[Federal Register Volume 79, Number 95 (Friday, May 16, 2014)]
[Notices]
[Pages 28540-28544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11410]



[[Page 28540]]

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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[LLNM006200 L99110000.EK0000 XXX L4053RV]


Notice of Proposed Action: Implementation of Helium Stewardship 
Act Sales and Auctions

AGENCY: Bureau of Land Management, Interior.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The purpose of this notice is to inform the public of and 
request comments on the methods and procedures that the Department of 
the Interior, Bureau of Land Management (BLM), intends to use to 
implement the terms of the Helium Stewardship Act of 2013 (``the Act'' 
or ``the HSA''). Section 6(b) of the Act (``Phase B: Auction 
Implementation'') establishes the dates and the method of sales and 
auctions of Federal helium from the Federal Helium Reserve to be 
delivered during the period beginning on October 1, 2014.

DATES: Comments regarding the proposed helium sales and auctions must 
be received by the BLM on or before June 16, 2014. The BLM intends to 
hold the Fiscal Year (FY) 2015 sale and auction and FY 2016 one-time 
sale, as described in the Act and in this notice below, by August 1, 
2014.

ADDRESSES: You may submit your comments in one of two ways. You may 
mail comments to Bureau of Land Management, Amarillo Field Office, 801 
S. Fillmore, Suite 500, Amarillo, TX 79101, Attention: Helium Sale and 
Auction; or email them to [email protected] with ``Helium Sale and 
Auction'' in the subject line. Any comments regarding the proposed 
sale/auction will be reviewed by the BLM State Director or other 
authorized official of the Department of the Interior, who may take any 
appropriate action regarding the proposed sale/auction.

FOR FURTHER INFORMATION CONTACT: Robert Jolley, 806-356-1002. Persons 
who use a telecommunications device for the deaf (TDD) may call the 
Federal Information Relay Service (FIRS) at 1-800-877-8339. The FIRS is 
available 24 hours a day, 7 days a week, to leave a message for Mr. 
Jolley. You will receive a reply during normal business hours.

