SUBCHAPTER IV—OIL AND GAS
§§221 to 222i. Omitted
Editorial Notes
Codification
Sections expired by their own terms. They provided as follows:
Section 221, acts Feb. 25, 1920, ch. 85, §13,
Section 222, act Jan. 11, 1922, ch. 28,
Section 222a, act Apr. 5, 1926, ch. 107, §1,
Section 222b, act Apr. 5, 1926, ch. 107, §2,
Section 222c, act Mar. 9, 1928, ch. 168, §1,
Section 222d, act Mar. 9, 1928, ch. 168, §2,
Section 222e, act Jan. 23, 1930, ch. 25, §1,
Section 222f, act Jan. 23, 1930, ch. 25, §2,
Section 222g, act June 30, 1932, ch. 319, §1,
Section 222h, act June 30, 1932, ch. 319, §2,
Section 222i, acts Aug. 26, 1937, ch. 828,
Statutory Notes and Related Subsidiaries
Compromise of Claims for Accrued Rental
Act July 29, 1942, ch. 534, §2,
§223. Leases; amount and survey of land; term of lease; royalties and annual rental
Upon establishing to the satisfaction of the Secretary of the Interior that valuable deposits of oil or gas have been discovered within the limits of the land embraced in any permit, the permittee shall be entitled to a lease for one-fourth of the land embraced in the prospecting permit: Provided, That the permittee shall be granted a lease for as much as one hundred and sixty acres of said lands, if there be that number of acres within the permit. The area to be selected by the permittee, shall be in reasonably compact form and, if surveyed, to be described by the legal subdivisions of the public-land surveys; if unsurveyed, to be surveyed by the Government at the expense of the applicant for lease in accordance with rules and regulations to be prescribed by the Secretary of the Interior, and the lands leased shall be conformed to and taken in accordance with the legal subdivisions of such surveys; deposits made to cover expense of surveys shall be deemed appropriated for that purpose, and any excess deposits may be repaid to the person or persons making such deposit or their legal representatives. Such leases shall be for a term of twenty years upon a royalty of 5 per centum in amount or value of the production and the annual payment in advance of a rental of $1 per acre, the rental paid for any one year to be credited against the royalties as they accrue for that year, and shall continue in force otherwise as prescribed in
(Feb. 25, 1920, ch. 85, §14,
Editorial Notes
Amendments
1935—Act Aug. 21, 1935, inserted "reasonably" before "compact form" and substituted "and shall continue in force otherwise as prescribed in
Statutory Notes and Related Subsidiaries
Limitation of Royalty on Discoveries During War Period
Act Dec. 24, 1942, ch. 812,
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
§223a. Repealed. Aug. 8, 1946, ch. 916, §14, 60 Stat. 958
Section, act Aug. 21, 1935, ch. 599, §2,
Statutory Notes and Related Subsidiaries
Savings Provision
See note set out under
§224. Payments for oil or gas taken prior to application for lease
Until the permittee shall apply for lease to the one quarter of the permit area heretofore provided for he shall pay to the United States 20 per centum of the gross value of all oil or gas secured by him from the lands embraced within his permit and sold or otherwise disposed of or held by him for sale or other disposition.
(Feb. 25, 1920, ch. 85, §15,
§225. Condition of lease, forfeiture for violation
All leases of lands containing oil or gas, made or issued under the provisions of this chapter, shall be subject to the condition that the lessee will, in conducting his explorations and mining operations, use all reasonable precautions to prevent waste of oil or gas developed in the land, or the entrance of water through wells drilled by him to the oil sands or oil-bearing strata, to the destruction or injury of the oil deposits. Violations of the provisions of this section shall constitute grounds for the forfeiture of the lease, to be enforced as provided in this chapter.
(Feb. 25, 1920, ch. 85, §16,
Editorial Notes
Amendments
1946—Act Aug. 8, 1946, omitted condition that no wells should be drilled within two hundred feet of boundaries of leased lands.
