[Federal Register Volume 81, Number 128 (Tuesday, July 5, 2016)]
[Notices]
[Pages 43635-43636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15754]



[[Page 43635]]

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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[LLNM006200 L99110000.EK0000 XXX L4053RV]


Notice of Crude Helium Auction and Sale for Fiscal Year 2017 
Delivery

AGENCY: Bureau of Land Management, Interior.

ACTION: Notice.

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SUMMARY: The Secretary of the Interior (Secretary), through the Bureau 
of Land Management (BLM) New Mexico State Office, is issuing this 
Notice to conduct an auction and sale from the Federal Helium Program, 
administered by the BLM New Mexico Amarillo Field Office. The Helium 
Stewardship Act of 2013 (HSA) (Pub. L. 113-40) requires the BLM to 
conduct an annual auction and sale of crude helium. Accordingly, the 
BLM will use the auction and sale process established in 79 FR 42808, 
dated July 23, 2014, and further refined in 80 FR 51304, dated August 
24, 2015.

DATES: Effective on July 5, 2016.

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:

A. Purpose and Background

    In October 2013, Congress passed the HSA. The HSA requires the 
Department of the Interior, through the BLM Director, to offer for 
auction and sale annually a portion of the helium reserves owned by the 
United States and stored underground at the Cliffside Gas Field, near 
Amarillo, Texas.
    On July 23, 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 HSA, definitions of terms used 
in the Notice, the reasons for the action, and a process for conducting 
the auctions and sales in FY 2014.
    On August 24, 2015, the BLM published a ``Notice of Final Action: 
Crude Helium Sale and Auction for Fiscal Year 2016 Delivery'' in the 
Federal Register (80 FR 51304) (2015 Final Notice). The 2015 Final 
Notice refined the process the BLM used in 2014 for conducting the 
auction and sale of crude helium. The BLM will use the process set 
forth in the 2015 Final Notice for the auction and sale of crude helium 
to occur in FY 2016 for FY 2017 delivery.
    Both the 2014 and 2015 Final Notices are available at the BLM 
helium operations Web site at: http://www.blm.gov/nm/helium.

B. Volumes Offered in the FY 2017 Helium Auction and Sale

    Table 1 identifies the volumes to be offered for auction and sale 
in FY 2016 for FY 2017 delivery.

                                          Table 1--Projected Volumes for Auction and Sales for FY 2017 Delivery
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                                                                                               Total
                                                            Forecasted    In-kind  sales     remaining                        Volume
                                                            production       (sales to      production        Volume      available  for      Volume
                    Fiscal year (FY)                        capability        Federal     available  for  available  for  non- allocated  available  for
                                                           (NITEC study)      users)       sale/ auction      auction           sale           sale
                                                                                           or  delivery
                                                                  MMcf *            MMcf            MMcf            MMcf            MMcf            MMcf
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2017 **..............................................           1,160             160           1,000         *** 400              60             540
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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 2017 sales and auctions will be subject to the new storage contract that began October 1, 2015.
*** 40% of total production capacity after deducting In-Kind (rounded).

C. FY 2017 Helium Auction

    1.01 What is the minimum FY 2017 auction price and the FY 2017 
sales price? The minimum FY 2017 auction 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 announce the FY 2017 sale 
price after the auction has concluded, and the BLM completes its 
analysis of the auction information. The BLM will use this information 
to publish the crude helium price for FY 2017. The BLM publishes this 
crude helium price, effective October 1, 2016, in order to provide a 
consistent index to the world-wide helium market.
    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 
2017 auction, will be added to the helium available for sale and will 
be offered in the FY 2017 sale.
    1.03 When will the auction and sale take place? The BLM will offer 
helium for FY 2017 according to the following schedule:

July 20, 2016 FY 2017 helium auction held in Amarillo, Texas
July 21, 2016 FY 2017 helium auction results published on the BLM Web 
site
July 25, 2016 Invitation for offers (IFO) posted for helium sale
August 19, 2016 Bids due from IFO
August 25, 2016 Award announcements published on the BLM Web site
August 26, 2016 Invoices sent on or before; payments due 30 days from 
invoice

    1.04 What is the auction format? The auction will be a live 
auction, held in the main conference room of the Amarillo Field Office 
at 1:00 p.m. central time, on July 20, 2016. The address is 801 South 
Fillmore, Suite 500, Amarillo, TX 79101. Anyone meeting the HSA 
definition of a qualified bidder may participate in the auction. The 
logistics for the auction and the pre-bid qualification form is 
included in a document entitled, ``Auction Guide'' at www.blm.gov/nm/helium2017. Questions related to the auction can be submitted by phone 
to the BLM at 806-356-1001.
    1.05 Who is qualified to purchase helium at the auction? Only 
qualified bidders, as defined in 50 U.S.C. 167(9), may participate in 
and purchase helium at the auction. The BLM will make the final 
determination of who is a qualified bidder using the HSA's definition 
of a qualified bidder, regardless of whether or not that person was 
previously determined to be a qualified bidder.

