Helium is an inert element that occurs naturally in gaseous form and has a variety of uses because of its unique physical and chemical characteristics.point of any element, and, as the second lightest element, gaseous For example, helium has the lowest melting and boiling helium is much lighter than air. Certain natural gas fields contain a relatively large amount of naturally occurring helium, which can be recovered as a secondary product. The helium is separated from the natural gas and stored in a concentrated form that is referred to as crude helium because it has yet to go through the final refining process. The federal helium program is currently managed by Interior’s BLM. As of September 30, 2013, there were about 10.84 billion cubic feet of crude helium in storage—roughly 9 billion cubic feet owned by the government, and the rest is owned by private companies. After private companies— refiners or nonrefiners—purchase helium from BLM and pay for it, the official ownership of the helium is transferred from BLM to the company on the first day of the month after payment is received, and it becomes part of the privately owned inventory in storage. BLM stores and then delivers the privately owned helium through the pipeline to refiners in accordance with the storage contracts between BLM and the private companies. As of July 1, 2014, BLM held storage contracts with 10 companies: 4 refiners, 4 nonrefiners, and 2 companies that do not store helium in the reserve but are connected to the pipeline in order to transport helium from private natural gas fields to the 4 refiners also connected to the pipeline. According to a U.S. Geological Survey report, in 2013, helium produced from the reserve represented about 40 percent of the total estimated production of helium in the United States and about 30 percent of the total estimated production worldwide. The Helium Stewardship Act of 2013 significantly changed the federal helium program. For example, the act: Establishes four phases for the sale and auction of crude helium from, and eventual closure of, the reserve—Phase A: allocation transition; Phase B: auction implementation; Phase C: continued access for federal users; and Phase D: disposal of assets. Phase D is to be completed no later than September 30, 2021. 50 U.S.C. §§ 167d(a)-(d). Establishes a minimum quantity of crude helium that BLM is required to offer for sale or auction each fiscal year in Phases A, B, and C. Specifically, the amount of crude helium to be offered must be the lesser of (1) the quantity of crude helium offered for sale by the Secretary of the Interior during fiscal year 2012 or (2) the maximum total production capacity of the federal helium system, which includes the pipeline. 50 U.S.C. § 167d(f). We refer to this as the act’s minimum quantity requirement. Requires BLM to annually establish, as applicable, separate sale and minimum auction prices for Phase A and Phase B using, if applicable, and in the following order of priority: (1) the sale price of crude helium in BLM auctions; (2) price recommendations and disaggregated data from a qualified, independent third party who has no conflict of interest and conducted a confidential survey of qualifying domestic helium transactions; (3) the volume-weighted average price of all crude helium and pure helium purchased, sold, or processed by persons in all qualifying domestic helium transactions; or (4) the volume- weighted average cost of converting gaseous crude helium into pure helium. 50 U.S.C. § 167d(b)(7). We refer to this as the act’s price- setting provision. Requires BLM to require all persons that have storage contracts with BLM for privately owned helium in the reserve to disclose, on a strictly confidential basis, (1) the volumes and associated prices of all crude and pure helium purchased, sold, or processed by persons in qualifying domestic helium transactions; (2) the volumes and associated costs of converting crude helium into pure helium; and (3) refinery capacity and future capacity estimates. 50 U.S.C. § 167d(b)(8)(A). We refer to this as the act’s disclosure requirement. Establishes a condition for Phase A sales and Phase B sales and auctions to refiners. Specifically, as a condition of sale or auction to a refiner under Phase A sales and Phase B, the refiner must make excess refining capacity of helium available at commercially reasonable rates to persons who acquire helium from BLM after the act’s enactment. 