Statutory Notes and Related Subsidiaries
Savings Provision
See note set out under
Outer Continental Shelf; Terms and Conditions of Leases
Terms and conditions of mineral leases on submerged lands of outer Continental Shelf, see
§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 paragraph (2) 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, except as provided in subparagraph (C). 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 162/3 percent in amount or value of the production removed or sold from the lease or, in the case of a lease issued during the 10-year period beginning on August 16, 2022, 162/3 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.
(B) The national minimum acceptable bid shall be $10 per acre during the 10-year period beginning on August 16, 2022. Thereafter, the Secretary, subject to paragraph (2)(B), 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
(C) In order to diversify and expand the Nation's onshore leasing program to ensure the best return to the Federal taxpayer, reduce fraud, and secure the leasing process, the Secretary may conduct onshore lease sales through Internet-based bidding methods. Each individual Internet-based lease sale shall conclude within 7 days.
(2)(A)(i) 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 5,760 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.
(ii) Royalty shall be 162/3 percent in amount or value of production removed or sold from the lease, subject to subsection (k)(1)(c).1
(iii) 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.
(iv) No lease issued under this paragraph shall be included in any chargeability limitation associated with oil and gas leases.
(B) For any area that contains any combination of tar sand and oil or gas (or both), the Secretary may issue under this chapter, separately—
(i) a lease for exploration for and extraction of tar sand; and
(ii) a lease for exploration for and development of oil and gas.
(C) A lease issued for tar sand shall be issued using the same bidding process, annual rental, and posting period as a lease issued for oil and gas, except that the minimum acceptable bid required for a lease issued for tar sand shall be $10 per acre.
(D) The Secretary may waive, suspend, or alter any requirement under
(c) Additional rounds of competitive bidding
Land made available for leasing under subsection (b)(1) for which no bid is accepted or received, or the land for which a lease terminates, expires, is cancelled, or is relinquished, may be made available by the Secretary of the Interior for a new round of competitive bidding under that subsection.
(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 $3 per acre per year during the 2-year period beginning on the date the lease begins for new leases, and after the end of that 2-year period, $5 per acre per year for the following 6-year period, and not less than $15 per acre per year thereafter, or, in the case of a lease issued during the 10-year period beginning on August 16, 2022, $3 per acre per year during the 2-year period beginning on the date the lease begins, and after the end of that 2-year period, $5 per acre per year for the following 6-year period, and $15 per acre per 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) Term of lease
(1) In general
Any lease issued under this section, including a lease for tar sand areas, shall be for a primary term of 10 years.
(2) Continuation of lease
A lease described in paragraph (1) shall continue after the primary term of the lease for any period during which oil or gas is produced in paying quantities.
(3) Additional extensions
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 and diligently prosecuted prior to the end of the primary term of the lease shall be extended for 2 years and for any period thereafter during which 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
(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 162/3 percent in amount or value of the production removed or sold from such leases, except that the royalty rate shall be 162/3 percent 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, 162/3 percent 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 (
(B) This subsection shall only apply in the Allegheny National Forest.
(p) Deadlines for consideration of applications for permits
(1) In general
Not later than 10 days after the date on which the Secretary receives an application for any permit to drill, the Secretary shall—
(A) notify the applicant that the application is complete; or
(B) notify the applicant that information is missing and specify any information that is required to be submitted for the application to be complete.
(2) Issuance or deferral
Not later than 30 days after the applicant for a permit has submitted a complete application, the Secretary shall—
(A) issue the permit, if the requirements under the National Environmental Policy Act of 1969 [
(B) defer the decision on the permit and provide to the applicant a notice—
(i) that specifies any steps that the applicant could take for the permit to be issued; and
(ii) a list of actions that need to be taken by the agency to complete compliance with applicable law together with timelines and deadlines for completing such actions.
(3) Requirements for deferred applications
(A) In general
If the Secretary provides notice under paragraph (2)(B), the applicant shall have a period of 2 years from the date of receipt of the notice in which to complete all requirements specified by the Secretary, including providing information needed for compliance with the National Environmental Policy Act of 1969.
