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42 U.S. Code § 15902. Program on oil and gas royalties in-kind
(a) Applicability of sectionNotwithstanding 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 conditionsAll 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
Delivery by, or on behalf of, the lessee of the royalty amount and quality due under the lease satisfies royalty obligation of the lessee for the amount delivered, except that transportation and processing reimbursements paid to, or deductions claimed by, the lessee shall be subject to review and audit.
(2) Marketable condition
(A) Definition of marketable condition
In this paragraph, the term “in marketable condition” means sufficiently free from impurities and otherwise in a condition that the royalty production will be accepted by a purchaser under a sales contract typical of the field or area in which the royalty production was produced.
(B) Requirement
Royalty production shall be placed in marketable condition by the lessee at no cost to the United States.