Under current law, the US Helium Reserve will sell in a straight-line manner (a prescribed amount each year) at prices set by 1996 legislation (which is currently approximately half of market value) until the remaining debt is paid to the US Treasury. At that time, the facility’s operating fund will be dissolved into the US Treasury with no method to administer the remaining Federal or private helium held in the reserve. In response to this issue, HR 527 was proposed on February 6th of this year. Some subtleties (e.g. auction special case caveats) are omitted in favor of relaying the essence of the legislation.
- 1925 – Helium Act (50 U.S.C. Ch. 10) established US Helium Reserve in Amarillo, TX
- 1960 – Helium Act Amendments (PL 86–777) authorized pipeline and crude helium purchase
- 1996 – Helium Privatization Act (PL 104-273) initiated reserve sell-off and closure by January 1, 2015
- 2012 – Helium Stewardship Act (S 2374)
- 2013 – Responsible Helium Administration and Stewardship Act (HR 527)
Responsible Helium Administration and Stewardship Act
In all three phases, this legislation authorizes federal users (defined as agencies and holders at least one federal grant related to the use of helium) to purchase refined helium from private industry that is contracted to purchase equal quantities of crude helium from the reserve. This purchase method is referred to as “in-kind” helium distribution. Additionally, the Secretary of the Interior will be referred to as “The Secretary” for brevity.
Phase 1: Finalizing Debt Payoff
For one year after the date of enactment, no real change is made while the debt is paid off. The Secretary may sell crude helium from the reserve to any buyer in amounts at least that offered in FY 2012 and at a price that is at least that of FY 2012.
Phase 2: Maximizing Total Recovery of He and Increasing Returns to the American Taxpayer
At the conclusion of Phase 1, and until the federal stockpile is 3 billion cubic feet of crude helium, The Secretary will sell crude helium to refineries at auction in quantities set by The Secretary with price minima determined by a confidential survey of transactions, current market prices and cost analyses.
Phase 3: Access for Federal Users
Once Phase 2 ends, the sole role of the reserve will be catering to federal users as mentioned above.
Avenue for Revenue
All income received under this act will be collected into the Helium Production Fund which will (in order of priority) finance the administration of the above outlined activities, pay off the Treasury debt, make capital investments to reserve and pipeline infrastructure, and supply revenue to the US Treasury. Provided the debt is indeed paid off early in the first year of enactment, the Federal Helium Reserve stands to provide tangible income to the US Government in addition to retaining a strategic supply of helium, and a force for market stability.