[Federal Register Volume 80, Number 113 (Friday, June 12, 2015)]
[Notices]
[Pages 33548-33550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14487]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[LLNM006200 L99110000.EK0000 XXX L4053RV]


Notice of Proposed Action: Crude Helium Sale and Auction for 
Fiscal Year 2016 Delivery

AGENCY: Bureau of Land Management, Interior.

ACTION: Notice.

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SUMMARY: The purpose of this action is to inform the public that the 
Department of the Interior, Bureau of Land Management (BLM), will 
conduct a Phase B sale and auction of crude helium for Fiscal Year (FY) 
2016 delivery. For purposes of the Phase B sale, the BLM is seeking 
comments regarding the methods BLM should use to arrive at the sale 
price of the helium; the auction format BLM should follow in selling 
helium; who will be allowed to purchase helium; and the process BLM 
should follow for allocating helium.

DATES: Comments regarding the helium sale and auction must be received 
by the BLM on or before July 13, 2015.

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.

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FOR FURTHER INFORMATION CONTACT: Robert Jolley, Amarillo Field Manager, 
at 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. You will receive a reply during normal business hours.

SUPPLEMENTARY INFORMATION:
    Background: In October 2013, Congress passed the Helium Stewardship 
Act of 2013 (the ``Act''), Public Law 113-40. Beginning in FY 2014, the 
Act requires the Department of the Interior, through the BLM Director, 
to offer for sale and auction annually a portion of the helium reserves 
owned by the United States and stored underground in the Cliffside Gas 
Field, which is near Amarillo, Texas. 50 U.S.C. 167d(b).
    On July 22, 2014, the BLM published a ``Final Notice for 
Implementation of Helium Stewardship Act Sales and Auctions'' in the 
Federal Register, (79 FR 42808) (``2014 Final Notice''). The 2014 Final 
Notice contained information about the Act, definitions of terms used 
in the Notice, the reasons for the action, and a process for conducting 
the auctions and sales in FY 2014. The 2014 Final Notice is available 
at the BLM helium operations Web site at: http://www.blm.gov/nm/helium.
    Comments requested: The BLM is specifically seeking comments on 
elements of the FY 2016 sale and auction that differ from the process 
described the 2014 Final Notice. These include:
    a. The process for arriving at the price for helium to be sold at 
the Phase B auction and sale, as described in section 1.01 of this 
Notice;
    b. The format of the auction, as described in section 1.04 of this 
Notice;
    c. Who will be allowed to purchase helium in the FY 2016 Phase B 
sale, as described in section 2.01 of this Notice; and
    d. The process for allocating helium for the FY 2016 Phase B sale, 
as described in section 2.02 of this Notice.
    Any comments regarding the sale or auction will be reviewed by the 
BLM State Director or other authorized official of the Department of 
the Interior, who may sustain, vacate, or modify the sale or auction. 
After consideration of comments on this notice and comments on a 
proposed new form of the helium storage contract, the BLM will publish 
a final notice of the FY 2016 sale and auction. 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.
    Volumes Offered in the FY 2016 Helium Auction and Sale: Table 1 
identifies the volumes to be offered for auction and sale in FY 2015 
for FY 2016 delivery.

                                      Table 1--Projected Volumes for Phase B Auction and Sale for FY 2016 Delivery
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                                                                            Total remaining
                                      Forecasted         In-kind sales        production                          Previously sold in
        Fiscal year (FY)              production       (sales to Federal  available for sale/  Volume available    FY 2014 Advanced    Volume available
                                   capability (NITEC        users)            auction or          for auction            sale              for sale
                                        study)                                 delivery
MMcf *                                         MMcf                MMcf                MMcf                MMcf                MMcf                MMcf
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FY 2016 * *.....................              1,310                 160               1,150           * * * 300         * * * * 250                 600
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* MMcf means one million cubic feet of gas measured at standard conditions of 14.65 per square inch atmosphere (psia) and 60 degrees Fahrenheit.
* * Delivery for FY 2016 sales and auctions will be subject to a new storage contract beginning October 1, 2015.
* * * 25% of total production capacity after deducting In-Kind (rounded).
* * * * In accordance with the Act, 250 MMcf of FY 2016 volumes were offered in FY 2014.

FY 2016 Helium Auction

    1.01 What is the minimum FY 2016 Phase B auction price and minimum 
FY 2016 Phase B sales price, and how were those prices determined? 
Under the Act (50 U.S.C. 167d(b)), there are two occasions when helium 
is sold in Phase B: A public auction for qualified bidders (``Phase B 
auction'') and a sale of helium to persons who have the ability to 
accept delivery of crude helium from the Federal Helium System (``Phase 
B sale'').
    The minimum FY 2016 Phase B auction reserve price is $100 per Mcf 
(one thousand cubic feet of gas measured at standard conditions of 
14.65 psia and 60 degrees Fahrenheit). The BLM will calculate the FY 
2016 Phase B sale price using the weighted average price of the crude 
helium sold in the FY 2016 Phase B auction. If there are no successful 
sales during the FY 2016 Phase B auction, all helium volume offered in 
the auction will be added to the Phase B sale at a market-based survey 
price or calculated average price under 50 U.S.C. 167d (b)(7)(B) or 
(C), respectively.
    1.02 What will happen to the helium offered but not sold in the 
helium auction? Any volume of helium offered but not sold in the FY 
2016 Phase B auction will be added to the 600 MMcf available for sale 
and will be offered for sale in the FY 2016 Phase B sale.
    1.03 When will the sale and auction take place? The BLM intends to 
offer helium for FY 2016 according to the following tentative schedule. 
This schedule may be adjusted based upon the timing of the required 
notices and complexity of comments received.

