29–006 

113TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 113–201 

BLM LIVE INTERNET AUCTIONS ACT 

SEPTEMBER 10, 2013.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. HASTINGS of Washington, from the Committee on Natural 

Resources, submitted the following 

R E P O R T 

[To accompany H.R. 555] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Natural Resources, to whom was referred the 

bill (H.R. 555) to amend the Mineral Leasing Act to authorize the 

Secretary of the Interior to conduct onshore oil and gas lease sales 

through Internet-based live lease sales, and for other purposes, 

having considered the same, report favorably thereon without 

amendment and recommend that the bill do pass. 

PURPOSE OF THE BILL

The purpose of H.R. 555 is to amend the Mineral Leasing Act to 

authorize the Secretary of the Interior to conduct onshore oil and 

gas lease sales through Internet-based live lease sales. 

BACKGROUND AND NEED FOR LEGISLATION

In 1920, the Minerals Leasing Act was signed into law. The law 

requires competitive bidding for federal onshore oil and gas leases. 

In 1987, the Leasing Reform Act required this competitive bidding 

to be conducted orally. 

Attempting to prevent fraud in the bidding process and embrace 

advancing technology, Congress appropriated $250,000 in the Fiscal Year 2008 budgeted for a pilot internet leasing program. In 

2009, the Bureau of Land Management (BLM) held a pilot auction 

with extremely positive results. 

Additionally, in 2008, a 27 year old climate activist named Tim 

DeChristopher placed 14 fake bids worth $1.7 million on parcels of 

land BLM was auctioning for energy development. DeChristopher 

was convicted of civil disobedience, fined $10,000, and sentenced to 


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two years in federal prison. As a result of the DeChristopher scandal, in August 2009, the Department of the Interior issued a report 

listing Internet bidding as one option to reduce fraud in the bidding process. 

H.R. 555 would reduce the potential for fraud in the bidding 

process, save taxpayer dollars and ensure that the taxpayers get a 

fair return for activities on federal land. 

COMMITTEE ACTION

H.R. 555 was introduced on February 6, 2013, by Congressman 

Bill Johnson (R–OH). The bill was referred to the Committee on 

Natural Resources, and within the Committee to the Subcommittee 

on Energy and Mineral Resources. On May 22, 2013, the Subcommittee held a hearing on the bill. On July 24, 2013, the Full 

Natural Resources Committee met to consider the bill. The Subcommittee on Energy and Mineral Resources was discharged by 

unanimous consent. No amendments were offered, and the bill was 

adopted and ordered favorably reported to the House of Representatives by unanimous consent. 

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII 

of the Rules of the House of Representatives, the Committee on 

Natural Resources’ oversight findings and recommendations are reflected in the body of this report. 

COMPLIANCE WITH HOUSE RULE XIII 

1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the Rules of 

the House of Representatives requires an estimate and a comparison by the Committee of the costs which would be incurred in carrying out this bill. However, clause 3(d)(2)(B) of that rule provides 

that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974. Under clause 

3(c)(3) of rule XIII of the Rules of the House of Representatives and 

section 403 of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for this bill from the 

Director of the Congressional Budget Office: 

H.R. 555—BLM Live Internet Auctions Act 

H.R. 555 would authorize the Bureau of Land Management 

(BLM) to conduct auctions for federal onshore oil and gas leases 

using Internet-based bidding methods. The bill also would require 

BLM to prepare a report comparing outcomes of Internet-based 

auctions to outcomes of oral auctions conducted under current law. 

Using information provided by BLM and individuals familiar 

with Internet auction methods, CBO estimates that, assuming 

availability of appropriated funds, implementing the legislation 

would cost $2 million over the 2014–2018 period. That amount includes about $1 million to build an online system to facilitate auctions and annual costs to operate and maintain the system, which 

would be partially offset by savings associated with reducing the 

number of oral auctions conducted by BLM each year. 


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H.R. 555 could affect direct spending by increasing receipts from 

bonus bids; therefore, pay-as-you go procedures apply. Total bonus 

bids from onshore oil and gas leases averaged about $250 million 

annually over the 2008–2012 period. CBO expects that any change 

in receipts resulting from allowing the agency to conduct Internet 

auctions for onshore oil and gas leases would not be significant. 

H.R. 555 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Jeff LaFave. The estimate was approved by Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

2. Section 308(a) of Congressional Budget Act. As required by 

clause 3(c)(2) of rule XIII of the Rules of the House of Representatives and section 308(a) of the Congressional Budget Act of 1974, 

this bill does not contain any new budget authority, credit authority, or an increase or decrease in revenues or tax expenditures. 

Using information provided by BLM and individuals familiar with 

Internet auction methods, CBO estimates that, assuming availability of appropriated funds, implementing the legislation would 

cost $2 million over the 2014–2018 period. H.R. 555 could affect direct spending by increasing receipts from bonus bids for federal onshore oil and gas leases, but CBO estimates that these would not 

be significant. 

3. General Performance Goals and Objectives. As required by 

clause 3(c)(4) of rule XIII, the general performance goal or objective 

of this bill is to amend the Mineral Leasing Act to authorize the 

Secretary of the Interior to conduct onshore oil and gas lease sales 

through Internet-based live lease sales. 

EARMARK STATEMENT

This bill does not contain any Congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined under clause 9(e), 

9(f), and 9(g) of rule XXI of the Rules of the House of Representatives. 

