Subchapter IV of the Mineral Leasing Act

TITLE 30—MINERAL LANDS AND MINING

§§ 221 to 222i

convenient for the extraction’’ for ‘‘Any qualified applicant to whom the Secretary of the Interior may
grant a lease to develop and extract phosphates, or
phosphate rock, under the provisions of this chapter’’,
‘‘lands’’, and ‘‘for the proper prospecting for or development, extraction’’, respectively.

SUBCHAPTER IV—OIL AND GAS
§§ 221 to 222i. Omitted
CODIFICATION
Sections expired by their own terms. They provided
as follows:
Section 221, acts Feb. 25, 1920, ch. 85, § 13, 41 Stat. 441;
Aug. 21, 1935, ch. 599, § 1, 49 Stat. 674, provided for prospecting permits, their terms and conditions, extension,
location of lands, marking land, notice of application
for permits, permits in Alaska, exchanging permits for
leases, and limited extensions to Dec. 31, 1938.
Section 222, act Jan. 11, 1922, ch. 28, 42 Stat. 356, authorized Secretary of the Interior to extend time for
drilling not to exceed three years.
Section 222a, act Apr. 5, 1926, ch. 107, § 1, 44 Stat. 236,
authorized a further extension of two years for drilling.
Section 222b, act Apr. 5, 1926, ch. 107, § 2, 44 Stat. 236,
provided for extension of expired permits for a period of
two years from Apr. 5, 1926.
Section 222c, act Mar. 9, 1928, ch. 168, § 1, 45 Stat. 252,
authorized a two year extension for permits.
Section 222d, act Mar. 9, 1928, ch. 168, § 2, 45 Stat. 252,
authorized a two year extension of permits already expired.
Section 222e, act Jan. 23, 1930, ch. 25, § 1, 46 Stat. 58,
provided that permits issued or extended for three
years might be further for three years.
Section 222f, act Jan. 23, 1930, ch. 25, § 2, 46 Stat. 59,
provided for an extension of permits already expired for
a period of three years from Jan. 23, 1930.
Section 222g, act June 30, 1932, ch. 319, § 1, 47 Stat. 445,
provided for a further extension of three years.
Section 222h, act June 30, 1932, ch. 319, § 2, 47 Stat. 446,
authorized an extension, for permits already expired, of
three years from June 30, 1932.
Section 222i, acts Aug. 26, 1937, ch. 828, 50 Stat. 842;
Aug. 11, 1939, ch. 716, 53 Stat. 1418, provided for final extension of prospecting permits, outstanding on Dec. 31,
1937, to Dec. 31, 1939.
COMPROMISE OF CLAIMS FOR ACCRUED RENTAL
Act July 29, 1942, ch. 534, § 2, 56 Stat. 726, authorized
Secretary of the Interior to make a compromise settlement of any claim for accrued rental under a lease issued pursuant to the provisions of section 221 of this
title, in any case in which he determined that it would
be financially beneficial to the United States to make
such a compromise settlement or in any case in which
he determined that collection of the full amount of
such accrued rental from the lessee was inadvisable because of the lessee’s financial resources being limited.

§ 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 onefourth 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 Gov-

Page 68

ernment 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 section 226 of this
title for leases issued prior to August 21, 1935.
The permittee shall also be entitled to a preference right to a lease for the remainder of the
land in his prospecting permit at a royalty of
not less than 121⁄2 per centum in amount or value
of the production nor more than the royalty
rate prescribed by regulation in force on January 1, 1935, for secondary leases issued under this
section, and under such other conditions as are
fixed for oil or gas leases issued under section
226 of this title the royalty to be determined by
competitive bidding or fixed by such other
method as the Secretary may by regulations
prescribe: Provided further, That the Secretary
shall have the right to reject any or all bids.
(Feb. 25, 1920, ch. 85, § 14, 41 Stat. 442; Aug. 21,
1935, ch. 599, § 1, 49 Stat. 676.)
AMENDMENTS
1935—Act Aug. 21, 1935, inserted ‘‘reasonably’’ before
‘‘compact form’’ and substituted ‘‘and shall continue in
force otherwise as prescribed in section 226 of this title
for leases issued prior to August 21, 1935’’ and ‘‘oil or
gas leases issued under section 226 of this title’’ for
‘‘with the right of renewal as prescribed in section 226
of this title’’ and ‘‘oil or gas leases in this chapter’’, respectively.
LIMITATION OF ROYALTY ON DISCOVERIES DURING WAR
PERIOD
Act Dec. 24, 1942, ch. 812, 56 Stat. 1080, limiting royalty obligation of oil or gas lessee who drills well resulting in discovery of new deposit on public domain
during the national emergency was repealed by Joint
Res. July 25, 1947, ch. 327, § 1, 61 Stat. 449.
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.

