reports will be required, and all physical facilities and records pertaining to the operations may be inspected by the Department as part of its continuous monitoring of the operation. Section 1 (C) of the lease stipulations provides for an environmental monitoring program which will measure the impacts of development. The results will be assessed by the Department and annual reports will be released for public review.

4. Bonding

A bond would be required as security to ensure that the approved development-restoration plan would be conducted in a manner designed to avoid degradation of the environment and that all other related lease terms would be met. The bond would be for not less than $2,000 per acre of land to be involved in actual mining operations or spent shale disposal and not less than $500 per acre for all other portions of the leased land that would be affected during the first 3-year period of operation. The total bond shall, in no event, be less than $20,000. Bonds for subsequent periods would be in sufficient amounts to provide for reclamation and restoration of disturbed lands. 5. Extraordinary environmental costs

The proposed lease gives the Secretary of the Interior discretionary authority to allow the credit of extraordinary environmental costs against production royalties due the Government. Before the lessee can seek this relief, he must show that compliance with the environmental protection requirements under plans approved under regulations now or hereafter in force or imposed by new legislation has engendered extraordinary costs in excess of those in the contemplation of the parties. This provision has been devised specifically and only for inclusion in the six prototype leases. Its purpose is to provide a method to help assure satisfactory environmental results without jeopardizing the economic viability of an operation in the event that unexpectedly high environmental costs develop. There is no intent to include such provisions in any oil shale leases beyond this prototype program.

FUTURE DEVELOPMENT OF FEDERAL OIL SHALE RESOURCES

The Department of the Interior has carefully formulated the concepts and details of the prototype oil-shale leasing program over an extended period of time. The program is a "prototype" since it seeks to establish a new cooperative effort between the private and public sectors to ensure the compatibility of industrial development with environmental quality. As a prototype, it is the mechanism through which environmental impacts can be controlled and monitored before any large scale development occurs and is designed so that any extraordinary and unforeseen impacts, which may develop, occur on a widely separated and limited scale.

TAR SANDS AND ASPHALT

Leases for native asphalt and tar sands are governed by the section of the Mineral Leasing Act covering oil shale. The tar sands defined in the statute are solid and semi-solid bitumen, and bituminous rock

(including oil-impregnated rock or sands from which oil is recoverable only by special treatment after the deposit is mined or quarried). Additional provisions for the leasing of asphalt is made in the regulations. Apparently there are no regulations dealing with tar sands. The statutory provisions, which were primarily designed for oil shale but also apply to tar sands and asphalt, are rather general. The lease term may be for an indeterminate period. A royalty is required but not specified. Rentals are set at 50 cents per acre and are creditable against royalties. The maximum acreage under either a tar sands or asphalt lease which may be held by a person in any one state is 7,680 acres. A special subsection allows the issuance of a tar sand or native asphalt lease on land already covered by a lease for another mineral.

These statutory provisions have been modified somewhat for asphalt in the regulations. Asphalt leases can be issued only competitively. The primary term for such leases is 10 years and so long thereafter as the lessee complies with the terms of the lease. The lease size is restricted to 2,560 acres.

No tar sand or asphalt leases are presently being issued by the Department of the Interior.

V. OTHER LEASABLE MINERALS

INTRODUCTION

The leasing systems established by the Mineral Leasing Act of 1920, as amended, the Acquired Lands Leasing Act of 1947, and other legislative enactments encompass a wide variety of minerals. The 1920 Leasing Act covers coal, oil and gas, oil shale, phosphate, sodium, potassium, native asphalt, solid and semisolid bitumen and bituminous rock found on public domain lands. It also extends to sulfur on public domain lands in Louisiana and New Mexico. The Acquired Lands Act extends to coal, oil and gas, oil shale, phosphate, sodium, potassium, and sulfur on lands acquired by the United States. Under Section 402 of Reorganization Plan No. 3 of 1946 hardrock minerals are made leasable on certain acquired lands. In addition, there are several other pieces of legislation which establish special leasing systems for certain lands. This section will not cover the coal, oil and gas, or oil shale leasing systems; nor will it treat the leasing of geothermal resource which is covered by the Geothermal Steam Act of 1970.

In general, the leasing systems provide for the granting of a prospecting permit giving the permittee the exclusive right to look for the named mineral within the described area for a specified period of time in order to establish the existence or workability of deposits of such mineral. If a valuable deposit of the mineral is discovered within the described premises during the permit term the permittee is entitled to a preference right lease. Leases will be issued only on a competitive basis where the existence or workability of deposits of the mineral is already known. The systems established for the non fuel minerals covered by the 1920 Mineral Leasing Act will be considered first.

PROSPECTING PERMITS

Prospecting permits may be issued only to citizens of the United States, associations of such citizens, and corporations organized under the laws of the United States or a State. Non-U.S. citizens may hold stock interests in corporations holding permits or leases so long as their country affords U.S. citizens similar privileges.

The provisions of the 1920 Leasing Act dealing with sodium, potassium, and sulfur state that lands "known to contain valuable deposits of . . .” those minerals are to be subject to competitive leasing. The provision dealing with phosphate states that competitive leasing is authorized "when the public interest will be best served thereby." Following the language in the coal sections, phosphate prospecting permits may be issued "where prospecting or exploratory work is necessary to determine the existence or workability" of phosphate deposits. By regulation, prospecting permits for sodium, potassium, and sulfur are also to be issued for the purpose of determining the existence or workability of deposits of these minerals.

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Prospecting permits will not be issued for lands which have been designated "leasing areas". These are areas where sufficient geologic data is available to determine the existence of a mineral deposit of sufficient quantity and quality to be deemed workable. When a prospecting permit application is filed, the status of the lands involved is reviewed and a determination made regarding whether a permit should issue.

A prospecting permit is good for a term of two years. Permits for sodium and sulfur may not be extended. Phosphate permits may be extended for a period not in excess of four years. Other permits may be extended for two years, by regulation, provided that certain requirements are met.

Permits terminate automatically upon nonpayment of rentals. If the permittee fails to comply with the general regulations in effect at the date of the permit, or any terms or stipulations of the permit, and such failure continues for 30 days after written notice of such violation, the permit may be cancelled.

PREFERENCE RIGHT LEASES

The holder of a prospecting permit who discovers a valuable deposit of the mineral being sought within the described land during the term of the permit is entitled to a preference right lease to all or part of the lands covered by the permit. If the permit is for potassium, sodium, or sulfur the permittee must show that valuable deposits have been discovered and that the land is "chiefly valuable therefor."

Except for coal, where leases are issued for an indefinite term subject to readjustment each 20 years, other preference-right leases are issued for a term of 20 years and so long thereafter as the lease terms are complied with. They are subject to readjustment at the end of each twenty-year period. (However, a preference-right sodium lease has a right of renewal for successive ten-year terms).

The prospecting permit does not set forth the terms and conditions of the preference-right lease. These are established only after a valuable mineral deposit has been discovered and the lease application is made. Since there is no difference between the terms and conditions of a preference-right lease and a competitive lease, a discussion of these matters will be postponed to the following section.

COMPETITIVE LEASES

The Secretary of the Interior is authorized to lease competitively lands containing valuable deposits of the leasable minerals. Such competitive leasing may be initiated either by application or by motion of the Bureau of Land Management. Competitive bidding is required for lands designated as "leasing areas" or for lands otherwise deemed to be not available for prospecting permits because the existence or workability of leasable minerals is known.

A notice of lease offer is published which sets forth the time and place of sale, whether the sale is by oral or sealed bids, and where a detailed statement setting forth the terms and conditions of the bidding and of the lease offer (including the terms of the lease itself) may be found.