Up, Up and Away – Helium Issues
By the time you read this, national helium problems may be solved. But I doubt it.
These matters could be critical to many readers using helium as a preferred furnace quenching atmosphere (four times better than argon, with helium thermal conductivity 10 times better). The facts are that users in the Industrial Heating community use well less than 13% of supplies. If we include welding (20%) and pressurized purges (26%), the IH total is closer to 60%. In addition, medical cryogenics (MRI machine coolants consuming 2-10K liters per unit) uses 28% of national consumption. There is a problem for all users because prices have risen each year from $64 to $75.75 to $84 per MCF (million cubic feet) over the past three years.
Now some background. Beginning in 1925, the U.S. government began storing helium in the Bush Dome at Cliffside near Amarillo, Texas, because local gas wells contained up to 1.9% helium while most wells run 0.4% or less. Since helium was critical in military reconnaissance (blimps), the government stored it and encouraged private gas producers to sell helium into this reserve, which by the end of 2014 will still contain 10-12 BCF (billion cubic feet). The reserve has been operated by the Interior Department Bureau of Land Management (BLM) since 1960. The U.S. still produces 75% of world annual supply (30% of world consumption), which amounts to a little more than 2 BCF per year.
In 1996, government moved to privatize federal supplies via sell-off of reserves by 2015. Prices for helium were/are solely set by the BLM typically below cost of production. The BLM is attempting to recover $1 billion in costs incurred since 1960 – when reserve purchases were initiated by federal mandate – for storage and operation of the Bush Dome.
On April 25, 2012, a Senate bill called the Helium Stewardship Act of 2012 (S. 2374) was introduced but went nowhere. An equivalent House bill passed on April 26, 2013, by a 394 to 1 vote. On May 7, 2013, the Senate held hearings in their Energy and Natural Resources Committee on the current 113th Congress resurrection of the old bill, now known by the same title but is bill S. 783. The Senate bill re-formalized prior federal law and BLM responsibilities, but neither bill addressed a matter raised by a 1990 study from the Government Accounting Office that recommended that the $1 billion debt, to be paid down through helium sales, be cancelled and future operation of reserves and all helium sales revert to the private sector. On the House side, The Responsible Helium Administration and Stewardship Act proposed legislation (H.R. 527) that had bipartisan support, but no conclusive actions resulted after the June 11, 2013, hearings.
The storage reserve connects with an extensive pipeline system (420 miles) in Kansas, Oklahoma and Texas and passes through six extraction plant sites. Pipeline operation is part of the helium reserve activity. Existing law requires that reserve operations and management be resolved by Oct. 1, 2013, the first day of fiscal year 2014.
So, America faced (or faces) a “helium cliff” – similar to a “fiscal cliff” – as of a few days ago. In case you missed the point, partisan gridlock in the Senate and House of Representatives created this issue. Years ago, the six private helium extraction companies lobbied Congress to get federal government out of the helium business. Their initial motivation was to keep the BLM from selling helium to NASA at a discount and artificially controlling prices. But now that a status quo is established, the private liquefied helium suppliers along that pipeline are comfortable with federal operations. This is because, reportedly, if the entire operation were privatized, one company would become dominant at the expense of the others.
So, there really is no helium supply problem. The U.S. seems to have a private-sector squabble in this hybrid market of public-private activity, exacerbated by politicians lobbied by narrow interests and not mindful of their legislative duties in a distorted marketplace.
Further, for those readers who use helium in industrial operations, don’t get your knickers in a knot. There is an ample supply of helium in existing reserves, and there is untapped excess in Wyoming gas deposits. Instead, you should get annoyed with Congress (particularly the Senate) for making a problem out of a non-problem.
*Editor's note: For information on the recently passed Helium Stewardship Act of 2013, click here.