House Hearing on Implementation of New Helium Legislation

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Publication date: 
24 July 2015
Number: 
103

   

“For many scientists, including me, liquid helium is our professional lifeblood.” So stated William Halperin, Professor of Physics at Northwestern University and the chair-elect of the American Physical Society’s Division of Condensed Matter Physics. Halperin was testifying at a July 8 hearing of the Energy and Mineral Resources Subcommittee of the House Natural Resources Committee on the implementation of the Helium Stewardship Act.

The success of the Bureau of Land Management in implementing this 2013 legislation depends upon who you ask. The first auction mandated by this law netted the federal government much more money than anticipated. But the winning bids, characterized as “outrageously high,” were made by only two of thirteen companies who participated in the July 2014 auction. Following that auction, the Bureau of Land Management (BLM) of the US Department of Interior sold the remainder of the helium from that year’s allotment to those two companies. A representative from one of the companies purchasing the helium expressed satisfaction with the process; a representative from one of the unsuccessful companies felt otherwise.

Subcommittee Chairman Doug Lamborn (R-CO) made clear his thinking on the sale, calling it “a resounding failure” marked by a “severe lack of competition” that “perpetuated” the old BLM system for the sale of helium. Ranking Member Alan Lowenthal (D-CA) was not quite as critical, noting the unexpectedly high revenue received by the federal government from the sale, while adding that there were potentially troubling signs with just two winning companies. Future sales, he said, need improvement.

“A very complicated issue” is how Lamborn characterized BLM’s management of the federal helium reserve and the laws governing its sales procedures. Congress attempted to reform these procedures in passing the Helium Stewardship Act that was intended to “complete the privatization of the federal helium reserve in a competitive market fashion that ensures stability in helium markets.” The bipartisan bill was meant to avoid a legislatively-mandated closure of the federal helium reserve earlier this decade, setting a new target date of FY 2021 for its closure. The bill had provisions allowing companies acquiring helium without refineries access to refining plants at commercially reasonable rates.

Halperin, the two corporate representatives, a witness from the Government Accountability Office, and a BLM official testified about the implementation of the law since its enactment. The take-away message is BLM’s recognition of congressional and other displeasure in how the 2014 sale was conducted and the Bureau’s unspecified plan to reform the process for forthcoming sales.

Halperin told the subcommittee that the American Physical Society and the American Chemical Society are taking steps to deal with this problem while reforms are underway. Telling the subcommittee that there is no substitute for helium in some fields, and saying that rapidly increasing helium prices are causing lay-offs of research staff, Halperin discussed a program the two societies have established with the Defense Logistics Agency (DLA) to purchase liquid helium for seven universities. Using DLA as a broker has resulted in savings of 15 to 20 percent or more. The societies are working with the Materials Research Society on transitioning to laboratory recycling systems that can achieve payback in three years. Halperin also suggested that Congress consider new legislation, stating in his testimony:

This Subcommittee should consider possible legislative fixes to keep the helium reserve open beyond 2021. The benefits to the research community could be immeasurable. The helium reserve administered by the BLM is a unique resource. It can protect scientific research from the extreme volatility of the helium market that has been abundantly manifest in the past five years. Stability and affordability of the helium supply chain for government sponsored scientific research can be achieved, if the federal helium reserve is maintained.

This week the Senate Energy and Natural Resources Committee released a bipartisan draft of a comprehensive energy policy bill that takes a different approach. According to a committee document (page 11) this bill would “repeal the Federal government’s reservation of the first right to helium located on leased lands.”

 

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