50 USC 167d - Sale of crude helium

U.S Code last checked for updates: Nov 22, 2024

§ 167d.

Sale of crude helium

(a)

Phase A: allocation transition

(1)

In general

(2)

Federal purchases

(3)

Duration

This subsection applies during—

(A)

the period beginning on October 2, 2013, and ending on September 30, 2014; and

(B)

any period during which the sale of helium under subsection (b) is delayed or suspended.

(b)

Phase B: auction implementation

(1)

In general

The Secretary shall offer crude helium for sale in quantities not subject to auction under paragraph (2), after completion of each auction, at not less than the minimum price established under paragraph (7), and under such terms and conditions as the Secretary determines necessary—

(A)

to maximize total recovery of helium from the Federal Helium Reserve over the long term;

(B)

to maximize the total financial return to the taxpayer;

(C)

to manage crude helium sales according to the ability of the Secretary to extract and produce helium from the Federal Helium Reserve;

(D)

to give priority to meeting the helium demand of Federal users in the event of any disruption to the Federal Helium Reserve; and

(E)

to carry out this subsection with minimum market disruption.

(2)

Auction quantities

For the period described in paragraph (4) and consistent with the conditions described in paragraph (8), the Secretary shall annually auction to any qualified bidder a quantity of crude helium in the Federal Helium Reserve equal to—

(A)

for fiscal year 2015, 10 percent of the total volume of crude helium made available for that fiscal year;

(B)

for each of fiscal years 2016 through 2019, a percentage of the total volume of crude helium that is 15 percentage points greater than the percentage made available for the previous fiscal year; and

(C)

for fiscal year 2020 and each fiscal year thereafter, 100 percent of the total volume of crude helium made available for that fiscal year.

(3)

Federal purchases

(4)

Duration

This subsection applies during the period—

(A)

beginning on October 1, 2014; and

(B)

ending on the date on which the volume of recoverable crude helium at the Federal Helium Reserve (other than privately owned quantities of crude helium stored temporarily at the Federal Helium Reserve under section 167c of this title and this section) is 3,000,000,000 standard cubic feet.

(5)

Safety valve

The Secretary may adjust the quantities specified in paragraph (2)—

(A)

downward, if the Secretary determines the adjustment necessary—

(i)

to minimize market disruptions that pose a threat to the economic well-being of the United States; and

(ii)

only after submitting a written justification of the adjustment to the Committee on Energy and Natural Resources of the Senate and the Committee on Natural Resources of the House of Representatives; or

(B)

upward, if the Secretary determines the adjustment necessary to increase participation in crude helium auctions or returns to the taxpayer.

(6)

Auction format

(7)

Prices

The Secretary shall annually establish, as applicable, separate sale and minimum auction prices under subsection (a)(1) and paragraphs (1) and (2) using, if applicable and in the following order of priority:

(A)

The sale price of crude helium in auctions held by the Secretary under paragraph (2).

(B)

Price recommendations and disaggregated data from a qualified, independent third party who has no conflict of interest, who shall conduct a confidential survey of qualifying domestic helium transactions.

(C)

The volume-weighted average price of all crude helium and pure helium purchased, sold, or processed by persons in all qualifying domestic helium transactions.

(D)

The volume-weighted average cost of converting gaseous crude helium into pure helium.

(8)

Terms and conditions

(A)

In general

The Secretary shall require all persons that are parties to a contract with the Secretary for the withdrawal, acceptance, storage, transportation, delivery, or redelivery of crude helium to disclose, on a strictly confidential basis—

(i)

the volumes and associated prices in dollars per thousand cubic feet of all crude and pure helium purchased, sold, or processed by persons in qualifying domestic helium transactions;

(ii)

the volumes and associated costs in dollars per thousand cubic feet of converting crude helium into pure helium; and

(iii)

refinery capacity and future capacity estimates.

(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 October 2, 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 October 2, 2013, including nonallocated sales.

(9)

Use of information

The Secretary may use the information collected under this chapter—

(A)

to approximate crude helium prices; and

(B)

to ensure the recovery of fair value for the taxpayers of the United States from sales of crude helium.

(10)

Protection of confidentiality

(11)

Forward auctions

Effective beginning in fiscal year 2016, the Secretary may conduct a forward auction once each fiscal year of a quantity of helium that is equal to up to 10 percent of the volume of crude helium to be made available at auction during the following fiscal year if the Secretary determines that the forward auction will—

(A)

not cause a disruption in the supply of helium from the Reserve;

(B)

represent a cost-effective action;

(C)

generate greater returns for taxpayers; and

(D)

increase the effectiveness of price discovery.

(12)

Sale schedule and frequency

For fiscal year 2015 the Secretary shall conduct only one auction, which shall precede, and one sale, which shall take place no later than August 1, 2014, with full and final payment for the sale being made no later than September 26, 2014. Consistent with the annual volumes established under paragraph (2), effective beginning in fiscal year 2016, the Secretary may conduct auctions twice during each fiscal year if the Secretary determines that the auction frequency will—

(A)

not cause a disruption in the supply of helium from the Reserve;

(B)

represent a cost-effective action;

(C)

generate greater returns for taxpayers; and

(D)

increase the effectiveness of price discovery.

(13)

One-time sale

(A)

In general

(B)

Volume sold

The volume of helium sold under this paragraph—

(i)

shall be at least 250 million cubic feet; and

(ii)

shall be made available for sale consistent with paragraph (2)(B).

(c)

Phase C: continued access for Federal users

(1)

In general

(2)

Federal purchases

(3)

Effective date

(d)

Phase D: disposal of assets

(1)

In general

(2)

Applicable law

(3)

Proceeds

(4)

Costs

(e)

Helium Production Fund

(1)

In general

All amounts received under this chapter, including amounts from the sale or auction of crude helium, shall be credited to the Helium Production Fund, which shall be available without fiscal year limitation for purposes determined to be necessary and cost effective by the Secretary to carry out this chapter (other than sections 167n, 167o, and 167p of this title), including capital investments in upgrades and maintenance at the Federal Helium System, including—

(A)

well head maintenance at the Cliffside Field;

(B)

capital investments in maintenance and upgrades of facilities that pressurize the Cliffside Field;

(C)

capital investments in maintenance and upgrades of equipment related to the storage, withdrawal, enrichment, transportation, purification, and sale of crude helium from the Federal Helium Reserve;

(D)

entering into purchase, lease, or other agreements to drill new or uncap existing wells to maximize the recovery of crude helium from the Federal Helium System; and

(E)

any other scheduled or unscheduled maintenance of the Federal Helium System.

(2)

Excess funds

(3)

Retirement of public debt

(4)

Report

(f)

Minimum quantity

The Secretary shall offer for sale or auction during each fiscal year under subsections (a), (b), and (c) a quantity of crude helium that is the lesser of—

(1)

the quantity of crude helium offered for sale by the Secretary during fiscal year 2012; or

(2)

the maximum total production capacity of the Federal Helium System.

(Mar. 3, 1925, ch. 426, § 6, as added Pub. L. 86–777, § 2, Sept. 13, 1960, 74 Stat. 921; amended Pub. L. 104–273, § 4, Oct. 9, 1996, 110 Stat. 3317; Pub. L. 113–40, § 5, Oct. 2, 2013, 127 Stat. 536.)

cite as: 50 USC 167d