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Once Again, U.S. Lawmakers Move to Head Off Helium Crisis
15 February 2013 4:00 pm
For the second time in 8 months, a congressional committee is considering a bill that would avert a calamitous shortage of helium that's sure to take place this year if Congress does nothing. That shortage could cripple various high-tech industries and bring research in a variety of fields to a standstill. But if the fate of last year's bill is any indication, the new proposed legislation may not make it into law.
The problem is that since 1996, the federal government has been selling its vast reserve of helium, which is held underground in a natural geological formation near Amarillo, Texas. Those sales supply 42% of the helium consumed in the United States and 35% of the helium consumed globally. But by law, the sales continue only until the Bureau of Land Management (BLM), which controls the reserve, recoups the $1.4 billion debt the government incurred in developing the reserve. BLM is expected to reach the break-even point by the end of this fiscal year, 30 September, which would take offline a huge chunk of the global helium supply.
"Unless Congress takes swift action, the U.S. will float off the helium cliff," said Representative Doc Hastings (R-WA), chair of the House of Representatives Natural Resources Committee and co-sponsor of the bipartisan Responsible Helium Administration and Stewardship Act, during a committee hearing on the bill yesterday. Rodney Morgan, vice president of procurement for Micron Technology in Boise—the last memory chip-maker based in the United States—testified that "put simply, without helium, we can't operate."
Although most people associate helium with party balloons, the wispy gas has several properties that make it indispensable for myriad high-tech uses. It's the only element that remains a liquid at absolute zero, so it's the only thing that can serve as a cryogen to cool the superconducting magnets in MRI machines and particle accelerators such as Europe's Large Hadron Collider. The supremely inert gas is also indispensable for the production of microchips and optical fibers.
Handwringing over the helium supply is nothing new. In 1996, Congress instructed BLM to draw down the reserve at a steady rate and sell it at a price that would pay off the reserve's debt and support the sales. At the time, BLM's price was well above the market price for refined helium. However, by 2010, the BLM price had sunk below the market value, and a report by the National Academies found that the BLM sales were artificially suppressing the price of helium and encouraging wasteful uses. The academies recommended that BLM charge a market price for the helium, draw the helium out in a way that would maximize recovery, and protect the supply for federal uses including research.
The new bill would address those concerns. It would authorize BLM to continue the sales much as they are now for another year. Then, in a second phase lasting until about 2020, BLM would withdraw the helium at an optimal rate and sell through biannual auctions. Finally, when the supply of the gas dipped to 85 billion cubic liters, the bill would allow sales only to federal users, including research grant holders.
Much of the bill is almost identical to one that never made it out of the Senate Committee on Energy and Natural Resources. The key difference between the two bills is that the Senate bill would have had BLM determine a market price for its helium by confidentially polling suppliers. The House bill would rely on the auction.
That auction approach seems to have bipartisan support. "Adam Smith would be spinning in his grave if he could see the way that we're [currently] allocating this federal resource," said Edward Markey (D-MA), the ranking minority member of the House committee and a co-sponsor of the bill. He called for "Darwinian competition" in the sales of the helium. His Republican colleague Hastings responded, "I'm speechless!"
Executives representing businesses that deal with helium, however, panned the idea. The helium industry is capital-intensive and suppliers rely on long-term contracts to guarantee a return on investments, said Nicholas Haines, head of global helium source development for Linde North America in Murray Hill, New Jersey, one of only four companies with a refinery connected to the federal helium reserve. Selling helium at auction every 6 months would make key agreements impossible, he said. "We're hearing about price spikes and [supply] disruptions," he said. "You are devising a system that will make price spikes and disruptions worse."
Even with BLM's helium reserve pumping out gas, supplies are short. Researchers at Argonne National Laboratory in Illinois and Oak Ridge National Laboratory in Tennessee have been able to get only two-thirds of the helium they've ordered in recent months, reported Samuel Aronson, former director of Brookhaven National Laboratory in Upton, New York, and vice president of the American Physical Society.
Long and short, everyone agrees that something has to be done to continue BLM's helium sales past September. But that doesn't mean that will happen. "Sometimes it's difficult to get legislation out of this Congress," Representative Alan Lowenthal (D-CA) observed at the hearing. "I doubt that will be a shock to you."