(B) Issuance of decision on permit
If the applicant completes the requirements within the period specified in subparagraph (A), the Secretary shall issue a decision on the permit not later than 10 days after the date of completion of the requirements described in subparagraph (A), unless compliance with the National Environmental Policy Act of 1969 and other applicable law has not been completed within such timeframe.
(C) Denial of permit
If the applicant does not complete the requirements within the period specified in subparagraph (A) or if the applicant does not comply with applicable law, the Secretary shall deny the permit.
(q) Fee for expression of interest
(1) In general
The Secretary shall assess a nonrefundable fee against any person that, in accordance with procedures established by the Secretary to carry out this subsection, submits an expression of interest in leasing land available for disposition under this section for exploration for, and development of, oil or gas.
(2) Amount of fee
(A) In general
Subject to subparagraph (B), the fee assessed under paragraph (1) shall be $5 per acre of the area covered by the applicable expression of interest.
(B) Adjustment of fee
The Secretary shall, by regulation, not less frequently than every 4 years, adjust the amount of the fee under subparagraph (A) to reflect the change in inflation.
(Feb. 25, 1920, ch. 85, §17,
Editorial Notes
References in Text
Act of March 1, 1911, referred to in subsec. (o)(5)(A), is act Mar. 1, 1911, ch. 186,
The Federal Onshore Oil and Gas Leasing Reform Act of 1987, referred to in subsec. (d), is subtitle B (§§5101 to 5113) of title V of
The Combined Hydrocarbon Leasing Act of 1981, referred to in subsec. (n)(2), is
The National Environmental Policy Act of 1969, referred to in subsec. (p)(2)(A), (3)(A), (B), is
Amendments
2022—
Subsec. (b)(1)(A).
Subsec. (b)(1)(B).
Subsec. (b)(2)(C).
Subsec. (b)(3).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (q).
2014—Subsec. (b)(1)(A).
Subsec. (b)(1)(C).
2005—Subsec. (b)(1)(B).
Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (p).
1995—Subsec. (j).
1994—Subsec. (b)(1)(B).
1992—Subsec. (b)(1)(A).
Subsec. (b)(3).
Subsec. (e).
Subsec. (o).
1987—Subsec. (b)(1).
Subsec. (c).
Subsec. (d).
Subsecs. (f) to (n).
1981—Subsec. (b).
Subsec. (c).
Subsec. (e).
Subsec. (k).
1960—
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 12½ 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.
Statutory Notes and Related Subsidiaries
Effective Date of 1992 Amendment
Regulations
"(a)
"(b)
"(c)
Savings Provision
See note set out under
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
Pending Applications, Offers, and Bids
"(a) Notwithstanding any other provision of this subtitle [subtitle B (§§5101–5113) of title V of
"(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
"(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
Land Use Study
"(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,
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
1 So in original. Probably should be subsection "(k)(1)(C).".
§226–1. Extension of noncompetitive oil or gas lease issued before September 2, 1960
(a) Lands not withdrawn from leasing
Upon the expiration of the initial five-year term of any noncompetitive oil or gas lease which was issued prior to September 2, 1960, and which has been maintained in accordance with applicable statutory requirements and regulations, the record titleholder thereof shall be entitled to a single extension of the lease, unless then otherwise provided by law, for such lands covered by it as are not, on the expiration date of the lease, withdrawn from leasing. A withdrawal, however, shall not affect the right to an extension if actual drilling operations on such lands were commenced prior to the effective date of the withdrawal and were being diligently prosecuted on the expiration date of the lease. No withdrawal shall be effective within the meaning of this section until ninety days after notice thereof has been sent by registered or certified mail to each lessee to be affected by such withdrawal.
