An Act to amend title 10, United States Code, to authorize the Secretary of the Navy to take possession of the naval oil shale reserves, and for other purposes
PL 87-796 (H.R.5423), enacted 10/11/1962

904 
PUBLIC LAW 87-796~OCT. 11, 1962 
[76 STAT. 
October 11, 1962 
[H. R. 5423] 
Public Law 87-796 
AN ACT 
To amend title 10^ United States Code, to authorize the Secretary of the Navy 
to take possession of the naval oil shale reserves, and for other purposes. 
Navy. 
Naval oil 
shale reserves, 
Ipossession. 
70A Stat. 457. 
41 Stat. 437. 
Administration. 
Post, p. 906. 
70A Stat. 459. 
Production 
requirements. 
Reexamination. 
Oil reserves, 
contracts with 
owners, etc. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled^ That title 10, United 
States Code, is amended as follows: 
(1) Section 7421 is amended to read as follows: 
" (a) The Secretary of the Navy shall take possession of all proper-
ties inside the naval petroleum and oil shale reserves that are or may 
become subject to the control of and use by the United States for naval 
purposes, except as otherwise provided in section 7438 hereof. 
"(b) The Secretary has exclusive jurisdiction and control over 
those lands inside naval petroleum reserves numbered 1 and 2 that 
are covered by leases granted under sections 181-184,185-188,189-194, 
201, 202-209, 211-214, 223, 224-226, 226d, 226e, 227-229a, 241, 251, and 
261-263 of title 30, and shall administer those leases." 
(2) Section 7422 is amended to read as follows: 
"(a) Except as otherwise provided in section 7438 hereof, the Sec-
retary of the Navy, directly or by contract, lease, or otherwise, shall 
explore, prospect, conserve, develop, use, and operate the naval 
{petroleum and oil shale reserves in his discretion, subject to approval 
)y the President. 
"(b) The naval petroleum and oil shale reserves and lands outside 
naval petroleum reserve numbered 1 covered by contracts under sec-
tion 7426 of this title, shall be used and operated for— 
"(1) the protection, conservation, maintenance, and testing of 
those reserves; or 
"(2) the production of petroleum, gas, oil shale and products 
thereof whenever and to the extent that the Secretary, with the 
approval of the President, finds that it is needed for national 
defense and the production is authorized by a joint resolution 
of Congress." 
(3) Section 7423 is amended to read as follows: 
"The Secretary of the Navy shall from time to time reexamine the 
need for the production of petroleum or products from oil shale for 
national defense when that production is authorized under section 
7422 of this title. If he finds that the authorized quantity is no 
longer needed, he shall reduce production to the amount currently 
needed for national defense." 
(4) Section 7424 is amended to read as follows: 
"(a) To consolidate and protect the oil lands owned by the United 
States, the Secretary of the Navy may— 
"(1) contract with owners and lessees of land inside or adjoin-
ing naval petroleum and oil shale reserves for— 
"(A) conservation in the ground of oil and gas; and 
' '' 
"(B) compensation for estimated drainage in lieu of drill-
ing or operating offset wells; and 
"(2) acquire privately owned lands or leases inside naval 
petroleum reserve numbered 1 by exchange of— 
"(A) lands of the United States inside naval petroleum 
reserve numbered 1; 
"(B) the right to royalty production from any of the 
naval petroleum reserves; and 
"(C) the right to any money due the United States as a 
result of the wrongful extraction of petroleum products from 
lands inside naval petroleum reserve numbered 1, 
76 STAT.] 
PUBLIC LAW 87-796-OCT. 11, 1962 
905 
"(b) The Secretary shall report annually to Congress all agree-
ments under this section." 
(5) Section 7428 is amended to read as follows: 
"Every unit or cooperative plan of development and operation, 
except a plan authorized by section 7426 of this title, and every lease 
affecting lands owned by the United States within the naval petroleum 
and oil shale reserves shall contain a provision authorizing the Secre-
tary of the Navy, subject to approval by the President and to any 
limitation in the plan or lease, to change from time to time the rate 
of prospecting and development on, and the quantity and rate of 
production from, lands of the United States under the plan or lease, 
notwithstanding any other provision of law." 
(6) Section 7430 is amended to read as follows: 
"(a) The Secretary of the Navy in administering the naval petro-
leum and oil shale reserves under this chapter shall use, store, sell, or 
exchange for other petroleum or refined products, the oil and gas 
products, including royalty products, oil shale and products there-
from produced, from lands in the naval petroleum and oil shale 
reserves and lands outside petroleum reserve numbered^ 1 covered by 
joint, unit, or other cooperative plans for the benefit of the United 
States. 
"(b), Each sale of petroleum, gas, other hydrocarbons, oil shale, 
or products therefrom, under this section shall be made by the Secre-
tary at public sale to the highest qualified bidder at such time, in such 
amounts, and after such advertising as the Secretary considers proper." 