§ 223a. Repealed. Aug. 8, 1946, ch. 916, § 14, 60
Stat. 958
Section, act Aug. 21, 1935, ch. 599, § 2, 49 Stat. 679, related to new oil and gas leases in lieu of old.
SAVINGS PROVISION
See note set out under section 181 of this title.

§ 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

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TITLE 30—MINERAL LANDS AND MINING

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, 41 Stat. 442.)
§ 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, 41 Stat. 443; Aug. 8,
1946, ch. 916, § 2, 60 Stat. 951.)
AMENDMENTS
1946—Act Aug. 8, 1946, omitted condition that no
wells should be drilled within two hundred feet of
boundaries of leased lands.
SAVINGS PROVISION
See note set out under section 181 of this title.
OUTER CONTINENTAL SHELF; TERMS AND CONDITIONS OF
LEASES
Terms and conditions of mineral leases on submerged
lands of outer Continental Shelf, see section 1337 of
Title 43, Public Lands.

§ 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 bid-

§ 226

der 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,
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 section 4332(2)(C) of title
42.
(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 121⁄2 per centum in
amount or value of production removed or sold
from the lease, subject to subsection (k)(1)(c) 1 of
this section.
(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 $2
per acre.
(D) The Secretary may waive, suspend, or
alter any requirement under section 183 of this
title that a permittee under a permit authorizing prospecting for tar sand must exercise due
1 So

in original. Probably should be subsection ‘‘(k)(1)(C)’’.

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TITLE 30—MINERAL LANDS AND MINING

diligence, to promote any resource covered by a
combined hydrocarbon lease.
(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 ap-

Page 70

plication 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

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TITLE 30—MINERAL LANDS AND MINING

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

§ 226

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 121⁄2 per
centum in amount or value of the production removed or sold from such leases, except that the
royalty rate shall be 121⁄2 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

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TITLE 30—MINERAL LANDS AND MINING

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

Page 72

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

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TITLE 30—MINERAL LANDS AND MINING

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, 121⁄2 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

§ 226

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.
(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.

§ 226

TITLE 30—MINERAL LANDS AND MINING

(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 [42 U.S.C. 4321 et seq.] and other
applicable law have been completed within
such timeframe; or
(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.
(Feb. 25, 1920, ch. 85, § 17, 41 Stat. 443; July 3,
1930, ch. 854, § 1, 46 Stat. 1007; Mar. 4, 1931, ch. 506,
46 Stat. 1523; Aug. 21, 1935, ch. 599, § 1, 49 Stat.
676; Aug. 8, 1946, ch. 916, § 3, 60 Stat. 951; July 29,
1954, ch. 644, § 1(1)–(3), 68 Stat. 583; Pub. L. 86–507,
§ 1(21), June 11, 1960, 74 Stat. 201; Pub. L. 86–705,
§ 2, Sept. 2, 1960, 74 Stat. 781; Pub. L. 97–78, § 1(6),
(8), Nov. 16, 1981, 95 Stat. 1070, 1071; Pub. L.
100–203, title V, § 5102(a)–(d)(1), Dec. 22, 1987, 101
Stat. 1330–256, 1330–257; Pub. L. 102–486, title
XXV, §§ 2507(a), 2508(a), 2509, Oct. 24, 1992, 106
Stat. 3107–3109; Pub. L. 103–437, § 11(a)(1), Nov. 2,
1994, 108 Stat. 4589; Pub. L. 104–66, title I,
§ 1081(a), Dec. 21, 1995, 109 Stat. 721; Pub. L.
109–58, title III, §§ 350(a), (b), 366, 369(j)(1), Aug. 8,
2005, 119 Stat. 711, 726, 730.)
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

