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BLM Raises Crude Helium Price- 4/25/2012
The Bureau of Land Management (BLM) announced revised pricing for crude helium that will be offered during its 2013 Open Market Sale effective October 2012.
The Fiscal Year 2013 price will be $84.00 per Mcf, up from $75.75 per Mcf in Fiscal Year 2012.
The new price is the result of a revised methodology that relies partly on the Consumer Price Index (CPI), as in years past, but incorporates other factors aimed at better capturing the costs of production and the increasing value of crude helium. These include an Enrichment Factor (essentially the cost of maintaining pressure and flow of gas from production zones), and a Conservation Factor (a calculation of the value of helium and methane lost during transportation, metering, and through production). The new methodology is expected to encourage industry conservation of the resource.
The cost of helium sold for federal purposes will continue to be the minimum allowed by the Federal Helium Privatization Act of 1996. For Fiscal Year 2013 the pricing has been adjusted to $67.75 up from $65.50 in Fiscal Year 2012.
The BLM’s Amarillo Field Office oversees the Federal Helium Program. “Getting a fair price for Federal crude helium is our obligation, and this year’s new pricing represents our commitment to that goal,” says Leslie Theiss, the Amarillo Field Manager.
The BLM is responsible for administering the Department of the Interior’s Federal Helium Program following the intent and requirements of the Federal Helium Privatization Act of 1996 (Act). The Act established a minimum pricing for the helium based on a calculation that would retire the program’s total debt to the US Treasury by 2015. Until 2010, the BLM had been charging the minimum price established by the Act, a price that represents the cost of the helium not its value on the open market. The new pricing methodology is in response to recommendations from the 2010 National Academy of Sciences (NAS) report, “Selling the Nation’s Helium Reserve”. The report identified recommendations that serve the U.S. national interests and the interests of U.S. taxpayers. The NAS report suggests that selling crude helium at market price rather than the legislated minimum could, “enable more rapid retirement of BLM facilities debt to the US Treasury – a central goal of the 1996 Act.”