(7) Section 7431 is amended to read as follows: 
"The Committees on Armed Services of the Senate and the House 
of Representatives must be consulted and the President's approval 
must be obtained before any condemnation proceedings may be started 
under this chapter and before any of the following transactions 
authorized by this chapter may be effective: 
"(1) A lease of any part of the naval petroleum or oil shale 
reserves. 
"(2) A contract to alienate from the United States the use, 
control, or possession of any part of the naval petroleum or oil 
shale reserves (except that consultation and Presidential approval 
are not required in connection with the issuance of permits, 
licenses, easements, grazing and agricultural leases, rights-of-way, 
and similar contracts pertaining to use of the surface area of 
the naval petroleum and oil shale reserves). 
"(3) A contract to sell the oil and gas (other than royalty 
oil and gas), oil shale, and products therefrom produced from 
any part of the naval petroleum and oil shale reserves. 
"(4) A contract for conservation or for compensation for esti-
mated drainage. 
"(5) An agreement to exchange land, the right to royalty pro-
duction, or the right to any money due the United States." 
(8) Section 7432 is amended to read as follows: 
"(a) Expenses incurred by the Secretary of the Navy with respect 
to the naval petroleum and oil shale reserves shall be paid from appro-
priations made available for the purposes specified in this chapter. 
" (b) Expenditures necessary to carry out this chapter shall be made 
under the direction of the President, who shall submit estimates for 
these expenditures as prescribed by law." 
(9) Section 7433 is amended to read as follows: 
"(a) Any oil, gas, gasoline or other substance accruing to the United 
States as royalty from any lease under this chapter shall be delivered 
Agreements and 
leases. 
70A Stat. 460. 
Disposition 
of products. 
Prior ^proval 
for certain 
transactions. 
Expenditures 
Disposition of 
royalties. 
906 
PUBLIC LAW 87-796-OCT. 11, 1962 
[76 STAT. 
Qxxarterly 
reports. 
Foreign 
interests. 
41 Stat. 43-7. 
Rifle, Colo.; 
demonstration 
facility. 
Possession 
and use. 
to the United States, or shall be paid for in money, as the Secretary of 
the Navy elects. 
"(b) All money accruing to the United States from lands in the 
naval petroleum and oil shale reserves shall be covered into the 
Treasury." 
(10) Section 7434 is amended to read as follows: 
"Within thirty days after the close of each quarter, the Secretary of 
the Navy shall report to the Committees on Armed Services of the 
Senate and House of Representatives the production from the naval 
petroleum and oil shale reserves during the preceding quarter." 
(11) Section 7435 is amended to read as follows: 
"(a) If the laws, customs, or regulations of any foreign country 
deny the privilege of leasing public lands to citizens or corporations 
of the United States, citizens of that foreign country, or corporations 
controlled by citizens of that country, may not, by contract made after 
July 1,1937, or by stock ownership, holding, or control, acquire or own 
any interest in, or right to any benefit from, any lease of land in the 
naval petroleum, naval oil shale, or other naval fuel reserves made 
under sections 181-184, 185-188, 189-194 201, 202-209, 211-214, 223, 
224-226,226d, 226e, 227-229a, 241,251, and 261-263 of title 30, or under 
this chapter. 
"(b) The Secretary of the Navy may cancel any lease for any viola-
tion of this section." 
(12) Section 7438 is amended to read as follows: 
'*§ 7438. Rifle, Colorado, Plant; possession, use, and transfer of 
"(a) The Secretary of the Interior shall take possession of the 
experimental demonstration facility near Rifle, Colorado^ which was 
constructed and operated by the Department of the Interior on lands 
on or near the naval oil shale reserves under the Act of April 5,1944, 
30 use 321-325. chapter 172 (58 Stat. 190), as amended. 
"(b) The Secretary of the Interior, subject to the approval of the 
President, shall by contract, lease, or otherwise encourage the use of 
the facility described in subsection (a) above in research, develop-
ment, test, evaluation, and demonstration work. For such purposes 
the Secretary of the Interior may use, lease for use by institutions, 
organizations, or individuals, public or private, or transfer by letter 
to the Secretary of the Navy the facility described in subsection (a) 
above and may construct, install, and operate, or lease for operation 
additional experimental facilities on such lands. The Secretary of the 
Interior may, after consultation by the Secretary of the Navy with 
the Committees on Armed Services of the Senate and the House of 
Representatives, mine and remove, or authorize the mining and 
removal, of any oil shale or products therefrom from lands in the 
naval oil shale reserves that may be needed for such experimentation. 
" (c) Nothing herein contained shall be construed— 
"(1) to authorize the commercial development and operation 
of the naval oil shale reserves by the Government in competition 
with private industry; or 
" (2) in diminution of the responsibility of the Secretary of the 
Navy in providing oil shale and products therefrom for needs of 
national defense." 
(13) The analysis of chapter 641 is amended as follows: In the last 
line after the figure "7438" delete the words 
"Exclusion of naval oil shale reserves" 
and insert in lieu thereof the words 
"Rifle, Colorado, plant; possession, use, and transfer of." 
Approved October 11, 1962.