[Federal Register Volume 83, Number 121 (Friday, June 22, 2018)]
[Notices]
[Pages 29131-29134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13469]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[LLNM006200 L99110000.EK0000 XXX L4053RV]


Crude Helium Auction and Sale for Fiscal Year 2019 Delivery

AGENCY: Bureau of Land Management, Interior.

ACTION: Notice of auction and sale.

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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

[[Page 29132]]

BLM New Mexico, Amarillo Field Office. The Helium Stewardship Act of 
2013 (HSA) requires the BLM to conduct an annual auction and sale of 
crude helium. The BLM will use the auction and sale process that was 
established for a previous sale in a Federal Register notice dated June 
20, 2017.

DATES: The schedule for the auction and sale process is:

July 18, 2018--FY 2019 helium auction held in Amarillo, Texas
July 20, 2018--FY 2019 helium auction results published on the BLM 
website
July 25, 2018--Invoices for auction sent on or before this date; 
payments due 30 days from invoice
July 27, 2018--Invitation for offers (IFO) posted for helium sale
August 3, 2018--Bids due from IFO
August 6, 2018--Award announcements published on the BLM website
August 10, 2018--Invoices for sale sent on or before; payments due 30 
days from invoice
September 30, 2018--Helium transferred to buyers' storage accounts

If a high bidder does not submit its payment for helium won at auction 
by September 15, 2018, volumes will be offered for sale proportionally 
to the bidders who participated in the Conservation Helium Sale, but 
who did not receive their requested volume of helium.

ADDRESSES: The July 18, 2018, helium auction will be held in the main 
conference room of the Amarillo Field Office, 801 South Fillmore, Suite 
500, Amarillo, TX 79101. Supplementary documents referenced in this 
Notice are available at the BLM helium operations website at: 
www.blm.gov/programs/energy-and-minerals/helium, see the Helium 
Stewardship, HSA Implementation page of the website.

FOR FURTHER INFORMATION CONTACT: Samuel R.M. Burton, Amarillo Field 
Manager, telephone: 806-356-1000, email: <a href="/cdn-cgi/l/email-protection#285b4a5d5a5c4746684a4445064f475e"><span class="__cf_email__" data-cfemail="3f4c5d4a4d4b50517f5d535211585049">[email protected]</span></a>. Persons who 
use a telecommunications device for the deaf (TDD) may call the Federal 
Relay Service (FRS) at 1-800-877-8339. The FRS 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 Final Notices 
for FY 2015 and FY2016 further refined the process the BLM used in FY 
2017 for conducting the auction and sale of crude helium. The BLM will 
use the process set forth in the June 20, 2017 Final Notice (82 FR 
28090) for the auction and sale of crude helium to occur in FY 2018 for 
FY 2019 delivery.
    All previous Final Notices are available from the Helium 
Stewardship, HSA Implementation page of the BLM helium website at 
www.blm.gov/programs/energy-and-minerals/helium.

B. Volumes Offered in the FY 2019 Helium Auction and Sale

    Table 1 identifies the volumes to be offered for auction and sale 
in FY 2018 for FY 2019 delivery.

                                          Table 1--Projected Volumes for Auction and Sales for FY 2019 Delivery
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Forecasted     In-kind sales    Total remaining        Volume           Volume           Volume
                                                     production       (sales to         production      available for    available for    available for
                                                     capability     federal users)    available for        auction       non-allocated         sale
                Fiscal year (FY)                   (NITEC study)  -----------------  sale/auction or  -----------------       sale      ----------------
                                                 -----------------                       delivery                      -----------------
                                                                         MMcf      -------------------       MMcf                              MMcf
                                                       MMcf *                              MMcf                               MMcf
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2019.........................................             825              130            345 ***           240 **               10               95
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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.
** 70 percent of total production capacity after deducting in-kind (rounded).
*** Volumes offered fulfill the requirement of the HSA to reach Phase C.