COMPLIANCE WITH PUBLIC LAW 104–4 

This bill contains no unfunded mandates. 

COMPLIANCE WITH H. RES. 5 

Directed Rule Making. The Chairman does not believe that this 

bill directs any executive branch official to conduct any specific 

rule-making proceedings. 

Duplication of Existing Programs. This bill does not establish or 

reauthorize a program of the federal government known to be duplicative of another program. Such program was not included in 

any report from the Government Accountability Office to Congress 

pursuant to section 21 of Public Law 111–139 or identified in the 

most recent Catalog of Federal Domestic Assistance published pursuant to the Federal Program Information Act (Public Law 95–220, 

as amended by Public Law 98–169) as relating to other programs. 


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PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

MINERAL LEASING ACT 

* * * * * * * 

SEC. 17. (a) All lands subject to disposition under this Act which 

are known or believed to contain oil or gas deposits may be leased 

by the Secretary. 

(b)(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. 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 bidder of the remainder of the bonus bid, if any, and the 

annual rental for the first lease year. All bids for less than the national minimum acceptable bid shall be rejected. 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 the date of enactment of the Federal Onshore Oil and Gas Leasing Reform Act of 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 


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a national minimum acceptable bid 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. 

(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 121⁄2 per centum in amount of value of production removed or sold from the lease subject to section 

17(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 Act, 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 26 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 the date of enactment of this paragraph, 

if the election is made before the date that is 1 year after the 

date of enactment of this paragraph; 

(ii) in the case of an interest which vests within 1 year after 

the date of enactment of this paragraph, if the election is made 

before the date that is 2 years after the date of enactment of 

this paragraph; 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. 


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(C) Notwithstanding the consent requirement referenced in section 3 of the Mineral Leasing Act for Acquired Lands (30 U.S.C. 

352), 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 Act. Such 

lease shall be subject to all terms and conditions under this Act 

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)(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 Act 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) 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) 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 


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at that time shall be extended for two years and so long thereafter 

as oil or gas is produced in paying quantities. 

(f) 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) The Secretary of the Interior, or for National Forest lands, 

the Secretary of Agriculture, shall regulate all surface-disturbing 

activities conducted pursuant to any lease issued under this Act, 

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 Act 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 Act. 

(h) 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) 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 


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commenced on the land prior to or within sixty days after cessation 

of production are conducted thereon with reasonable diligence, or 

so long as oil or gas is produced in paying quantities as a result 

of such operations. No lease issued under this section shall expire 

because operations or production is suspended under any order, or 

with the consent, of the Secretary. No lease issued under this section covering lands on which there is a well capable of producing 

oil or gas in paying quantities shall expire because the lessee fails 

to produce the same unless the lessee is allowed a reasonable time, 

which shall be not less than sixty days after notice by registered 

or certified mail, within which to place such well in producing status or unless, after such status is established, production is discontinued on the leased premises without permission granted by the 

Secretary under the provisions of this Act. 

(j) 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) 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 7 of the Multiple 

Mineral Development Act of August 13, 1954 (68 Stat. 708), as 

amended (30 U.S.C. 527), whether such filing occur prior to enactment of the Mineral Leasing Act Revision of 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) 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 of 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 


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to be a new deposit; and (3) any production on or allocated to a 

lease pursuant to an approved cooperative or unit plan of development or operation from an oil or gas deposit which was discovered 

after May 27, 1941, on land committed to such plan, and which is 

determined by the Secretary to be a new deposit, where such lease, 

or a lease for which it is exchanged, was included in such plan at 

the time of discovery or was included in a duly executed and filed 

application for the approval of such plan at the time of discovery. 

(m) 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 collective 

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 Act 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 Act. 

When separate tracts cannot be independently developed and operated in conformity with an established well-spacing or development program, any lease, or a portion thereof, may be pooled with 

other lands, whether or not owned by the United States, under a 

communitization or drilling agreement providing for an apportionment of production or royalties among the separate tracts of land 

comprising the drilling or spacing unit when determined by the 

Secretary of the Interior to be in the public interest, and operations 

or production pursuant to such an agreement shall be deemed to 

be operations or production as to each such lease committed thereto. 

Any lease issued for a term of twenty years, or any renewal 

thereof, or any portion of such lease that has become the subject 


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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 Act 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 Act. 

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 Act. Such authorization may provide for the payment of a storage fee or rental 

on such stored oil or gas or, in lieu of such fee or rental, for a royalty other than that prescribed in the lease when such stored oil 

or gas is produced in conjunction with oil or gas not previously produced. Any lease on which storage is so authorized shall be extended at least for the period of storage and so long thereafter as 

oil or gas not previously produced is produced in paying quantities. 

(n)(1)(A) The owner of (1) an oil and gas lease issued prior to the 

date of enactment of the Combined Hydrocarbon Leasing Act of 

1981 or (2) a valid claim to any hydrocarbon resources leasable 


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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 the date of enactment of that Act 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 the effective date of this Act. If any 

oil and gas lease eligible for conversion under this section would 

otherwise expire after the date of this Act 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 the enactment of such Act. 

(o) CERTAIN OUTSTANDING OIL AND GAS.—(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. 


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(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 PER- MITS.— 

(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 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 


smartinez on DSK6TPTVN1PROD with REPORTS
13 

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. 

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smartinez on DSK6TPTVN1PROD with REPORTS