PRIA, Government Policy, Made Personal

Summary

The Secretary of the Interior may waive, suspend, or lower rent or minimum royalties, or cut the royalty for all or part of a lease, when doing so will help develop resources or when the lease cannot be operated under its current terms. At the leaseholder’s request, the Secretary must review royalty rates before commercial operations start on combined hydrocarbon leases in special tar sand areas. "Tar sand" means rock (not coal, oil shale, or gilsonite) that has a hydrocarbon with a gas-free viscosity over 10,000 centipoise at original reservoir temperature, or rock that is mined or quarried for hydrocarbons. If the Secretary orders or agrees to suspend operations to conserve resources, rental and minimum royalty payments stop during the suspension and the lease is extended by that suspension period. The rule applies to all oil and gas leases under this chapter, including those in unit or cooperative development, but it does not allow waiving, suspending, or reducing advance royalties.

Title 30, §209

Mineral Lands and Mining, Source: USLM XML via OLRC

The Secretary of the Interior, for the purpose of encouraging the greatest ultimate recovery of coal, oil, gas, oil shale gilsonite (including all vein-type solid hydrocarbons),, phosphate, sodium, potassium and sulfur, and in the interest of conservation of natural resources, is authorized to waive, suspend, or reduce the rental, or minimum royalty, or reduce the royalty on an entire leasehold, or on any tract or portion thereof segregated for royalty purposes, whenever in his judgment it is necessary to do so in order to promote development, or whenever in his judgment the leases cannot be successfully operated under the terms provided therein. Provided, however, That in order to promote development and the maximum production of tar sand, at the request of the lessee, the Secretary shall review, prior to commencement of commercial operations, the royalty rates established in each combined hydrocarbon lease issued in special tar sand areas. For purposes of this section, the term “tar sand” means any consolidated or unconsolidated rock (other than coal, oil shale, or gilsonite) that either: (1) contains a hydrocarbonaceous material with a gas-free viscosity, at original reservoir temperature, greater than 10,000 centipoise, or (2) contains a hydrocarbonaceous material and is produced by mining or quarrying. In the event the Secretary of the Interior, in the interest of conservation, shall direct or shall assent to the suspension of operations and production under any lease granted under the terms of this chapter, any payment of acreage rental or of minimum royalty prescribed by such lease likewise shall be suspended during such period of suspension of operations and production; and the term of such lease shall be extended by adding any such suspension period thereto. The provisions of this section shall apply to all oil and gas leases issued under this chapter, including those within an approved or prescribed plan for unit or cooperative development and operation. Nothing in this section shall be construed as granting to the Secretary the authority to waive, suspend, or reduce advance royalties.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1981—Pub. L. 97–78 inserted reference to gilsonite (including all vein-type solid hydrocarbons) and inserted proviso that, in order to promote development and the maximum production of tar sand, at the request of the lessee, the Secretary review, prior to commencement of commercial operations, the royalty rates established in each combined hydrocarbon lease issued in special tar sand areas, and that, for purposes of this section, “tar sand” means any consolidated or unconsolidated rock (other than coal, oil shale, or gilsonite) that either contains a hydrocarbonaceous material with a gas-free viscosity, at original reservoir temperature, greater than 10,000 centipoise, or contains a hydrocarbonaceous material and is produced by mining or quarrying. 1976—Pub. L. 94–377 inserted sentence at end that nothing in this section shall be construed as granting to the Secretary authority to waive, suspend, or reduce advance royalties. 1948—Act June 3, 1948, extended applicability of section to oil shale, phosphate, sodium, potassium, and sulphur. 1946—Act Aug. 8, 1946, principally inserted first and third sentences relating to waiver, suspension or reduction of royalties or rentals, and applicability of section to cooperative or unit plans, respectively.

Statutory Notes and Related Subsidiaries

Savings Provision

See note set out under section 181 of this title.

§209 Suspension, Waiver, or Reduction of Rents or Royalties to Promote Development or Operation; Extension of Lease on Suspension of Operations and Production