---
kind: "section"
citation: "30 C.F.R. § 1206.357"
title: "30"
number: "1206.357"
heading: "How do I calculate royalty due on byproducts?"
url: "https://uscodex.org/cfr/30/1206.357"
---

# §1206.357. How do I calculate royalty due on byproducts?

- (a) If you sell byproducts, you must determine the royalty due on the byproducts that are royalty-bearing under:
  - (1) Applicable lease terms of Class I leases and of Class III leases that do not elect to be subject to all of the BLM regulations promulgated for leases issued after August 8, 2005, under [43 CFR 3200.7(a)(2)](/cfr/43/3200.7.md?p=a-2), or
  - (2) Applicable statutory provisions at [30 U.S.C. 1004(a)(2)](/usc/30/1004.md?p=a-2) for Class II leases and for Class III leases that do elect to be subject to all of the BLM regulations promulgated for leases issued after August 8, 2005, under [43 CFR 3200.7(a)(2)](/cfr/43/3200.7.md?p=a-2).
- (b) You must determine the royalty due on the byproducts by multiplying the royalty rate in your lease or that BLM prescribes under [43 CFR 3211.19](/cfr/43/3211.19.md) by a value of the byproducts determined in accordance with the first applicable of the following subparagraphs:
  - (1) The gross proceeds accruing to you from the arm's-length sale of the byproducts, less any applicable byproduct transportation allowances determined under §§ [1206.358](/cfr/30/1206.358.md) and [1206.359](/cfr/30/1206.359.md). See [§ 1206.361](/cfr/30/1206.361.md) for additional provisions applicable to determining gross proceeds;
  - (2) Other relevant matters including, but not limited to, published or publicly available spot-market prices, or information submitted by the lessee concerning circumstances unique to a particular lease operation or the saleability of certain byproducts; or
  - (3) **Any other reasonable valuation method approved by ONRR.**

## Notes

### Source

Source: 72 FR 24459, May 2, 2007, unless otherwise noted.

### Authority

Authority: 5 U.S.C. 301 et seq., 25 U.S.C. 396, 396a et seq., 398, 398a et seq., 2101 et seq.; 30 U.S.C. 181 et seq., 351 et seq., 1001 et seq., 1701 et seq.; 43 U.S.C. 1301 et seq., 1331 et seq., and 1801 et seq.

### Source

Source: 48 FR 35641, Aug. 5, 1983, unless otherwise noted. Redesignated at 75 FR 61069, Oct. 4, 2010.