(b) Known and unknown geologic structures of producing fields
As to lands not within the known geologic structure of a producing oil or gas field, a noncompetitive oil or gas lease to which this section is applicable shall be extended for a period of five years and so long thereafter as oil or gas is produced in paying quantities. As to lands within the known geologic structure of a producing oil or gas field, a noncompetitive lease to which this section is applicable shall be extended for a period of two years and so long thereafter as oil or gas is produced in paying quantities.
(c) Application requirement
Any noncompetitive oil or gas lease extended under this section shall be subject to the rules and regulations in force at the expiration of the initial five-year term of the lease. No extension shall be granted, however, unless within a period of ninety days prior to the expiration date of the lease an application therefor is filed by the record titleholder or an assignee whose assignment has been filed for approval or an operator whose operating agreement has been filed for approval.
(d) Commencement of actual drilling operations
Any lease issued prior to September 2, 1960, which has been maintained in accordance with applicable statutory requirements and regulations and which pertains to 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.
(
Editorial Notes
Codification
Section was enacted as part of Mineral Leasing Act Revision of 1960, and not as part of act Feb. 25, 1920, ch. 85,
§226–2. Limitations for filing oil and gas contests
No action contesting a decision of the Secretary involving any oil and gas lease shall be maintained unless such action is commenced or taken within ninety days after the final decision of the Secretary relating to such matter. No such action contesting such a decision of the Secretary rendered prior to September 2, 1960 shall be maintained unless the same be commenced or taken within ninety days after September 2, 1960.
(Feb. 25, 1920, ch. 85, §42, as added
§226–3. Lands not subject to oil and gas leasing
(a) Prohibition
The Secretary shall not issue any lease under this chapter or under the Geothermal Steam Act of 1970 [
(1) Lands recommended for wilderness allocation by the surface managing agency.
(2) Lands within Bureau of Land Management wilderness study areas.
(3) Lands designated by Congress as wilderness study areas, except where oil and gas leasing is specifically allowed to continue by the statute designating the study area.
(4) Lands within areas allocated for wilderness or further planning in Executive Communication 1504, Ninety-Sixth Congress (House Document numbered 96–119), unless such lands are allocated to uses other than wilderness by a land and resource management plan or have been released to uses other than wilderness by an act of Congress.
(b) Exploration
In the case of any area of National Forest or public lands subject to this section, nothing in this section shall affect any authority of the Secretary of the Interior (or for National Forest Lands reserved from the public domain, the Secretary of Agriculture) to issue permits for exploration for oil and gas, coal, oil shale, phosphate, potassium, sulphur, gilsonite or geothermal resources by means not requiring construction of roads or improvement of existing roads if such activity is conducted in a manner compatible with the preservation of the wilderness environment.
(Feb. 25, 1920, ch. 85, §43, as added
Editorial Notes
References in Text
The Geothermal Steam Act of 1970, referred to in subsec. (a), is
Amendments
1988—Subsec. (a).
Subsec. (b).
§§226a, 226b. Repealed. Aug. 8, 1946, ch. 916, §14, 60 Stat. 958
Section 226a, act July 8, 1940, ch. 548,
Section 226b, acts July 29, 1942, ch. 534, §1,
Statutory Notes and Related Subsidiaries
Savings Provision
See note set out under
§226c. Reduction of royalties under existing leases
From and after August 8, 1946, the royalty obligation to the United States under all leases requiring payment of royalty in excess of 12½ per centum, except leases issued or to be issued upon competitive bidding, is reduced to 12½ per centum in amount or value of production removed or sold from said leases as to (1) such leases, or such part of the lands subject thereto, and the deposits underlying the same, as are not believed to be within the productive limits of any oil or gas deposit, as such productive limits are found by the Secretary to exist 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 unit or cooperative agreement from an oil or gas deposit which was discovered after May 27, 1941, on land committed to such agreement, and which is determined by the Secretary to be a new deposit, where such lease was included in such agreement at the time of discovery, or was included in a duly executed and filed application for the approval of such agreement at the time of discovery.