August 18, 2015 FY 2016 Phase B helium auction held in Amarillo, Texas
August 19, 2015 FY 2016 Phase B helium auction results published on the 
BLM Web site
August 24, 2015 Phase B Helium Sale
September 30, 2015 Revenues from auction and sale due to the BLM

    1.04 What is the auction format? The auction will be a live 
auction, held at the Amarillo Field Office in Amarillo, Texas. The 
procedures for the auction and the pre-bid qualification form will be 
available after publication of a Final Notice. The Final Notice will 
include a web link. Please call BLM at 806-356-1001 if you have any 
questions relating to the auction.
    1.05 Who is qualified to purchase helium at the Phase B auction? 
Only ``qualified bidders,'' as defined in 50 U.S.C. 167(9), may 
participate in and purchase helium at the Phase B auction. The BLM will 
make the final determination of who is a qualified bidder using the 
Act's definition of a

[[Page 33550]]

qualified bidder, regardless of whether or not that person was 
previously determined to be a qualified bidder.
    1.06 How many helium lots does the BLM anticipate offering at the 
FY 2016 Phase B auction? The BLM anticipates auctioning 300 MMcf in a 
total of 18 lots for FY 2016. The lots would be divided as follows:

(8) lots of 25 MMcf each
(5) lots of 15 MMcf each
(5) lots of 5 MMcf each

    1.07 What must I do to bid at auction? The BLM will describe the 
live auction procedures, including detailed bidding instructions and 
pre-bid registration requirements, on its Web page at a web link that 
will be included in the Final Notice. The Final 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.
    1.08 When will helium that is purchased at sale or won at auction 
be available in the purchaser's storage account? The BLM will transfer 
the volumes purchased in the FY 2016 Phase B auction and sale to the 
buyers' storage accounts beginning on the first day of the month 
following receipt of payment.

FY 2016 Phase B Helium Sale

    2.01 Who will be allowed to purchase helium in the FY 2016 Phase B 
sale? Any person (including individuals, corporations, partnerships, or 
other entities) with the ability to accept delivery of crude helium 
from the Federal Helium Pipeline (as defined in 50 U.S.C. 167(2)) may 
purchase helium in the FY 2016 Phase B sale.
    2.02 How will the helium sold in the FY 2016 Phase B sale be 
allocated among the persons with the ability to take helium? Any person 
desiring to participate in the FY 2016 Phase B sale needs to report its 
excess refining capacity and operational capacity by August 14, 2015 
using the Excess Refining Capacity form, which can be downloaded at 
http://www.blm.gov/nm/heliumreporting. Each person participating in the 
sale will then be allocated a proportional share based upon that 
person's operational capacity.
    2.03 How does a person apply for access to the Federal Helium 
Pipeline for the purpose of taking crude helium? The steps for taking 
crude helium are provided in the BLM's Helium Operations Web site at 
http://www.blm.gov/nm/helium. Reporting forms show the due dates for 
each report, and can be found at http://www.blm.gov/nm/heliumreporting. 
The length of time required to apply for and obtain access to the 
Federal Helium Pipeline will vary based on the person's plans for plant 
construction, pipeline metering installation, and other variables. The 
BLM is available to provide technical assistance, including contact 
information for applying for access and meeting any applicable National 
Environmental Policy Act requirements.
    2.04 What will happen if one or more persons request an amount 
other than the person's share of the volume offered for sale? If one or 
more persons requests less than its share or their shares, any other 
person(s) that request(s) more than its share or their shares will be 
allowed to purchase the excess volume based on the proportionate shares 
of operational capacity of all persons requesting more than their 
initial shares.
    2.05 What will happen if the total amount requested by persons is 
less than the 600 MMcf offered in the FY 2016 Phase B sale? Any excess 
volume not sold in the FY 2016 Phase B sale will be available for 
future sale or auction.
    2.06 Do you have a hypothetical example of how the FY 2016 Phase B 
Sale would be conducted? A hypothetical example of how the Phase B Sale 
will be conducted is available at the Helium Operations Web site at: 
http://www.blm.gov/nm/helium.

Delivery of Helium in FY 2016

    3.01 When will I receive helium that I purchase in a sale or win 
based on a successful auction bid? Helium purchased at the FY 2016 sale 
or won at the FY 2016 auction will be delivered starting October 1, 
2015, in accordance with the crude helium storage contract. The intent 
is to ensure delivery of all helium purchased at sale or auction up to 
the BLM's production capability for the year.
    3.02 How will the BLM prioritize delivery? The Act, at 50 U.S.C. 
167d(b)(1)(D) and (b)(3), gives priority to Federal In-Kind helium 
(i.e., helium sold to Federal users). After meeting that priority, the 
BLM will make delivery on a reasonable basis, as described in the crude 
helium storage contract, to ensure storage contract holders who have 
purchased or won helium at auction have the opportunity during the year 
to have that helium produced or refined in monthly increments.

Background Documents

    Supplementary documents referenced in this Notice are available at 
the BLM helium operations Web site at: http://www.blm.gov/nm/helium, 
and include the following:
    a. Table of Projected Volumes for Sales and Auctions for Delivery 
for FY 2017-FY 2021 (informational);
    b. Hypothetical example of how the FY 2016 Phase B Sale would be 
conducted (informational);
    c. The Helium Stewardship Act of 2013, 50 U.S.C. 167;
    d. FY 2014 Helium Auction Notice;
    e. Helium Storage Contract; and
    f. Required forms for helium reporting.

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

Sheila K. Mallory,
Acting State Director.
[FR Doc. 2015-14487 Filed 6-11-15; 8:45 am]
 BILLING CODE 4310-FB-P