SUPPLEMENTARY INFORMATION: Background: On October 2, 2013, President 
Obama signed the Act. The Act ensures continued access to Federal crude 
helium; provides for an orderly transition to end Federal helium 
operations in four phases at the Cliffside Field near Amarillo, Texas, 
by 2021, resulting in minimal market disruption to end users; increases 
taxpayer returns and stimulates investment in private helium sources by 
selling crude helium at market-driven prices; bolsters transparency by 
requiring timely publication of information related to the Federal 
Helium Reserve; authorizes the BLM to obtain a global helium assessment 
that includes forecasts of demand and assessments of supply; 
establishes helium extraction, separation, and conservation research 
and development programs; and facilitates the development of a long-
term strategy for helium acquisition for all Federal users. Section 
6(b) of the Act requires the Department of the Interior, through the 
BLM Director, to offer for sale and auction annually, beginning in FY 
2014, a portion of the helium reserves owned by the United States 
stored underground at the Cliffside Field. On March 6, 2014, the BLM 
conducted a scoping meeting in Amarillo, Texas, during which the agency 
requested comments and suggestions for conducting the helium sales and 
auctions required by the Act. The results of the scoping meeting and a 
summary of comments the BLM received can be found at http://www.blm.gov/nm/helium. The BLM considered those comments as it 
developed the implementation plan described in this Notice.
    1.02 What Terms Do I Need To Know to Understand This Sale? Unless 
otherwise noted, the following definitions apply:
    Allocated sale volume means that portion of the annual sale volume 
of the Federal Helium Reserve that will be set aside for purchase by 
the crude helium refiners.
    Auction volume means those volumes of the Federal Helium Reserve 
offered for sale at auction to any person or qualified bidder under the 
Act.
    Cliffside Field means the subterranean formation near Amarillo, 
Texas, which is used as a helium storage reservoir and in which the 
Federal Helium Reserve is stored.
    Crude helium means a partially refined gas containing about 70 
percent helium and 30 percent nitrogen. However, the helium 
concentration may vary from 50 to 95 percent.
    Excess refining capacity means the reported total refining capacity 
of the refiner, minus the volume of refined helium delivery commitments 
for a particular fiscal year. The BLM will require each refiner to 
report excess refining capacity in advance of all Phase A and Phase B 
sales and Phase B auctions as a condition of those sales and auctions.
    Federal Helium Pipeline means the federally owned pipeline system 
through which helium extracted from the Federal Helium Reserve may be 
transported.
    Federal Helium Reserve means helium reserves owned by the United 
States that are stored in the Cliffside Field.
    Federal Helium System means:
    (A) The Federal Helium Reserve;
    (B) The Cliffside Field;
    (C) The Federal Helium Pipeline; and
    (D) All other infrastructure owned, leased, or managed under 
contract by the Secretary of the Interior (Secretary) for the storage, 
transportation, withdrawal, enrichment, purification, or management of 
helium.
    Federal in-kind crude helium or in-kind helium means helium 
purchased by private refiners who have sold or are selling to Federal 
users and their contractors a quantity of refined helium equivalent to 
the quantity of crude helium the refiner is purchasing or will purchase 
from the BLM under contract, under the requirements and procedures of 
43 CFR part 3195. The refined helium initially supplied to a Federal 
user or its contractor may come from a source outside the Federal 
Helium Reserve.
    Federal user means a Federal agency or extramural holder of one or 
more Federal research grants using helium.
    Helium storage contract means a contract between the BLM and a 
private entity allowing the private entity to store crude helium in 
underground storage at the Cliffside Field.
    HPA means the Helium Privatization Act of 1996, Public Law 104-273, 
110 Stat. 3315.
    HSA means the Helium Stewardship Act of 2013, Public Law 113-40, 
127 Stat. 534.
    Mcf means one thousand cubic feet of gas measured at standard 
conditions of 14.65 pounds per square inch atmosphere (psia) and 60 
degrees Fahrenheit.
    MMcf means one million cubic feet of gas measured at standard 
conditions of 14.65 psia and 60 degrees Fahrenheit.
    Non-Allocated Sale means a Phase A crude helium sale, under which 
crude helium is sold only to non-refiners.
    One-time sale means a sale of helium from amounts available in FY 
2016 offered by the BLM in FY 2014 under the HSA, 50 U.S.C. 
167d(b)(13).
    Person means any individual, corporation, partnership, firm, 
association, trust, estate, public or private institution, or state or 
political subdivision.
    Phase A means the allocation transition period prescribed in the 
HSA at 50 U.S.C. 167d(a).

[[Page 28541]]