(Aug. 8, 1946, ch. 916, §12,
Editorial Notes
Codification
Section was not enacted as part of act Feb. 25, 1920, ch. 85,
Statutory Notes and Related Subsidiaries
Savings Provision
See note set out under
Outer Continental Shelf; Refunds on Mineral-Lease Payments
Refunds of excess payments with respect to oil, gas, and other leases on submerged lands of outer Continental Shelf, see
§§226d, 226e. Omitted
Editorial Notes
Codification
Sections were completely amended by
Section 226d, act Feb. 25, 1920, ch. 85, §17a, as added Aug. 8, 1946, ch. 916, §4,
Section 226e, act Feb. 25, 1920, ch. 85, §17b, as added Aug. 8, 1946, ch. 916, §5,
§227. Omitted
Editorial Notes
Codification
Section, acts Feb. 25, 1920, ch. 85, §18,
§228. Prospecting permits and leases to persons of lands not withdrawn; terms and conditions of; fraud of claimants
Any person who on October 1, 1919, was a bona fide occupant or claimant of oil or gas lands under a claim initiated while such lands were not withdrawn from oil or gas location and entry, and who had previously performed all acts under then existing laws necessary to valid locations thereof except to make discovery, and upon which discovery had not been made prior to February 25, 1920, and who has performed work or expended on or for the benefit of such locations an amount equal in the aggregate of $250 for each location if application therefor shall be made within six months from February 25, 1920, shall be entitled to prospecting permits thereon upon the same terms and conditions, and limitations as to acreage, as other permits provided for in this chapter, or where any such person has made such discovery, prior to said February 25, 1920, he shall be entitled to a lease thereon under such terms as the Secretary of the Interior may prescribe unless otherwise provided for in section 227 1 of this title: Provided, That where such prospecting permit is granted upon land within any known geologic structure of a producing oil or gas field, the royalty to be fixed in any lease thereafter granted thereon or any portion thereof shall be not less than 12½ per-centum of all the oil or gas produced except oil or gas used for production purposes on the claim, or unavoidably lost: Provided, however, That the provisions of this section shall not apply to lands reserved for the use of the Navy. No claimant for a permit or lease who has been guilty of any fraud or who had knowledge or reasonable grounds to know of any fraud, or who has not acted honestly and in good faith shall be entitled to any of the benefits of this section.
All permits or leases hereunder shall inure to the benefit of the claimant and all persons claiming through or under him by lease, contract, or otherwise, as their interests may appear.
(Feb. 25, 1920, ch. 85, §19,
Editorial Notes
References in Text
1 See References in Text note below.
§229. Preference right to permits or leases of claimants of lands bona fide entered as agricultural land; terms and conditions
In the case of lands bona fide entered as agricultural, and not withdrawn or classified as mineral at the time of entry, but not including lands claimed under any railroad grant, the entryman or patentee, or assigns, where assignment was made prior to January 1, 1918, if the entry has been patented with the mineral right reserved, shall be entitled to a preference right to a permit and to a lease, as herein provided, in case of discovery; and within an area not greater than a township such entryman and patentees, or assigns holding restricted patents may combine their holdings, not to exceed two thousand five hundred and sixty acres for the purpose of making joint application. Leases executed under this section and embracing only lands so entered shall provide for the payment of a royalty of not less than 12½ per centum as to such areas within the permit as may not be included within the discovery lease to which the permittee is entitled under
(Feb. 25, 1920, ch. 85, §20,
§229a. Water struck while drilling for oil and gas
(a) Acquisition; condition in lease
All prospecting permits and leases for oil or gas made or issued under the provisions of this chapter shall be subject to the condition that in case the permittee or lessee strikes water while drilling instead of oil or gas, the Secretary of the Interior may, when such water is of such quality and quantity as to be valuable and usable at a reasonable cost for agricultural, domestic, or other purposes, purchase the casing in the well at the reasonable value thereof to be fixed under rules and regulations to be prescribed by the Secretary.
