act to
promote the mining of coal, phosphate, oil, oil shale, gas, and sodium
on the public domain', approved February 25, 1920, as amended by the Act
of August 21, 1935 (49 Stat. 674) [sections 221 and 226, respectively,
of this title], and prior to amendment by the Act of August 8, 1946 [act
Aug. 8, 1946, ch. 916, Sec. 3, 60 Stat. 951], and upon which drilling
operations were being diligently prosecuted on the expiration date of
such lease, prior to the effective date of this Act [July 14, 1952], is
hereby reinstated effective from the expiration date of the lease and
shall continue in effect for a period of two years after the effective
date of this Act and so long thereafter as oil or gas is produced in
paying quantities, if, within ninety days after the enactment of this
Act, payment is made, under the terms of such lease as reinstated and
extended, of any sums due the United States for prior years. This Act
shall not be applicable to any lands which, subsequent to such
expiration and prior to the enactment of this Act, have been withdrawn
from leasing, leased, or otherwise disposed of.''
Outer Continental Shelf; Leases
Grant by Secretary of the Interior of oil, gas, and other mineral
leases on submerged lands of outer Continental Shelf, see section 1331
et seq. of Title 43, Public Lands.
Section Referred to in Other Sections
This section is referred to in sections 181, 188, 223, 236a of this
title; title 10 sections 7421, 7427, 7435.