    Phase B means the auction implementation period prescribed in the 
HSA at 50 U.S.C. 167d(b).
    Phase B auction means an auction of helium offered by the BLM 
during Phase B under the HSA, 50 U.S.C. 167d(b)(2).
    Phase B sale means a sale of helium offered by the BLM to refiners 
during Phase B under the HSA, 50 U.S.C. 167d(b)(1), after completion of 
an auction.
    Priority pipeline access means the first priority of delivery of 
crude helium under which the Secretary schedules and ensures the 
delivery of crude helium to a helium refinery through the Federal 
Helium System.
    Production capability means the estimated or calculated physical 
volume of helium that can be produced from the Cliffside Field.
    Qualifying domestic helium transaction means any agreement entered 
into or any renegotiated agreement during the preceding one-year period 
in the United States for the purchase or sale of at least 15,000,000 
standard cubic feet of crude or pure helium to which any holder of a 
contract with the BLM for the acceptance, storage, delivery, or 
redelivery of crude helium from the Federal Helium System is a party.
    Refiner means a person with the ability to take delivery of crude 
helium from the Federal Helium Pipeline and refine the crude helium 
into pure helium.
    Toll or tolling means the practice of a helium refiner processing 
or refining another party's helium at an agreed upon price. Refiners 
are required by the HSA (50 U.S.C. 167d(b)(8)(B)), as a condition of 
sale or auction, to make excess refining capacity of helium available 
at commercially reasonable rates to (i) Any person prevailing in 
auctions under section 167d(b)(2); and (ii) Any person who has acquired 
crude helium from the BLM from the Federal Helium Reserve by means 
other than an auction under section 167d(b)(2) after the date of 
enactment of the HSA, including non-allocated sales.
    Toller means a non-refiner that has an agreement with a refiner to 
process or refine helium.
    Tolling agreement means an agreement between a helium refiner and 
another party to process or refine the other party's helium.
    1.03 What is the purpose of sales and auctions? The BLM is 
implementing the HSA's statutory directives to sell helium from the 
Federal Helium Reserve to reduce the Reserve to a level of 
3,000,000,000 standard cubic feet (3,000,000 Mcf) of recoverable helium 
(not including privately stored helium) (50 U.S.C. 167d(b)(4)) and 
implement Phase D: Disposal of assets (50 U.S.C. 167d(d)) by September 
30, 2021.
    1.04 What is the estimated volume of helium available for sale, 
auction and delivery in each fiscal year? The BLM has created a graphic 
that illustrates the gradual reduction in the volume of helium that is 
expected to be produced from the Federal Helium Reserve by FY 2021, 
according to current geological modeling. The graphic can be viewed at 
www.blm.gov/nm/nitec. Based on that methodology, Table 1 identifies the 
volumes of helium to be offered for sale as part of Phase A under the 
HSA. Those sales are divided into allocated sales for the refiners 
(total 549,000 Mcf) and non-allocated sales for the non-refiners (total 
61,000 Mcf). Table 1 also identifies a substantial delivery of 
privately stored helium (556,600 Mcf), which was primarily the result 
of a delay in the initial FY 2014 offering of Federal crude helium for 
sale; approximately 408,000 Mcf of privately stored helium was 
delivered before the sale was held in January 2014. Table 2 provides 
the projected volume of helium in million cubic feet (MMcf) available 
according to current geological modeling and provides estimated annual 
volumes that will be offered, in accordance with Phase B of the HSA, 
for sale, auction and delivery during FY 2015 through FY 2021. Phase B 
sales are reserved for refiners, while the Phase B auction is open to 
all qualified bidders. Both Table 1 and Table 2 also reflect holding 
back 10 percent of the forecasted production capability as an 
engineering contingency to ensure that the BLM can meet any 
unanticipated emergency situations. Table 3 provides an estimate of 
total production capacity of the Cliffside Field broken into components 
(estimated sale volume and auction volume) and delivery of privately-
owned helium, as well as an estimate of the total production.

                       Table 1--Projected Volumes for Allocated Sale, Non-Allocated Sale and Private Storage Delivery for FY 2014
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                                               Forecasted         10%       In-kind       Total       Volume of    Allocated       Non-      Additional
                                               production     contingency    sales     production      private        sale      allocated      private
                                               capability   -------------------------   available      storage   -------------     sale        storage
                                              (NITEC study)                             for sale/     delivered               -------------   delivery
              Fiscal Year (FY)              ----------------                           auction or     prior to                             -------------
                                                                                        delivery    January 2014
                                                                  Mcf         Mcf    --------------     sale          Mcf          Mcf
                                                   Mcf                                             --------------                                Mcf
                                                                                           Mcf           Mcf
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FY 2014(1).................................  ..............  ............  .........  ............  ............      360,000       40,000  ............
FY 2014(2).................................       1,494,000       149,400    170,000     1,174,600       408,000      189,000       21,000       156,600
    Total FY 2014..........................  ..............  ............  .........  ............  ............      549,000       61,000  ............
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                             Table 2--Projected Volumes for Sales, Auctions and Private Storage Delivery for FY 2015-FY 2021
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                                      Forecasted        10%       In-kind       Total         80%        FY 2016      Phase B     Phase B        20%
                                      production    contingency    sales     production    available     one-time      sale       auction     available
                                      capability  -------------------------   available    for sale/       sale       volume      volume     for private
         Fiscal year  (FY)              (NITEC                                for sale/     auction     (conducted ------------------------    storage
                                        study)                                 auction   ------------- in FY 2014)                            delivery
                                    --------------      Mcf         Mcf    --------------             -------------     Mcf         Mcf    -------------
                                          Mcf                                    Mcf          Mcf          Mcf                                   Mcf
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FY 2015............................     1,320,160       132,016    170,000     1,018,144      814,515            0     733,064      81,452       203,629
FY 2016............................     1,158,150       115,815    170,000       872,335      697,868      250,000     273,401     174,467       174,467
FY 2017............................       997,450        99,745    170,000       727,705      582,164            0     349,298     232,866       145,541
FY 2018............................       848,280        84,828    170,000       593,452      474,762            0     213,643     261,119       118,690