Page 74

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 (§§ 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.
The National Environmental Policy Act of 1969, referred to in subsec. (p)(2)(A), (3)(A), (B), is Pub. L.
91–190, Jan. 1, 1970, 83 Stat. 852, as amended, which is
classified generally to chapter 55 (§ 4321 et seq.) of Title
42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note
set out under section 4321 of Title 42 and Tables.
AMENDMENTS
2005—Subsec. (b)(1)(B). Pub. L. 109–58, § 350(b), inserted
‘‘, subject to paragraph (2)(B),’’ after ‘‘Thereafter, the
Secretary’’.
Subsec. (b)(2). Pub. L. 109–58, § 350(a), designated existing provisions as subpar. (A) and added subpars. (B)
to (D).
Subsec. (b)(2)(A). Pub. L. 109–58, § 369(j)(1), designated
first sentence as cl. (i), substituted ‘‘5,760’’ for ‘‘five
thousand one hundred and twenty’’, designated second
and third sentences as cls. (ii) and (iii), respectively,
and added cl. (iv).
Subsec. (p). Pub. L. 109–58, § 366, added subsec. (p).
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, § 2507(a)(1),
substituted ‘‘under paragraphs (2) and (3)’’ for ‘‘under
paragraph (2)’’.
Subsec. (b)(3). Pub. L. 102–486, § 2507(a)(2), added par.
(3).
Subsec. (e). Pub. L. 102–486, § 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, § 2508(a), added subsec. (o).
1987—Subsec. (b)(1). Pub. L. 100–203, § 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
121⁄2 per centum in amount or value of the production
removed or sold from the lease.’’
Subsec. (c). Pub. L. 100–203, § 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

Page 75

TITLE 30—MINERAL LANDS AND MINING

lessee of a royalty of 121⁄2 per centum in amount or
value of the production removed or sold from the
lease.’’
Subsec. (d). Pub. L. 100–203, § 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, § 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, § 1(6)(a), designated
existing provisions as par. (1) and added par. (2).
Subsec. (c). Pub. L. 97–78, § 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, § 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, § 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 121⁄2 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.
EFFECTIVE DATE OF 1992 AMENDMENT
Section 2507(b) of Pub. L. 102–486 provided that: ‘‘The
amendments made by subsection (a) [amending this

§ 226

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
Pub. L. 109–58, title III, § 350(c), Aug. 8, 2005, 119 Stat.
711, provided that: ‘‘Not later than 45 days after the
date of enactment of this Act [Aug. 8, 2005], the Secretary [of the Interior] shall issue final regulations to
implement this section [amending this section].’’
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
(§§ 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, § 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 (§§ 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 proc-

§ 226–1

TITLE 30—MINERAL LANDS AND MINING

essed 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
(§§ 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

Page 76

prior to amendment by the Act of August 8, 1946 [act
Aug. 8, 1946, ch. 916, § 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.

§ 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.

Page 77

TITLE 30—MINERAL LANDS AND MINING

(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.
(Pub. L. 86–705, § 4, Sept. 2, 1960, 74 Stat. 789.)
CODIFICATION
Section was enacted as part of Mineral Leasing Act
Revision of 1960, and not as part of act Feb. 25, 1920, ch.
85, 41 Stat. 437, known as the Mineral Leasing Act,
which comprises this chapter.

§ 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 Pub. L. 86–705,
§ 5, Sept. 2, 1960, 74 Stat. 790.)
§ 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 [30 U.S.C. 1001 et seq.] on any of the following Federal lands:
(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.

§ 226c

(Feb. 25, 1920, ch. 85, § 43, as added Pub. L.
100–203, title V, § 5112, Dec. 22, 1987, 101 Stat.
1330–262; amended Pub. L. 100–443, § 5(c), Sept. 22,
1988, 102 Stat. 1768.)
REFERENCES IN TEXT
The Geothermal Steam Act of 1970, referred to in subsec. (a), is Pub. L. 91–581, Dec. 24, 1970, 84 Stat. 1566,
which is classified principally to chapter 23 (§ 1001 et
seq.) of this title. For complete classification of this
Act to the Code, see Short Title note set out under section 1001 of this title and Tables.
AMENDMENTS
1988—Subsec. (a). Pub. L. 100–443, § 5(c)(1), inserted ‘‘or
under the Geothermal Steam Act of 1970’’ after ‘‘under
this chapter’’ and directed that ‘‘oil and gas’’ be stricken which was executed by striking those words where
they appeared after ‘‘not issue any’’ in introductory
provisions, but not where they appeared in par. (3) as
the probable intent of Congress.
Subsec. (b). Pub. L. 100–443, § 5(c)(2), inserted ‘‘, coal,
oil shale, phosphate, potassium, sulphur, gilsonite or
geothermal resources’’ after ‘‘oil and gas’’.

