Oh buoy.
The United States is facing a “helium gap”
of its own making -- with potential dire consequences for scientific,
technical, biomedical and national security sectors, a recent federal
report warns.
By selling off the world’s largest helium stockpile at fixed,
below-market prices, the U.S. endangers its long-term access, short-changes citizens in
favor of private business and distorts the global market, according to the NRC (National
Research Council), a government advisory body.
From Chipmunk Voices to Chips
Over the
last decade, helium use has
ballooned, especially overseas, for a wide range of high-tech products: fiber
optic and chip fabrication, MRI (magnetic resonance imaging) devices, rockets,
weather balloons and military surveillance, to name a few.
As a result, the NRC notes, ready access
to affordable supplies is critical to industry, government and academia. If
the current sell-down continues, in 10 to 15 years the United States will go from the
world’s biggest helium exporter to an importer from Russia and the Middle East.
Crude Helium Capacities
Source: “Selling the Nation’s Helium Reserve,” National
Research Council.
“Selling off the helium reserve,” the panel
concludes, “is not in the best interest of the U.S. taxpayers or the
country.”
Public and
Private Ownership Both Troubled
Helium
reserves are a surprisingly weighty topic.
During the
Cold War, helium was strategic to defense and aerospace. The United
States created a 3,500-acre Federal Helium Reserve underground
in Texas, with a pipeline
network stretching into Oklahoma and Kansas.
But, as a recent
Wall Street Journal article
explains, “The Bureau of Land Management
eventually accrued a debt of $1.3 billion in acquiring the helium and equipment
to process it, and in 1996, the government decided to get out of the business.
Congress fixed the yearly amount and price at which helium would be offered so
that the debt would be paid and the helium gone by 2015.”
It’s the effects of that law -- the
Helium Privatization Act of 1996 – and BLM
program oversight that’s causing concern today. Here are the problems and
NRC-recommended solutions:
Loss of U.S. dominance: The United States currently satisfies more than one-half of the annual U.S. demand for helium, and
provides approximately one-third of the helium consumed globally each year.
Many worry the United States is exiting the market
at a time of global growth. Recommendation: Scrap the “straight-line” sell-down schedule to preserve reserves.
Control by
“Big Helium”:
At present, just four companies can process federally owned crude helium. The
BMN serves as a business partner. Hmmmm. Recommendation: Open crude helium sales to more buyers, and work
with processing companies to make unused refining available to new companies.
Opaque pricing: Because a handful of companies refine crude helium for retail sale, no
real market or public prices exist (see above). Recommendation: Shift to a market-based
pricing policy and establish a more
transparent pricing exchange.
Cut-rate deals: Crude
federal helium is sold to private purchasers at below-market values. The NRC
says that amounts to “a taxpayer-financed subsidy for consumption of this
scarce publicly owned resource… sales of federally owned crude helium could end
up subsidizing exports of helium. “ Recommendation: Market-rate pricing.
Buy Low, Sell High
Source: U.S. Bureau of Land Management. Latest info at:
http://minerals.usgs.gov/minerals/pubs/commodity/helium/mcs-2010-heliu.pdf
Congress may take up the matter this
year. "As a nation, we can't be a scientific leader if we don't have the
critical materials to do research," the Journal quotes Bart Gordon, a Tennessee Democrat who is chairman of
the House Committee on Science and Technology. More than hot air? We shall see.