C. FY 2019 Helium Auction

    1.01 What is the minimum FY 2019 auction price and the FY 2019 
sales price? The minimum FY 2019 auction price is $110 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 2019 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 2019. The BLM publishes this 
crude helium price, effective October 1, 2018, 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 
2019 auction, will be added to the helium available for sale and will 
be offered in the FY 2019 sale.
    1.03 When will the auction and sale take place? The BLM will offer 
helium for FY 2019 according to the following schedule:

July 18, 2018--FY 2019 helium auction held in Amarillo, Texas
July 20, 2018--FY 2019 helium auction results published on the BLM 
website
July 25, 2018--Invoices for auction sent on or before this date; 
payments due 30 days from invoice
July 27, 2018--Invitation for offers (IFO) posted for helium sale
August 3, 2018--Bids due from IFO
August 6, 2018--Award announcements published on the BLM website
August 10, 2018--Invoices for sale sent on or before; payments due 30 
days from invoice
September 30, 2018--Helium transferred to buyers' storage accounts (in 
accordance with Section 1.08)

If the high bidder does not submit its payment for helium won at 
auction by September 15, 2018, volumes will be offered for sale 
proportionally to the bidders who participated in the Conservation 
Helium Sale, but who did

[[Page 29133]]

not receive their requested volume of helium.
    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 p.m. Central Time, on July 19, 2018. 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, ``FY 2019 Helium Auction Notice and 
Guide'' on the Helium Stewardship page of the BLM Helium Program 
website at www.blm.gov/programs/energy-and-minerals/helium. Questions 
related to the auction can be submitted by phone to the BLM at 806-356-
1000.
    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.
    1.06 How many helium lots does the BLM anticipate offering at the 
FY 2019 auction? The BLM anticipates auctioning 240 MMcf in a total of 
14 lots for delivery in FY 2019. The lots would be divided as follows:
    6 lots of 25 MMcf each; and
    5 lots of 15 MMcf each; and
    3 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 2019 
Auction Notice and Guide'' available on the BLM's helium page at 
www.blm.gov/programs/energy-and-minerals/helium. The ``FY 2019 Auction 
Notice and Guide'' is located in the Helium Stewardship, HSA 
Implementation page of the BLM Federal Helium Program website.
    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 won in the FY 2019 auction or purchased at the FY 2019 sale 
to the buyer's storage accounts on September 30, 2018.

D. FY 2019 Helium Sale

    2.01 Who will be allowed to purchase helium in the FY 2019 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 
2019, and will be available to those storage contract holders who do 
not have the ability to accept delivery of crude helium from the 
Federal Helium Pipeline (as defined in 50 U.S.C. 167(2)) as of May 30, 
2018. The allocated portion will be 90 percent of the total amount 
offered for sale for FY 2019, 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 2019 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 10 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 2019 sale be allocated 
among the persons who have operational capacity to accept delivery of 
crude helium from the Federal Helium Pipeline? Any person wishing to 
participate in the allocated portion of the FY 2019 sale needs to 
report its excess refining capacity and operational capacity a minimum 
of 14 calendar days prior to the sale, using the Excess Refining 
Capacity form. The form can be downloaded at www.blm.gov/programs/energy-and-minerals/helium. The form is located in the Helium 
Stewardship, HSA Implementation page of the website. 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 website at 
www.blm.gov/programs/energy-and-minerals/helium. The steps are 
contained in a document entitled, ``How to Establish a Storage Contract 
and Pipeline Connection Point,'' located in the Federal Helium 
Operations/Helium Storage page of the website. Reporting forms can be 
downloaded at the same website address. Reporting forms are located in 
the Helium Stewardship, HSA Implementation page of the BLM Federal 
Helium Program website, and show the requirements and due dates for 
each report. The length of time required to apply for and obtain access 
to the Federal Helium Pipeline can 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 2019

    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 2019 
sale or won at the FY 2019 auction will be delivered starting September 
30, 2018, 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 helium at sale 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 website at: www.blm.gov/programs/energy-and-minerals/helium. They are located in the Helium Stewardship, HSA 
Implementation page of the website, and include the following 
documents:
    a. This Federal Register Notice for FY 2019 Delivery;
    b. The HSA (50 U.S.C. 167);
    c. FY 2019 Helium Auction Notice and Guide;
    d. 2016 Storage Contract (template for information only);
    e. Determination of Fair Market Value Pricing of Crude Helium;
    f. Storage Fees;
    g. Required Forms for Helium Reporting; and
    h. FY 2014 through FY 2018 Federal Register Notices for Helium 
Auctions and Sales.


[[Page 29134]]


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

Aden L. Seidlitz,
Bureau of Land Management, Acting State Director, New Mexico.
[FR Doc. 2018-13469 Filed 6-21-18; 8:45 am]
 BILLING CODE 4310-FB-P


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