50 U.S.C. § 167d(b)(8)(B). According to the act’s legislative history, this condition was intended to maximize participation in helium sales. The act does not define excess refining capacity or commercially reasonable rates. We refer to this condition as the act’s tolling provision. Since the Helium Stewardship Act of 2013 was enacted in October 2013, BLM has taken a number of actions to begin implementing the act, including (1) estimating volumes of helium that can be produced from the reserve each fiscal year, (2) preparing for and conducting Phase A helium sales, and (3) initiating planning for Phase B sales and auctions. Before BLM could determine how much helium it would sell or auction in each phase, the agency first estimated the volumes of crude helium that can be produced from storage in the reserve. As helium is produced, and the amounts remaining in storage continue to decrease, the helium becomes increasingly difficult to extract. Because of this dynamic, BLM used a geologic model to identify the most efficient way to produce the remaining helium from storage. Table 1 shows the results of BLM’s modeling efforts with the estimated amounts expected to be produced from the reserve by fiscal year, reflecting the reduced volumes that BLM expects will be produced over time. In comparison, BLM offered 2,100 million cubic feet of crude helium for sale in each of fiscal years 2012 and 2013, the same amount it had offered for sale annually since fiscal year 2004. BLM has taken a number of actions to implement multiple provisions of the act regarding Phase A (see fig. 1). The act requires BLM to offer crude helium for sale in Phase A in such quantities and under such terms as BLM determines necessary to carry out Phase A with minimum market disruption, in addition to meeting the act’s minimum quantity requirement. Under Phase A, BLM prepared for and conducted sales by determining sales volumes, setting the sale price, and implementing the act’s disclosure requirement, among other things. BLM offered for sale a total of 610 million cubic feet of helium in two different Phase A sales—one in January 2014 and one in May 2014. BLM officials said that they did not hold the first Phase A sale until January 2014 because they needed time to interpret the new act and develop the fiscal year 2014 sale price. In the first quarter of fiscal year 2014, BLM continued delivering helium to the refiners from their private storage balances. According to BLM officials, they considered limiting the total Phase A sales to the 400 million cubic feet sold in January 2014 so they could deliver more privately stored helium. However, these officials said that after receiving comments requesting that BLM sell additional helium, and after considering the act’s minimum quantity requirement, they decided to offer for sale an additional 210 million cubic feet of helium in May 2014. In the two Phase A sales, four nonrefiners purchased a total of 61 million cubic feet of crude helium, and refiners purchased the remainder. By offering 610 million cubic feet for sale in fiscal year 2014, BLM did not offer for sale the full volume of crude helium that BLM’s model estimated would be produced in fiscal year 2014. This estimated volume, approximately 1.5 billion cubic feet, is less than the volume of crude helium offered for sale in fiscal year 2012 (2.1 billion cubic feet). Under the act’s minimum quantity requirement, BLM must offer for sale or auction in fiscal year 2014 the lesser of the “maximum total production capacity of the federal helium system” or the amount of helium offered for sale in fiscal year 2012. BLM officials told us they interpreted the “maximum total production capacity of the federal helium system” not as the full volume estimated by the model to be produced from the reserve this fiscal year, but rather as an amount equal to the production capacity of the reserve after (1) meeting federal users’ needs, (2) delivering a percentage of privately owned helium stored in the reserve to refiners for processing, and (3) holding back a contingency amount for possible production problems (see fig. 2). These officials said this interpretation helps ensure that the agency can deliver the volumes of privately owned helium that remain in storage before the end of fiscal year 2021. Some refiners, however, submitted comments to BLM stating that they disagree with the agency’s interpretation of the act’s minimum quantity requirement. They said that the “maximum total production capacity of the federal helium system” is the amount equal to the full volume of helium that is estimated to be produced from the reserve for the year, minus an amount for federal users. BLM set the price for the two Phase A helium sales at $95 per thousand cubic feet—an $11 increase over the fiscal year 2013 price—in December 2013. The fiscal year 2014 price increase resulted from a November 2012 recommendation from Interior’s Office of Inspector General that BLM implement a new helium pricing process by the end of 2013 to ensure a fair return on the sale of helium. In response, BLM worked with Interior’s Office of Minerals Evaluation to contract for a study on helium prices. The study was completed on October 15, 2013. The price increase was based largely on the results of this study.