[[Page 28542]]

 
FY 2019............................       714,430        71,443    170,000       472,987      378,390            0     113,517     264,873        94,597
FY 2020............................       606,130        60,613    170,000       375,517      300,414            0  ..........     300,414        75,103
FY 2021............................       537,880        53,788    170,000       314,092      251,274            0  ..........     251,274        62,818
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 Table 3--Summary of Total Sales, Auctions and Delivery Through FY 2021
------------------------------------------------------------------------
          Total Production                                    7,676,480
------------------------------------------------------------------------
Total Production...................  .....................     7,676,480
                                     Total Sales..........     2,542,923
                                     Total Auction Volume.     1,566,464
                                     Total In Kind Volume.     1,360,000
                                     Total Engineering           767,648
                                      Contingency.
Total Pre-HSA, Privately-Owned       .....................     1,439,445
 Helium to be Delivered.
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Phase B Sales and Auctions

    2.01 What volume of helium will the BLM offer under a Phase B 
auction for FY 2015? The BLM intends to offer 81,452 Mcf for auction in 
July 2014 for delivery in FY 2015.
    2.02 What will be the minimum Phase B auction price and minimum 
Phase B sales price, and how were those prices determined? We estimate 
the minimum Phase B auction price for FY 2015 to be $100 per Mcf based 
on Producer Price Index adjustments to the open market crude sales 
price for FY 2014 (absent a market survey). The BLM will calculate the 
2015 Phase B sales price using a weighted average of the average Phase 
B auction price (10%) and the adjusted FY 2014 helium sales price 
(90%).
    2.03 What volume of helium will the BLM offer under a Phase B sale 
for FY 2015? The FY 2015 volume of helium the BLM will offer for sale 
will be about 733 MMcf.
    2.04 What will be the price for the FY 2015 Phase B sale and how is 
that price determined? The FY 2015 Phase B sales price will be 
calculated using a weighted average methodology as follows:

FY 2015 Phase B Sales Price = (10% x AAP) + (90% x (100+APPI x $95.00))

    AAP is average auction price in dollars.
    APPI is the average Production Price Index for September 2013 
through March 2014.
    2.05 What volume will be sold for the FY 2016 one-time sale? The 
BLM intends to offer 250 MMcf for the FY 2016 one-time sale held in FY 
2014.
    2.06 What will be the price for the FY 2016 one-time sale and how 
was that price determined? The price for the FY 2016 one-time sale and 
the methodology will be the same as the Phase B sales price for FY 
2015.
    2.07 When will the sales and auctions occur? The BLM intends to 
offer helium in FY 2014 according to the following schedule:

June 9, 2014--Federal Register Auction Notice for FY 2015 Phase B 
auction; and, annual request for refiners to report excess refining 
capacity
June 23, 2014--Excess refining capacity to be reported to the BLM \1\
---------------------------------------------------------------------------

    \1\ Section 6(b)(8)(B) of the HSA, 50 U.S.C. 167d(b)(8)(B), 
states: ``(B) Condition.--As a condition of sale or auction to a 
refiner under subsection (a)(1) and paragraphs (1) and (2), 
effective beginning 90 days after the date of enactment of the 
Helium Stewardship Act of 2013, the refiner shall make excess 
refining capacity of helium available at commercially reasonable 
rates to--(i) any person prevailing in auctions under paragraph (2); 
and (ii) any person that has acquired crude helium from the 
Secretary from the Federal Helium Reserve by means other than an 
auction under paragraph (2) after the date of enactment of the 
Helium Stewardship Act of 2013, including nonallocated sales.''
---------------------------------------------------------------------------

