March 31, 2010 — Vol. 3, Issue 3
Helium for Sale
Congress should rethink the decision to sell off U.S. helium reserves, according to the National Research Council.
Helium does more than keep the Goodyear blimp aloft — it is a non-renewable, irreplaceable resource that has key uses for the aerospace, medical, and research communities. NASA uses helium to pressurize and purge engines of propellants and to support weather-related missions, precision welding applications, and research and development programs. Last fall, NASA contracted with five companies to provide 12.5 million liters of liquid helium and 235.7 million standard cubic feet of gaseous helium to 17 agency locations.
Since 2005, however, the U.S. government has been selling off large amounts of helium to recover costs spent maintaining its reserve. The National Research Council (NRC) evaluated this policy, and has concluded that Congress should reconsider its decision to put the government's helium for sale.
Concern for the nation's helium supply dates to 1925, when the Federal Helium Reserve was created to stockpile the inert gas for use in "lighter-than-air" aircraft and other defense applications. Over 30 years later, the Cold War prompted Congress to ask natural gas producers to strip helium from natural gas and sell it to the government for long-term storage. As a result, the U.S. had so much helium gas stored that it could sell it abroad.
Over time, though, maintaining the reserves and infrastructure became very costly, prompting the Helium Privatization Act of 1996. This called for the dismantling and shutdown of helium facilities and refining operations by 1999 and the sale of U.S. reserves starting in 2005 and ending in 2015. A 2000 NRC report concluded that selling off the reserves would not substantially affect U.S. interests.
The 2010 report concludes that this has not been the case. It expressed three concerns regarding the U.S. helium supply:
- In 10 to 15 years, the United States will become a net importer of helium, and our principle sources will be the Middle East and Russia.
- The pricing mandated in the Helium Privatization Act has triggered significant increases in the price of crude helium.
- The withdrawal process from the helium reservoir is inefficient and irresponsible.
The authors recommend that the government should put procedures in place to open the prices of the federally owned helium market since it is not currently set by market conditions. According to the report, Congress should also reconsider whether or not selling off all of the federally owned helium is still in the nation's best interests.
Two outstanding questions remain: how will the large amounts of federally owned helium be managed after 2010, and how should the strategic reserves be maintained? The report concludes that the "current efforts to comply with legislative prescriptions have had and will continue to have negative impacts on the needs of both current and future users of helium in the United States."
Read the report.