50 U.S.C. § 167d — Sale of crude helium

(a) Phase A: allocation transition. (1) In general: The Secretary must offer crude helium for sale — in whatever amounts, at whatever times, at no less than the minimum price set under subsection (b)(7), and on whatever terms the Secretary decides are needed — in a way that avoids disrupting the market. (2) Federal purchases: Federal users can buy refined helium with priority pipeline access under this phase, from sellers who have signed binding contracts to buy an equal amount of crude helium from the Secretary at the in-kind price. (3) Duration: Phase A applies from October 2, 2013 through September 30, 2014, and also applies anytime the Phase B sales described in subsection (b) get delayed or suspended. (b) Phase B: auction implementation. (1) In general: Besides the amounts sold at auction under paragraph (2), the Secretary must also sell crude helium — after each auction wraps up, at no less than the minimum price set under paragraph (7), on terms the Secretary sets — aiming to: (A) recover the most helium possible from the Reserve over the long run; (B) get the most money for taxpayers; (C) manage sales based on how much helium can actually be extracted; (D) prioritize federal users if the Reserve gets disrupted; and (E) avoid market disruption. (2) Auction quantities: Each year, following the conditions in paragraph (8), the Secretary must auction crude helium to any qualified bidder, equal to: 10% of that year's available volume in fiscal year 2015; a share that grows 15 percentage points higher than the year before for fiscal years 2016 through 2019; and 100% of the year's available volume from fiscal year 2020 onward. (3) Federal purchases: Same as in Phase A — federal users can buy refined helium with priority pipeline access from sellers holding matching crude-helium purchase contracts with the Secretary. (4) Duration: Phase B runs from October 1, 2014 until the amount of crude helium left to recover from the Reserve (not counting privately owned helium temporarily stored there) drops to 3,000,000,000 standard cubic feet. (5) Safety valve: The Secretary can lower the auction amounts in paragraph (2) to avoid market disruptions that threaten the U.S. economy — but only after sending Congress's Senate Energy and House Natural Resources committees a written explanation. The Secretary can also raise the amounts to boost auction participation or taxpayer returns. (6) Auction format: Each auction must use whatever method brings in the most revenue for the government. (7) Prices: Each year, the Secretary sets sale and minimum auction prices using, in this order of priority, whichever of the following is available: the prior auction's sale price; price data from an independent, conflict-free third party who confidentially surveyed real helium deals; the volume-weighted average price of all crude and pure helium bought, sold, or processed in real domestic deals; or the volume-weighted average cost of turning crude helium into pure helium. (8) Terms and conditions: (A) Everyone with a contract to accept, store, transport, deliver, or redeliver crude helium must confidentially report to the Secretary: the volumes and prices of all their crude and pure helium deals; the volumes and costs of converting crude to pure helium; and their refinery capacity, current and projected. (B) As a condition of buying crude helium at sale or auction, starting 90 days after October 2, 2013, a refiner must make its spare refining capacity available at fair market rates to anyone who won a paragraph (2) auction, or who bought crude helium from the Reserve some other way (including non-auction sales) after October 2, 2013. (9) Use of information: The Secretary can use this reported information to estimate crude helium prices and to make sure taxpayers get fair value from helium sales. (10) Protection of confidentiality: The Secretary must adopt whatever policies are reasonably necessary to keep that reported information confidential. (11) Forward auctions: Starting in fiscal year 2016, the Secretary may once a year auction, in advance, up to 10% of the next year's planned auction volume — but only if doing so won't disrupt supply, is cost-effective, will bring in more money for taxpayers, and will improve price discovery. (12) Sale schedule and frequency: For fiscal year 2015, there could be only one auction (held first) and one sale (no later than August 1, 2014, fully paid by September 26, 2014). Starting fiscal year 2016, the Secretary may hold auctions twice a year, consistent with the paragraph (2) volumes, if doing so meets the same four conditions as forward auctions (no disruption, cost-effective, more taxpayer return, better price discovery). (13) One-time sale: (A) Despite the normal Phase B timing, the Secretary had to hold a special one-time sale of helium by August 1, 2014, using fiscal year 2016 amounts, fully paid within 45 days of the sale. (B) That sale had to be at least 250 million cubic feet, sold consistent with the pricing rule in paragraph (2)(B). (c) Phase C: continued access for Federal users. (1) In general: Once the Reserve's recoverable helium drops to the 3-billion-cubic-foot threshold, the Secretary sells crude helium only to federal users — in whatever amounts, at whatever times, at prices covering the Secretary's full costs, on whatever terms the Secretary sets. (2) Federal purchases: Same priority-pipeline-access purchase option as before. (3) Effective date: Phase C starts the day after Phase B ends (that is, once the 3-billion-cubic-foot threshold in subsection (b)(4)(B) is reached). (d) Phase D: disposal of assets. (1) In general: Sometime after Phase C has run for at least 2 years, and no later than September 30, 2021, the Secretary had to label as excess and sell off all the remaining facilities, equipment, and property (and any interests in them) that make up the Federal Helium System. (2) Applicable law: That disposal had to follow the standard federal property rules in subtitle I of title 40. (3) Proceeds: Money from that sale counts as funds received under this chapter, credited under subsection (e). (4) Costs: Costs of that sale and shutdown — including staff termination costs — come out of the Helium Production Fund. (e) Helium Production Fund. (1) In general: All money this chapter brings in — including helium sale and auction proceeds — goes into the Helium Production Fund. That money stays available with no year-by-year expiration, for whatever the Secretary decides is necessary and cost-effective to run this chapter (except for three specific sections not covered here), including capital investments and maintenance across the Federal Helium System — such as well-head upkeep at Cliffside Field, upgrades to the equipment that pressurizes Cliffside Field, upgrades to storage/withdrawal/enrichment/transport/purification/sale equipment, deals to drill new or reopen old wells to get more helium out, and any other scheduled or unscheduled system maintenance. (2) Excess funds: Any Fund money beyond what the Secretary decides is needed goes to the U.S. Treasury's general fund, to help shrink the federal budget deficit. (3) Retirement of public debt: Out of that Treasury money, $51,000,000 must be used specifically to pay down the public debt. (4) Report: Starting one year after October 2, 2013, and every year after, the Secretary of the Interior must report to Congress's Senate Energy and House Natural Resources committees, detailing every dollar the Bureau of Land Management spent carrying out this chapter. (f) Minimum quantity. Each year, under Phases A, B, and C combined, the Secretary must offer for sale or auction the smaller of: the amount of crude helium offered in fiscal year 2012; or the Federal Helium System's maximum possible production capacity.