June 30, 2014--FY 2015 Phase B auction held in Amarillo, Texas
July 1, 2014--FY 2015 Phase B auction results published on BLM Web site
July 3, 2014--Invitation for Offer released for FY 2015 Phase A sale 
and FY 2016 one-time sale
July 18, 2014--FY 2015 Phase B sale complete
July 21, 2014--FY 2015 Phase B sale results published
July 25, 2014--FY 2015 Phase B auction payments collected
July 28, 2014--FY 2016 one-time sale complete
August 1, 2014--FY 2016 one-time sale results published
September 11, 2014--FY 2016 one-time sale payments collected
September 26, 2014--FY 2015 Phase B sale payments collected

    June and July dates may change depending on timing of publication 
of Final Federal Register Auction Notice.
    2.08 What will be the Phase B auction format and who may 
participate? The auction will be a live auction, held in Amarillo, 
Texas. Anyone meeting the definition of a qualified bidder provided in 
Section 2.09 may participate in the auction. A pre-bid registration 
process will be specified in the Federal Register Auction Notice to be 
released to the public on June 9, 2014 (date subject to change).
    2.09 Who is qualified to purchase helium at Phase B auctions? A 
``qualified bidder'' is a person the Secretary determines is seeking to 
purchase helium for the person's own use, refining, or resale to users. 
Only qualified bidders may purchase helium at Phase B auctions. If the 
BLM determines that a person does not meet the requirements for a 
qualified bidder under the HSA, that person is not a qualified bidder 
for Phase B auctions, even if that person was determined to be a 
qualified bidder in the past.
    2.10 What are the helium lot sizes that will be available for the 
Phase B auctions? The BLM plans to auction lots consisting of 5 MMcf 
and 10 MMcf. Because volumes are not always going to be divisible by 5, 
there will be an odd lot that will range from 5 MMcf to 10 MMcf.
    2.11 How many helium lots does the BLM anticipate offering for the 
FY 2015

[[Page 28543]]

Phase B auction? The BLM anticipates auctioning 81,452 Mcf for FY 2015. 
That volume would be divided as follows:

(5) lots of 10 MMcf each
(5) lots of 5 MMcf each
(1) lot of 6,452 Mcf

    2.12 When will helium that is purchased or won at the FY 2015 Phase 
B auction be available to the buyers? The volumes will be transferred 
to buyers beginning on October 1, 2014, assuming payment in full has 
been received.
    2.13 What must I do to bid at auction? Detailed bidding 
instructions, including pre-bid registration, will be provided in the 
Auction Notices. The Auction Notice will contain information regarding 
the time and location of the auction, process for notification of 
winning bidders, payments, and how to make such payments.
    2.14 Who will be allowed to purchase helium in the Phase B sales? 
Only those who are refiners as defined in section 1.02 of this notice 
may purchase helium in the Phase B sales.
    2.15 How will the helium sold in Phase B sales be apportioned among 
the refiners? The apportionment to each refiner connected to the 
Federal Helium Pipeline will be based on its percentage share of the 
total refining capacity as of October 1, 2000.
    2.16 What will happen if one or more refiners request an amount 
other than the refiner's share of what is offered during a Phase B 
sale? If one or more refiners request less than the refiner's allocated 
share, any other refiner that requested more than its share will be 
allowed to purchase the excess volume based on proportionate shares of 
remaining refining capacities. Requests by crude helium refiners that 
are in excess of the amount available in the Phase B sale will not be 
considered.
    2.17 What will happen if the total amount requested by the crude 
helium refiners is less than the 733 MMcf offered in the FY 2015 Phase 
B sale? Any excess volume not sold to the refiners in the FY 2015 Phase 
B sale will be available in the next scheduled Phase B sale.
    2.18 Do you have a hypothetical example of how a Phase B sale would 
be conducted? Assume 1,000 MMcf would be available for sale.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Column A                            Column B     Column C     Column D      Column E      Column F      Column G      Column H
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Installed     Refiner                     Excess
                 Bidder--Allocated sale                     refining   bid  volume    Allocated      volume       Proration      Excess         Total
                                                            capacity        *         volume *     requested *     percent     allocated *   allocated *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Refiner A...............................................          10%          115           100            15           20%            15           115
Refiner B...............................................          50%          400           400             0            0%             0           400
Refiner C...............................................          40%          700           400           300           80%        80 + 5           485
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................         100%        1,215           900           315          100%           100         1,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
* All volumes in MMcf.