(b) Prior leases
In cases where water wells producing such water have heretofore been or may hereafter be drilled upon lands embraced in any prospecting permit or lease heretofore issued under this chapter, the Secretary may in like manner purchase the casing in such wells.
(c) Disposition
The Secretary may make such purchase and may lease or operate such wells for the purpose of producing water and of using the same on the public lands or of disposing of such water for beneficial use on other lands, and where such wells have heretofore been plugged or abandoned or where such wells have been drilled prior to the issuance of any permit or lease by persons not in privity with the permittee or lessee, the Secretary may develop the same for the purposes of this section: Provided, That owners or occupants of lands adjacent to those upon which such water wells may be developed shall have a preference right to make beneficial use of such water.
(d) Revolving fund
The Secretary may use so much of any funds available for the plugging of wells, as he may find necessary to start the program provided for by this section, and thereafter he may use the proceeds from the sale or other disposition of such water as a revolving fund for the continuation of such program, and such proceeds are hereby appropriated for such purpose.
(e) Operations under lease not restricted
Nothing in this section shall be construed to restrict operations under any oil or gas lease or permit under any other provision of this chapter.
(Feb. 25, 1920, ch. 85, §40, as added June 16, 1934, ch. 557,
Editorial Notes
Amendments
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Savings Provision
Amendment by
§§230 to 233. Repealed. June 22, 1948, ch. 605, §3, 62 Stat. 576
Section 230, act Mar. 4, 1923, ch. 249, §1,
Section 231, act Mar. 4, 1923, ch. 249, §2,
Section 232, act Mar. 4, 1923, ch. 249, §3,
Section 233, act Mar. 4, 1923, ch. 249, §4,
Statutory Notes and Related Subsidiaries
Savings Provision
Act June 22, 1948, ch. 605, §3,
§233a. Permits or leases of certain lands in Oklahoma; retention of royalties
The Secretary of the Interior is directed to retain in his custody until otherwise directed by law the 12½ per centum and other royalties heretofore or hereafter received by him in pursuance of section 233 1 of this title.
(Mar. 4, 1925, ch. 550, §2,
Editorial Notes
References in Text
Codification
Section was not enacted as part of act Feb. 25, 1920, ch. 85,
1 See References in Text note below.
§§234 to 236. Repealed. June 22, 1948, ch. 605, §3, 62 Stat. 576
Section 234, act Mar. 4, 1923, ch. 249, §5,
Section 235, act Mar. 4, 1923, ch. 249, §6,
Section 236, act Mar. 4, 1923, ch. 249, §7,
Statutory Notes and Related Subsidiaries
Savings Provision
Act June 22, 1948, ch. 605, §3,
§236a. Lands in naval petroleum reserves and naval oil-shale reserves; effect of other laws
Nothing in sections 185, 221,1 223, 223a,1 and 226 of this title and this section shall be construed as affecting any lands within the borders of the naval petroleum reserves and naval oil-shale reserves or agreements concerning operations thereunder or in relation to the same, but the Secretary of the Navy is hereby authorized, with the consent of the President, to enter into agreements such as those provided for under
(Aug. 21, 1935, ch. 599, §3,
Editorial Notes
References in Text
Codification
Section was not enacted as part of act Feb. 25, 1920, ch. 85,
1 See References in Text note below.
§236b. Existing leases within naval petroleum reserves not affected
Nothing in this act shall be construed as affecting existing leases within the borders of the naval petroleum reserves, or agreements concerning operations thereunder or in relation thereto.
(Aug. 8, 1946, ch. 916, §13,
Editorial Notes
References in Text
This act, referred to in text, is act Aug. 8, 1946, ch. 916,
Codification
Section was not enacted as part of act Feb. 25, 1920, ch. 85,
Amendments
1956—Act Aug. 10, 1956, repealed the portion of this section after "thereto" which authorized the Secretary of the Navy, with the consent of the President, to enter into agreements such as those provided for in
§237. Omitted
Editorial Notes
Codification
Section,