[[Page 43636]]

    1.06 How many helium lots does the BLM anticipate offering at the 
FY 2017 auction? The BLM anticipates auctioning 400 MMcf in a total of 
24 lots for FY 2017. The lots would be divided as follows:

10 lots of 25 MMcf each;
8 lots of 15 MMcf each; and
6 lots of 5 MMcf each.

    1.07 What must I do to bid at auction? The BLM has described the 
live auction procedures, including detailed bidding instructions and 
pre-bid registration requirements, in a document entitled, ``FY 2017 
Auction Notice and Guide'' at www.blm.gov/nm/helium2017.
    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 2017 auction and sale to the buyer's 
storage accounts beginning on the first day of the month following 
receipt of payment.

D. FY 2017 Helium Sale

    2.01 Who will be allowed to purchase helium in the FY 2017 sale? 
The crude helium sale will be separated into two distinct portions, a 
non-allocated portion and an allocated portion. The non-allocated 
portion will be ten percent of the total amount offered for sale for FY 
2017, and will be available to those storage contract holders, as of 
June 30, 2016, who do not have ability to accept delivery of crude 
helium from the Federal Helium Pipeline (as defined in 50 U.S.C. 
167(2)). The allocated portion will be ninety percent of the total 
amount offered for sale for FY 2017, and will be available to 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)).
    2.02 How will helium sold in the FY 2017 sale be allocated among 
those participating in the non-allocated sale? The non-allocated sale 
will be made available to all qualified offerors not eligible to 
participate in the allocated sales. The minimum volume that can be 
requested is 1 MMcf. The total volume available for the non-allocated 
portion of the sale is 40 MMcf. Any volumes not sold at auction will be 
distributed between the non-allocated (10 percent) and the allocated 
sale (90 percent). Any volumes not purchased at the non-allocated sale 
will be sold in the allocated portion.
    2.03 How will the helium sold in the FY 2017 sale be allocated 
among the persons to accept delivery of crude helium from the Federal 
Helium Pipeline? Any person wishing to participate in the allocated 
portion of the FY 2017 sale needs to report its excess refining 
capacity and operational capacity by June 30, 2016, using the Excess 
Refining Capacity form, which can be downloaded at: http://www.blm.gov/nm/heliumreporting, or in a link entitled ``Required Forms for Helium 
Reporting'' at www.blm.gov/nm/helium2017. Each person participating in 
the sale will then be allocated a proportional share based upon that 
person's operational capacity.
    2.04 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 in a 
document entitled, ``How to Set Up a Storage Account and Pipeline 
Access'' at http://www.blm.gov/nm/helium2017. Reporting forms show the 
due dates for each report, and can be found in a document entitled, 
``Required Forms for Helium Reporting'' at www.blm.gov/nm/helium2017. 
The length of time required to apply for and obtain access to the 
Federal Helium Pipeline 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.

E. Delivery of Helium in FY 2017

    3.01 When will I receive the helium that I purchase in a sale or 
win based on a successful auction bid? Helium purchased at the FY 2017 
sale or won at the FY 2017 auction will be delivered starting October 
1, 2016, 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 HSA gives priority 
to Federal in-kind helium (i.e., helium sold to Federal users) (50 
U.S.C. 167d(b)(1)(D)) and (b)(3)). 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.

F. Background Documents

    Supplementary documents referenced in this Notice are available at 
the BLM helium operations Web site at: http://www.blm.gov/nm/helium2017, and include the following:
    a. The HSA (50 U.S.C. 167);
    b. FY 2017 Helium Auction Notice and Guide;
    c. Table of Projected Volumes for Sales and Auctions for Delivery 
for FY 2017-FY 2021 (informational);
    d. Hypothetical example of how the FY 2017 Allocated Sale would be 
conducted (informational);
    e. Hypothetical example of how the FY 2017 Non-Allocated Sale would 
be conducted (informational);
    f. Schedule for Helium Auction and Sale;
    g. How to Set Up a Storage Account and Pipeline Access;
    h. 2016 Reference Helium Storage Contract (informational); and
    i. Required Forms for Helium Reporting.

    Authority:  The HSA of 2013 (Public Law 113-40) codified to 
various sections in 50 U.S.C. 167-167q.

Aden Seidlitz,
Associate State Director.
[FR Doc. 2016-15754 Filed 7-1-16; 8:45 am]
 BILLING CODE 4310-FB-P