    After the initial allocation (Column D), Refiner B has received all 
volumes it requested (Column C). However, 315 MMcf (Column E (Column C-
Column D)) is deemed excess of the total in the first iteration of the 
Phase B sale and is therefore proportionally reallocated to Refiner A 
and Refiner C based on their remaining installed refining capacities 
(Column F). With the reallocation, Refiner A gets all the excess 
volumes it requested (Column E). After the second iteration, 5 MMcf 
remains unallocated and, without any other refiners, is awarded to 
Refiner C. Refiner C is still short by 215 MMcf. All percentages used 
in the calculation will be rounded to the nearest one-tenth of one 
percent. All volumes calculated will be rounded to the nearest 1 Mcf.

Delivery of Purchased Helium, Helium Won at Auction and Pre-HSA Helium

    3.01 When will I receive helium that I own from purchase in a sale, 
or successful auction bid, or that I have in a pre-HSA storage account? 
Helium bought, won at auction, or purchased will be delivered starting 
October 1 of each designated fiscal year based upon a prioritization 
schedule established by the BLM.
    3.02 How will the BLM prioritize delivery? In accordance with the 
HSA and existing helium storage contract language, the BLM has 
established the following prioritization for helium delivery:

(1) In-kind helium
(2) Phase B auctioned helium
(3) Phase A allocated/non-allocated and Phase B sold helium
(4) Pre-HSA purchased helium stored under a helium storage contract.

    3.03 How will the helium delivery prioritization work for refiners? 
The following methodology will be used to determine each refiner's 
share of the available helium for delivery through the Federal Helium 
System. The volume available to the refiners is described by the 
following equation:

MPC = (IKR + IKT) + (ACR + 
ACT) + ALR + ULT + PHSA
MPC--Monthly Production Capacity is the capacity available from the 
Crude Helium Enrichment Unit (CHEU) each month.
IKR--In-Kind Refiners is the monthly amount of planned In-
Kind helium sales to refiners to support Federal helium needs.
IKT--In-Kind Tollers is the monthly amount of planned In-
Kind helium sales to non-refiners requiring tolling services to support 
Federal helium needs.
IKR and IKT will be fulfilled at 100 percent 
capacity.
ACR--Auction Refiners is the monthly amount of planned 
auction-acquired helium sales to meet refiners' planned sales.
ACT--Auction Tollers is the monthly amount of planned 
auction-acquired helium sales to meet non-refiners' planned sales 
requiring tolling services.
ACR and ACT will be fulfilled at 100 percent 
capacity.
ALR--Allocated Refiners is the monthly amount of planned 
Phase A allocated sale-and Phase B sale-acquired helium to meet 
refiners' planned sales. Initial delivery schedule is based on the 
capacity percentage for each refiner per Article 2.7 of the helium 
storage contract.
ULT--Unallocated Tollers is the monthly amount of planned 
non-allocated sale-acquired helium (sold during the Phase A non-
allocated sales in FY 2014) to meet non-refiners' planned sales 
requiring tolling services.

    ALR and ULT will be fulfilled on a best 
efforts basis. If total planned sales from all requestors is in excess 
of MPC, ALR and ULT will be prorated based on 
refiner/non-refiner total helium in storage.

PHSA--Pre-Helium Stewardship Act is the monthly amount of helium

[[Page 28544]]

purchased before the HSA, remaining in storage. This helium will be 
delivered in proportion to each refiner's volume in storage up to 3 
percent each month.

