43 U.s.c 1353

Section 1353. Federal purchase and disposition of oil and gas

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Laws: Cases and Codes : U.S. Code : Title 43 : Section 1353
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Title 43

United States Code
{ TITLE 43 - PUBLIC LANDS
„ CHAPTER 29 - SUBMERGED LANDS
„ SUBCHAPTER III - OUTER CONTINENTAL SHELF LANDS
U.S. Code as of: 01/22/02

Section 1353. Federal purchase and disposition of oil and gas
(a) Payment of royalties or net profit shares in oil and gas;
purchase of oil and gas by United States; transfer of title to
Federal agencies
(1) Except as may be necessary to comply with the provisions of
sections 1335 and 1336 of this title, all royalties or net profit
shares, or both, accruing to the United States under any oil and
gas lease issued or maintained in accordance with this subchapter,
shall, on demand of the Secretary, be paid in oil or gas.
(2) The United States shall have the right to purchase not to
exceed 16 2/3 per centum by volume of the oil and gas produced
pursuant to a lease issued or maintained in accordance with this
subchapter, at the regulated price, or, if no regulated price
applies, at the fair market value at the well head of the oil and
gas saved, removed, or sold, except that any oil or gas obtained by
the United States as royalty or net profit share shall be credited
against the amount that may be purchased under this subsection.
(3) Title to any royalty, net profit share, or purchased oil or
gas may be transferred, upon request, by the Secretary to the
Secretary of Defense, to the Administrator of the General Services
Administration, or to the Secretary of Energy, for disposal within
the Federal Government.
(b) Sale of oil by United States to public; disposition of oil to
small refiners; application of other laws
(1) The Secretary, except as provided in this subsection, may
offer to the public and sell by competitive bidding for not more
than its regulated price, or, if no regulated price applies, not
less than its fair market value, any part of the oil (A) obtained
by the United States pursuant to any lease as royalty or net profit
share, or (B) purchased by the United States pursuant to subsection
(a)(2) of this section.
(2) Whenever, after consultation with the Secretary of Energy,
the Secretary determines that small refiners do not have access to
adequate supplies of oil at equitable prices, the Secretary may
dispose of any oil which is taken as a royalty or net profit share
accruing or reserved to the United States pursuant to any lease
issued or maintained under this subchapter, or purchased by the
United States pursuant to subsection (a)(2) of this section, by
conducting a lottery for the sale of such oil, or may equitably
allocate such oil among the competitors for the purchase of such
oil, at the regulated price, or if no regulated price applies, at
its fair market value. The Secretary shall limit participation in
any allocation or lottery sale to assure such access and shall
publish notice of such allocation or sale, and the terms thereof,
at least thirty days in advance. Such notice shall include
qualifications for participation, the amount of oil to be sold, and
any limitation in the amount of oil which any participant may be
entitled to purchase.
(3) The Secretary may only sell or otherwise dispose of oil

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Section 1353. Federal purchase and disposition of oil and gas

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described in paragraph (1) of this subsection in accordance with
any provision of law, or regulations issued in accordance with such
provisions, which provide for the Secretary of Energy to allocate,
transfer, exchange, or sell oil in amounts or at prices determined
by such provision of law or regulations.
(c) Sale of gas by United States to public
(1) Except as provided in paragraph (2) of this subsection, the
Secretary, pursuant to such terms as he determines, many (FOOTNOTE
1) offer to the public and sell by competitive bidding for not more
than its regulated price, or, if no regulated price applies, not
less than its fair market value any part of the gas (A) obtained by
the United States pursuant to a lease as royalty or net profit
share, or (B) purchased by the United States pursuant to subsection
(a)(2) of this section.
(FOOTNOTE 1) So in original. Probably should be ''may''.
(2) Whenever, after consultation with and advice from the
Secretary of Energy, the Federal Energy Regulatory Commission
determines that an emergency shortage of natural gas is threatening
to cause severe economic or social dislocation in any region of the
United States and that such region can be serviced in a practical,
feasible, and efficient manner by royalty, net profit share, or
purchased gas obtained pursuant to the provisions of this section,
the Secretary of the Interior may allocate or conduct a lottery for
the sale of such gas, and shall limit participation in any
allocation or lottery sale of such gas to any person servicing such
region, but he shall not sell any such gas for more than its
regulated price, or, if no regulated price applies, less than its
fair market value. Prior to selling or allocating any gas pursuant
to this subsection, the Secretary shall consult with the Federal
Energy Regulatory Commission.
(d) Purchase by lessee of Federal oil or gas for which no bids
received
The lessee shall take any Federal oil or gas for which no
acceptable bids are received, as determined by the Secretary, and
which is not transferred pursuant to subsection (a)(3) of this
section, and shall pay to the United States a cash amount equal to
the regulated price, or, if no regulated price applies, the fair
market value of the oil or gas so obtained.
(e) Definitions
As used in this section (1) the term ''regulated price'' means the highest price (A) at which oil many (FOOTNOTE 2) be sold pursuant to the
Emergency Petroleum Allocation Act of 1973 (FOOTNOTE 3) (15
U.S.C. 751 et seq.) and any rule or order issued under such
Act;
(FOOTNOTE 2) So in original. Probably should be ''may''.
(FOOTNOTE 3) See References in Text note below.
(B) at which natural gas may be sold to natural-gas companies
pursuant to the Natural Gas Act (15 U.S.C. 717 et seq.), any
other Act, regulations governing natural gas pricing, or any
rule or order issued under any such Act or any such
regulations; or
(C) at which either Federal oil or gas may be sold under any
other provision of law or rule or order thereunder which sets a
price (or manner for determining a price) for oil or gas; and
(2) the term ''small refiner'' has the meaning given such term
by Small Business Administration Standards 128.3-8(d) and (g), as
in effect on September 18, 1978, or as there-after revised or
amended.
(f) Purchase of oil and gas in time of war
Nothing in this section shall prohibit the right of the United
States to purchase any oil or gas produced on the outer Continental
Shelf as provided by section 1341(b) of this title.

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