Matt D. Weed
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Saving helium in the US

2/18/2013

1 Comment

 
In addition to party favors, helium is an irreplaceable and non-renewable element in the global high-tech economy.  It is used in medical imaging (MRI), industrial welding, and semiconductor manufacture, as well as in advanced research applications like particle physics and rocket propulsion.  Currently, the US Government owns and operates the world’s only helium reserve as well as a pipeline connecting it to a private network of industrial suppliers and refineries. This public-private partnership supplies nearly one third of total global demand.

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.

Legislative Review
  • 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
This is the state of current law.  The goal is to privatize the full helium market vertical and repay a $1.4b infrastructure debt.  Repayment and therefore shut down of the reserve is ahead of schedule and projected for Fall 2013.
  • 2012 – Helium Stewardship Act (S 2374)
The market for helium has proven more volatile than expected and without the reserve’s stabilizing influence, there is fear of price spikes and shortages that will negatively impact industries and researchers alike.  This bill introduced by Sen. Bingaman (D-NM) was left in committee as the 113th session closed, but new Energy & Natural Resources Committee Chairman Ron Wyden (D-OR) has publically made resolving this issue a priority early this year.
  • 2013 – Responsible Helium Administration and Stewardship Act (HR 527)
Introduced on Feb. 6th by House Natural Resources Committee Chairman Doc Hastings (R-WA), the bill proposes a smooth transition for the reserve to a limited role and authorizes it to continue in a self-sustainable way to federal users.  It has been received as a non-partisan issue and is co-sponsored by Reps. Flores (R-TX), Holt (D-NJ) and Markey (D-MA).

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.
1 Comment
Lorena M link
11/11/2023 06:54:18 pm

Great bllog post

Reply



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    I am a member of the National Photonics Initiative and have an interest in how government plays a part in the progress of our world.  Here are my thoughts on science and social public policy issues of the day.

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