§§ 226a, 226b. Repealed. Aug. 8, 1946, ch. 916, § 14,
60 Stat. 958
Section 226a, act July 8, 1940, ch. 548, 54 Stat. 742, related to lease of lands not within known productive
field. See section 226 of this title.
Section 226b, acts July 29, 1942, ch. 534, § 1, 56 Stat.
726; Dec. 22, 1943, ch. 376, 57 Stat. 608; Sept. 27, 1944, ch.
429, 58 Stat. 755; Nov. 30, 1945, ch. 495, 59 Stat. 587, related to preference right to new oil and gas lease upon expiration of five-year non-competitive oil and gas lease.
See section 226 of this title.
SAVINGS PROVISION
See note set out under section 181 of this title.

§ 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 121⁄2 per
centum, except leases issued or to be issued
upon competitive bidding, is reduced to 121⁄2 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, 60 Stat. 957.)
CODIFICATION
Section was not enacted as part of act Feb. 25, 1920,
ch. 85, 41 Stat. 437, known as the Mineral Leasing Act,
which comprises this chapter.

TITLE 30—MINERAL LANDS AND MINING

§§ 226d, 226e

SAVINGS PROVISION
See note set out under section 181 of this title.
OUTER CONTINENTAL SHELF; REFUNDS ON MINERALLEASE PAYMENTS
Refunds of excess payments with respect to oil, gas,
and other leases on submerged lands of outer Continental Shelf, see section 1339 of Title 43, Public Lands.

§§ 226d, 226e. Omitted
CODIFICATION
Sections were completely amended by Pub. L. 86–705,
§ 2, Sept. 2, 1960, 74 Stat. 781, and included in section 17
of Mineral Leasing Act of Feb. 25, 1920, classified to section 226 of this title.
Section 226d, act Feb. 25, 1920, ch. 85, § 17a, as added
Aug. 8, 1946, ch. 916, § 4, 60 Stat. 952, provided for the exchange of leases and fixed royalty rates for new leases.
Section 226e, act Feb. 25, 1920, ch. 85, § 17b, as added
Aug. 8, 1946, ch. 916, § 5, 60 Stat. 952; amended July 29,
1954, ch. 644, § 1(4), (5), 68 Stat. 585, permitted establishment of cooperative or unit plans, setting up procedures for regulating production, approving contracts
and preventing waste.

§ 227. Omitted
CODIFICATION
Section, acts Feb. 25, 1920, ch. 85, § 18, 41 Stat. 443;
Feb. 25, 1928, ch. 104, 45 Stat. 148, authorized the United
States to issue leases for a period of twenty years to
persons who relinquished all rights claimed or possessed prior to July 3, 1910 under preexisting placer
mining law provided relinquishment was filed in the
General Land Office within six months after Feb. 25,
1920.

§ 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 121⁄2
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
1 See

References in Text note below.

Page 78

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, 41 Stat. 445.)
REFERENCES IN TEXT
Section 227 of this title, referred to in text, was omitted from the Code.

§ 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 121⁄2 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 section 223 of this title.
(Feb. 25, 1920, ch. 85, § 20, 41 Stat. 445.)
§ 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

Page 79

TITLE 30—MINERAL LANDS AND MINING

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, 48 Stat. 977; amended Pub. L. 94–579, title
VII, § 704(a), Oct. 21, 1976, 90 Stat. 2792.)
AMENDMENTS
1976—Subsec. (a). Pub. L. 94–579 struck out proviso relating to reservation of land as a water hole under section 300 of title 43.
EFFECTIVE DATE OF 1976 AMENDMENT
Section 704(a) of Pub. L. 94–579 provided that the
amendment made by that section is effective on and
after Oct. 21, 1976.
SAVINGS PROVISION
Amendment by Pub. L. 94–579 not to be construed as
terminating any valid lease, permit, patent, etc., existing on Oct. 21, 1976, see section 701 of Pub. L. 94–579, set
out as a note under section 1701 of Title 43, Public
Lands.