    Each refiner will be allowed delivery of helium up to the 
prescribed amount calculated in ALR and PHSA. If a refiner 
receives more than allowed, the overage will be subtracted from the 
volume calculated to be delivered in the next calculation month. 
Amounts not delivered will not carry forward to the next calculation 
month. Refiners that provide tolling services to non-refiners for any 
of the non-refiners' helium will earn a 2 for 1 credit applied to the 
next calculation month determination of the refiner's ALR.
    3.04 Do you have a hypothetical example of how the Delivery 
Schedule would be implemented? An example of the process detailed in 
section 3.03 follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Refiner      Refiner        Toll
                                                                 Planned      Refiner     Toller  A     allowed       actual       actual    Carry  over
--------------------------------------------------------------------------------------------------------------------------------------------------------
Refiner A:
    In-Kind..................................................        2,000        2,000          500        2,500        1,990          500  ...........
    Auction..................................................        2,500        2,500          750        3,250        2,400          750  ...........
    Allocated................................................       30,080       30,080  ...........       30,080       25,000  ...........        2,500
    Pre-HSA Stored...........................................        1,567        1,567  ...........        1,567        1,500  ...........  ...........
Refiner B:
    In-Kind..................................................        2,000        2,000  ...........        2,000        2,100  ...........  ...........
    Auction..................................................          200          200  ...........          200          200  ...........  ...........
    Allocated................................................       45,119       45,119  ...........       45,119       46,000  ...........        (881)
    Pre-HSA Stored...........................................        1,791        1,791  ...........        1,791        1,791  ...........  ...........
Toller A:
    In-kind..................................................          500  ...........  ...........  ...........  ...........  ...........  ...........
    Auction..................................................          750  ...........  ...........  ...........  ...........  ...........  ...........
    Pre-HSA Stored...........................................  ...........  ...........  ...........  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In the example, Refiner A is receiving 4,500 Mcf of in-kind and 
auction helium, and refining for Toller A an additional 1,250 Mcf of 
Toller A's in-kind and auction helium. Refiner A also has 30,080 Mcf of 
allocated helium purchased at Phase A or Phase B sales and a percentage 
of its pre-HSA stored volume of 1,567 Mcf available for delivery. As a 
result of the 1,250 Mcf of tolling, Refiner A will get a 2,500 Mcf 
credit in the next calculation month determination for allowed 
allocated helium delivery. Refiner B is receiving 2,200 Mcf of in-kind 
and auction helium. It actually received 100 Mcf more of auction helium 
with no penalty. Since Refiner B did not toll any helium for a non-
refiner, it did not earn a subsequent tolling credit. However, Refiner 
B did overdraw its allowance of allocated helium by 881 Mcf. This 
overage will be deducted during the next calculation month. Toller A 
had its in-kind and auction helium refined. Not illustrated in the 
example is a circumstance where there is not enough monthly production 
capacity to meet refiner and toller planned helium delivery. When 
planned delivery exceeds available delivery capacity, the allocated 
helium delivery (after prior calculation month corrections) will be 
prorated based on refiner/non-refiner total helium in storage.

In-Kind Program

    4.01 What is the Federal In-Kind Program? Federal helium suppliers, 
who have contracts to supply helium to the Federal Government 
(agencies, government contractors, and universities with certified 
Federal grant numbers), are required to buy like amounts of helium from 
the Federal Helium Reserve. The supplied helium may originate from 
sources other than the Federal Helium Reserve. Replenishment of helium 
volumes provided to the government typically takes about 5 months to 
complete; however, the helium is sold to the suppliers at a discounted 
rate compared to open market rate.
    4.02 Who participates in the Program? Federal helium suppliers, 
Federal agencies and grant recipients participate in the Federal In-
Kind Program.
    4.03 How do I participate? You may be a participant in the Federal 
In-Kind Program if you are a supplier of pure helium and have entered 
into contracts to supply helium to the Federal Government; or you are a 
Federal agency requesting helium deliveries; or you are a Federal end 
user with a per location local volume of 200 Mcf per year and wish to 
participate in the In-Kind Program. Potential Federal end users/Federal 
grant recipients and universities are encouraged to register with the 
BLM at the provided Web page link: http://www.blm.gov/nm/helium.
    Before including your address, phone number, email address, or 
other personal identifying information in your comment, you should be 
aware that your entire comment--including your personal identifying 
information--may be made publicly available at any time. While you may 
ask us in your comment to withhold your personal identifying 
information from public review, we cannot guarantee that we will be 
able to do so.

    Authority:  The Helium Stewardship Act of 2013, Public Law 113-
40, codified to various sections in 50 U.S.C. 167-167q.

Jesse J. Juen,
State Director, New Mexico.
[FR Doc. 2014-11410 Filed 5-15-14; 8:45 am]
BILLING CODE 4310-FB-P