30 USC 226 - Leasing of oil and gas parcels

U.S Code last checked for updates: Aug 17, 2025

§ 226.

Leasing of oil and gas parcels

(a)

Leasing authorized

(1)

In general

(2)

Resource management plans

(A)

Lease terms and conditions

A lease issued by the Secretary under this section with respect to an applicable parcel of land made available for leasing under paragraph (1)—

(i)

shall be subject to the terms and conditions of the approved resource management plan; and

(ii)

may not require any stipulations or mitigation requirements not included in the approved resource management plan.

(B)

Effect of amendment

(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, 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. For purposes of the previous sentence, the term “eligible lands” means all lands that are subject to leasing under th

is chapter and are not excluded from leasing by a statutory prohibition, and the term “available”, with respect to eligible lands, means those lands that have been designated as open for leasing under a land use plan developed under

(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 section 4332(2)(C) of title 42.

(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 12½ per centum in amount or value of production removed or sold from the lease, subject to subsection (k)(1)(c).1

 So in original. Probably should be subsection “(k)(1)(C).”.

(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 section 183 of this title that a permittee under a permit authorizing prospecting for tar sand must exercise due 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).

(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) 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).

(D)

A lease issued pursuant to this paragraph shall continue so long as oil or gas continues to be produced in paying quantities.

(E)

This paragraph shall apply only to those lands under the administration of the Secretary of Agriculture where the United States acquired an interest in such lands pursuant to the Act of March 1, 1911 (36 Stat. 961 and following).

(c)

Lands subject to leasing under subsection (b); first qualified applicant

(1)

If the lands to be leased are not leased under subsection (b)(1) of this section or are not subject to competitive leasing under subsection (b)(2) of this section, the person first making application for the lease who is qualified to hold a lease under this chapter shall be entitled to a lease of such lands without competitive bidding, upon payment of a non-refundable application fee of at least $75. A lease under this subsection shall be conditioned upon the payment of a royalty at a rate of 12.5 percent in amount or value of the production removed or sold from the lease. Leases shall be issued within 60 days of the date on which the Secretary identifies the first responsible qualified applicant.

(2)

(A)

Lands (i) which were posted for sale under subsection (b)(1) of this section but for which no bids were received or for which the highest bid was less than the national minimum acceptable bid and (ii) for which, at the end of the period referred to in subsection (b)(1) of this section no lease has been issued and no lease application is pending under paragraph (1) of this subsection, shall again be available for leasing only in accordance with subsection (b)(1) of this section.

(B)

The land in any lease which is issued under paragraph (1) of this subsection or under subsection (b)(1) of this section which lease terminates, expires, is cancelled or is relinquished shall again be available for leasing only in accordance with subsection (b)(1) of this section.

(d)

Annual rentals

(e)

Primary terms

(f)

Notice of proposed action; posting of notice; terms and maps

(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

(h)

National Forest System Lands

(i)

Termination

(j)

Drainage agreements; primary term of lease, extension

(k)

Mining claims; suspension of running time of lease

(l)

Exchange of leases; conditions

(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

(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, 12½ per centum in amount or value of production removed or sold from the lease.

(2)

Except as provided in this section, nothing in the Combined Hydrocarbon Leasing Act of 1981 shall be construed to diminish or increase the rights of any lessee under any oil and gas lease issued prior to November 16, 1981.

(o)

Certain outstanding oil and gas deposits

(1)

Prior to the commencement of surface-disturbing activities relating to the development of oil and gas deposits on lands described under paragraph (5), the Secretary of Agriculture shall require, pursuant to regulations promulgated by the Secretary, that such activities be subject to terms and conditions as provided under paragraph (2).

(2)

The terms and conditions referred to in paragraph (1) shall require that reasonable advance notice be furnished to the Secretary of Agriculture at least 60 days prior to the commencement of surface disturbing activities.

(3)

Advance notice under paragraph (2) shall include each of the following items of information:

(A)

A designated field representative.

(B)

A map showing the location and dimensions of all improvements, including but not limited to, well sites and road and pipeline accesses.

(C)

A plan of operations, of an interim character if necessary, setting forth a schedule for construction and drilling.

(D)

A plan of erosion and sedimentation control.

(E)

Proof of ownership of mineral title.

Nothing in this subsection shall be construed to affect any authority of the State in which the lands concerned are located to impose any requirements with respect to such oil and gas operations.

(4)

The person proposing to develop oil and gas deposits on lands described under paragraph (5) shall either—

(A)

permit the Secretary to market merchantable timber owned by the United States on lands subject to such activities; or

(B)

arrange to purchase merchantable timber on lands subject to such surface disturbing activities from the Secretary of Agriculture, or otherwise arrange for the disposition of such merchantable timber, upon such terms and upon such advance notice of the items referred to in subparagraphs (A) through (E) of paragraph (3) as the Secretary may accept.

(5)

(A)

The lands referred to in this subsection are those lands referenced in subparagraph (B) which are under the administration of the Secretary of Agriculture where the United States acquired an interest in such lands pursuant to the Act of March 1, 1911 (36 Stat. 961 and following), but does not have an interest in oil and gas deposits that may be present under such lands. This subsection does not apply to any such lands where, under the provisions of its acquisition of an interest in the lands, the United States is to acquire any oil and gas deposits that may be present under such lands in the future but such interest has not yet vested with the United States.

(B)

This subsection shall only apply in the Allegheny National Forest.

(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 [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

(B)

Issuance of decision on permit

(C)

Denial of permit

(4)

Term

(q)

Commingling of production

(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; Pub. L. 113–291, div. B, title XXX, § 3022(a), Dec. 19, 2014, 128 Stat. 3762; Pub. L. 117–169, title V, § 50262(a)(1), (b), (c)(1), (d), (e)(1), Aug. 16, 2022, 136 Stat. 2056, 2057; Pub. L. 119–21, title V, §§ 50101(a), (b)(3), (d), July 4, 2025, 139 Stat. 137, 138.)

cite as: 30 USC 226

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