§§ 230 to 233. Repealed. June 22, 1948, ch. 605, § 3,
62 Stat. 576
Section 230, act Mar. 4, 1923, ch. 249, § 1, 42 Stat. 1448,
authorized permits and leases for certain United States
citizens and corporations in Oklahoma.
Section 231, act Mar. 4, 1923, ch. 249, § 2, 42 Stat. 1448,
required applications for permits and leases to be made
not later than sixty days after Mar. 4, 1923.
Section 232, act Mar. 4, 1923, ch. 249, § 3, 42 Stat. 1448,
limited amount of land any one person or corporation
could be granted.
Section 233, act Mar. 4, 1923, ch. 249, § 4, 42 Stat. 1448,
provided for payment of royalties to United States.
SAVINGS PROVISION
Section 3 of act June 22, 1948, provided that the repeal
of these sections is subject to existing valid rights.

§ 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 121⁄2 per centum and other royalties
heretofore or hereafter received by him in pursuance of section 233 1 of this title.
1 See

References in Text note below.

§ 236b

(Mar. 4, 1925, ch. 550, § 2, 43 Stat. 1302.)
REFERENCES IN TEXT
Section 233 of this title, referred to in text, was repealed by act June 22, 1948, ch. 605, § 3, 62 Stat. 576.
CODIFICATION
Section was not enacted as part of act Feb. 25, 1920,
ch. 85, 41 Stat. 437, known as the Mineral Leasing Act,
which comprises this chapter.

§§ 234 to 236. Repealed. June 22, 1948, ch. 605, § 3,
62 Stat. 576
Section 234, act Mar. 4, 1923, ch. 249, § 5, 42 Stat. 1449,
provided for application of other laws to leases and permits granted under sections 230 to 233 and 234 to 236 of
this title, and for disposition of lands and deposits remaining unappropriated and undisposed of.
Section 235, act Mar. 4, 1923, ch. 249, § 6, 42 Stat. 1449,
prohibited interference with certain lands in possession
of receivers appointed by the Supreme Court.
Section 236, act Mar. 4, 1923, ch. 249, § 7, 42 Stat. 1450,
authorized promulgation of rules and regulations necessary to accomplish purposes of sections 230 to 233 and
234 to 236 of this title.
SAVINGS PROVISION
Section 3 of act June 22, 1948, provided that the repeal
of these sections is subject to existing valid rights.

§ 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 sections 184 and 226 of this title, which agreement
shall not, unless expressed therein, operate to
extend the terms of any lease affected thereby.
(Aug. 21, 1935, ch. 599, § 3, 49 Stat. 679.)
REFERENCES IN TEXT
Section 221 of this title, referred to in text, was omitted from the Code.
Section 223a of this title, referred to in text, was repealed by act Aug. 8, 1946, ch. 916, § 14, 60 Stat. 958.
CODIFICATION
Section was not enacted as part of act Feb. 25, 1920,
ch. 85, 41 Stat. 437, known as the Mineral Leasing Act,
which comprises this chapter.

§ 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, 60 Stat. 958; Aug. 10,
1956, ch. 1041, § 53, 70A Stat. 675.)
REFERENCES IN TEXT
This act, referred to in text, is act Aug. 8, 1946, ch.
916, 60 Stat. 950, as amended, which is classified gener1 See

References in Text note below.

TITLE 30—MINERAL LANDS AND MINING

§ 237

ally to sections 181, 184, 187a, 187b, 188, 193, 209, 225, 226,
226c to 226e, 236b, and 285 of this title. For complete
classification of this Act to the Code, see Tables.
CODIFICATION
Section was not enacted as part of act Feb. 25, 1920,
ch. 85, 41 Stat. 437, known as the Mineral Leasing Act,
which comprises this chapter.
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 section
236e of this title, which agreements, should not, unless
expressed therein, operate to extend the term of any
lease affected thereby.

