The US Bureau of Land Management’s (BLM) much anticipated FY 2019 Crude Helium Auction that had been scheduled to take place at 1:00 PM today (July 18th) in Amarillo, Texas was abruptly cancelled by the BLM just before 7:00 PM yesterday, discloses Phil Kornbluth, President of Kornbluth Helium Consulting, LLC and member of gasworld’s US Editorial Advisory Board.

The auction was cancelled due to a temporary restraining order obtained by Weil Group Resources (Weil) in the United States District Court For the Northern District Of Texas, Amarillo Division, earlier in the afternoon. Unfortunately, due to the late cancellation, most of the planned participants in the auction had already arrived in Amarillo or were in transit to Amarillo at the time the cancellation was announced.

Weil, who had purchased crude helium in the previous year’s BLM auction and Conservation Sale, had filed a complaint against the BLM on 11th July due to their dis-satisfaction with the BLM’s methodology for allocating crude helium deliveries to the various companies who hold crude helium inventory within the BLM’s Crude Helium Pipeline & Storage System.

Without being overly precise or legalistic, or passing judgement on the merits, the gist of Weil’s arguments could be summarised as follows: 

  • Weil argued that the BLM’s methodology for allocating crude helium is unfair to those companies who hold relatively modest quantities of crude helium in storage because it limits them to allocation quantities that prevent those companies from commercialising their crude helium.
  • Weil further argued that the BLM’s allocation methodology is inconsistent with the intent of the Helium Stewardship Act of 2013 to make the Federal Helium Stockpile more easily accessible to companies other than the major helium refiners.
  • Weil argued that the process utilised by the BLM to establish its allocation policy did not comply with US government guidelines.
  • Weil argued that the BLM should revise their crude helium allocation process to provide increased allocations to those companies who hold modest quantities of crude helium inventory.
  • Finally, Weil argued that the FY 2019 Crude Helium Auction should not proceed until such time as the BLM’s crude helium allocation methodology has been clarified.

Based on the arguments summarised above, Weil was granted a temporary restraining order at a hearing that began mid-afternoon yesterday (17th July). Word of the auction’s cancellation began to trickle out during the late afternoon and the BLM confirmed the cancellation just before 7:00 PM.

The author assumes that the BLM will reschedule the FY 2019 auction for a later date, but the BLM’s future intentions have not been communicated as of the time of writing this article.

About the author

Phil Kornbluth is the President of Kornbluth Helium Consulting, LLC and is a member of gasworld’s US Editorial Advisory Board.

He has worked in the Helium Business for the last 35 years, including stints running the global businesses of both BOC Gases and the Matheson subsidiary of Taiyo Nippon Sanso Corporation.

Kornbluth can be reached at Phil@KornbluthHeliumConsulting.com or +1 (908) 745-9779.