View all text of Part A [§ 15901 - § 15912]
§ 15902. Program on oil and gas royalties in-kind
(a) Applicability of section
Notwithstanding any other provision of law, this section applies to all royalty in-kind accepted by the Secretary on or after August 8, 2005, under any Federal oil or gas lease or permit under—
(1)section 192 of title 30;
(2)section 1353 of title 43; or
(3) any other Federal law governing leasing of Federal land for oil and gas development.
(b) Terms and conditions
All royalty accruing to the United States shall, on the demand of the Secretary, be paid in-kind. If the Secretary makes such a demand, the following provisions apply to the payment:
(1) Satisfaction of royalty obligation
(2) Marketable condition
(A) Definition of marketable condition
(B) Requirement
(3) Disposition by the Secretary
The Secretary may—
(A) sell or otherwise dispose of any royalty production taken in-kind (other than oil or gas transferred under section 1353(a)(3) of title 43 1
1 So in original. Probably should be followed by a closing parenthesis.
for not less than the market price; and(B) transport or process (or both) any royalty production taken in-kind.
(4) Retention by the Secretary
The Secretary may, notwithstanding section 3302 of title 31, retain and use a portion of the revenues from the sale of oil and gas taken in-kind that otherwise would be deposited to miscellaneous receipts, without regard to fiscal year limitation, or may use oil or gas received as royalty taken in-kind (referred to in this paragraph as “royalty production”) to pay the cost of—
(A) transporting the royalty production;
(B) processing the royalty production;
(C) disposing of the royalty production; or
(D) any combination of transporting, processing, and disposing of the royalty production.
(5) Limitation
(A) In general
(B) Exception
(c) Reimbursement of cost
If the lessee, pursuant to an agreement with the United States or as provided in the lease, processes the royalty gas or delivers the royalty oil or gas at a point not on or adjacent to the lease area, the Secretary shall—
(1) reimburse the lessee for the reasonable costs of transportation (not including gathering) from the lease to the point of delivery or for processing costs; or
(2) allow the lessee to deduct the transportation or processing costs in reporting and paying royalties in-value for other Federal oil and gas leases.
(d) Benefit to the United States required
(e) Deduction of expenses
(1) In general
(2) Accounting for deductions
(f) Consultation with States
The Secretary—
(1) shall consult with a State before conducting a royalty in-kind program under this part within the State;
(2) may delegate management of any portion of the Federal royalty in-kind program to the State except as otherwise prohibited by Federal law; and
(3) shall consult annually with any State from which Federal oil or gas royalty is being taken in-kind to ensure, to the maximum extent practicable, that the royalty in-kind program provides revenues to the State greater than or equal to the revenues likely to have been received had royalties been taken in-value.
(g) Small refineries
(1) Preference
(2) Proration among refineries in production area
(h) Disposition to Federal agencies
(1) Onshore royalty
(2) Offshore royalty
(i) Federal low-income energy assistance programs
(1) Preference
(2) Report
Not later than 3 years after August 8, 2005, the Secretary shall submit a report to Congress—
(A) assessing the effectiveness of granting preferences specified in paragraph (1); and
(B) providing a specific recommendation on the continuation of authority to grant preferences.
(Pub. L. 109–58, title III, § 342, Aug. 8, 2005, 119 Stat. 697; Pub. L. 113–188, title XI, § 1101, Nov. 26, 2014, 128 Stat. 2023.)