§ 237. Omitted
CODIFICATION
Section, Pub. L. 95–372, title VI, § 602, Sept. 18, 1978, 92
Stat. 694, which required the Secretary of the Interior
to submit annual reports to Congress on delinquent
royalty accounts under leases issued under any Act
regulating development of oil and gas on Federal lands,
terminated, effective May 15, 2000, pursuant to section
3003 of Pub. L. 104–66, as amended, set out as a note
under section 1113 of Title 31, Money and Finance. See,
also, page 111 of House Document No. 103–7.

SUBCHAPTER V—OIL SHALE
§ 241. Leases of lands
(a) In general
(1) The Secretary of the Interior is hereby authorized to lease to any person or corporation
qualified under this chapter any deposits of oil
shale, and gilsonite (including all vein-type
solid hydrocarbons) belonging to the United
States and the surface of so much of the public
lands containing such deposits, or land adjacent
thereto, as may be required for the extraction
and reduction of the leased minerals, under such
rules and regulations, not inconsistent with this
chapter, as he may prescribe.
(2) No lease hereunder shall exceed 5,760 acres
of land, to be described by the legal subdivisions
of the public-land surveys, or if unsurveyed, to
be surveyed by the United States, at the expense
of the applicant, in accordance with regulations
to be prescribed by the Secretary of the Interior.
(3) Leases may be for indeterminate periods,
upon such conditions as may be imposed by the
Secretary of the Interior, including covenants
relative to methods of mining, prevention of
waste, and productive development.
(4) For the privilege of mining, extracting, and
disposing of the oil or other minerals covered by
a lease under this section the lessee shall pay to
the United States such royalties as shall be
specified in the lease and an annual rental, payable at the beginning of each year, at the rate of
$2.00 per acre per annum, for the lands included
in the lease, the rental paid for any one year to
be credited against the royalties accruing for
that year; such royalties to be subject to readjustment at the end of each twenty-year period
by the Secretary of the Interior. For the purpose
of encouraging the production of petroleum
products from shales the Secretary may, in his
discretion, waive the payment of any royalty
and rental during the first five years of any

Page 80

lease. Any person having a valid claim to such
minerals under existing laws on January 1, 1919,
shall, upon the relinquishment of such claim, be
entitled to a lease under the provisions of this
section for such area of the land relinquished as
shall not exceed the maximum area authorized
by this section to be leased to an individual or
corporation. No claimant for a 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. No one person, association, or corporation shall acquire or hold more than 50,000 acres
of oil shale leases in any one State. For gilsonite (including all vein-type solid hydrocarbons)
no person, association, or corporation shall acquire or hold more than seven thousand six hundred eighty acres in any one State without respect to the number of leases.
(5) No lease issued under this section shall be
included in any chargeability limitation associated with oil and gas leases.
(b) Offer for lease; deposits other than oil shale;
questioned validity because of location; preference rights
If an offer for a lease under the provisions of
this section for deposits other than oil shale is
based upon a mineral location, the validity of
which might be questioned because the claim
was based on a placer location rather than on a
lode location, or vice versa, the offeror shall
have a preference right to a lease if the offer is
filed not more than one year after September 2,
1960.
(c) 1 Multiple use principal leases; gilsonite including all vein-type solid hydrocarbons
With respect to gilsonite (including all veintype solid hydrocarbons) a lease under the multiple use principle may issue notwithstanding
the existence of an outstanding lease issued
under any other provision of this chapter.
(c) 1 Offsite leases
(1) The Secretary may within the State of Colorado lease to the holder of the Federal oil shale
lease known as Federal Prototype Tract C–a additional lands necessary for the disposal of oil
shale wastes and the materials removed from
mined lands, and for the building of plants, reduction works, and other facilities connected
with oil shale operations (which lease shall be
referred to hereinafter as an ‘‘offsite lease’’).
The Secretary may only issue one offsite lease
not to exceed six thousand four hundred acres.
An offsite lease may not serve more than one
Federal oil shale lease and may not be transferred except in conjunction with the transfer of
the Federal oil shale lease that it serves.
(2) The Secretary may issue one offsite lease
of not more than three hundred and twenty
acres to any person, association or corporation
which has the right to develop oil shale on nonFederal lands. An offsite lease serving non-Federal oil shale land may not serve more than one
oil shale operation and may not be transferred
except in conjunction with the transfer of the
non-Federal oil shale land that it serves. Not
1 Two

subsecs. (c) have been enacted.