Chances Rise for Extension of Federal Helium Reserve

"Significant new sources are coming online but there have been repeated delays,” Nelson told the committee. “Shortages are creating tremendous volatility in the spot markets. This is not the type of environment to experiment with wholesale, untested changes in the world's most stable source of supply.”

The current economic environment “calls for level-headed reforms that are phased in incrementally,” Nelson said. “That is exactly the approach you have taken.”

But David Joyner, president of Air Liquide Helium America, Inc., speaking on behalf of his company as well as Airgas, Inc. and Matheson Tri-Gas, Inc., argued that Congress should begin auctioning off the reserve sooner than the 2014 date specified in the legislation. His groups maintain the bidding can be held within 180 days of the legislation’s enactment.

Air Liquide and the other firms represented by Joyner are chafing under current conditions that have permitted a handful of firms – including Air Products – to hold “near exclusive access to the reserve for almost 20 years.” Air Products is one of four helium refining companies that purchase about 94 percent of the raw helium made available by the reserve.

“Auction of federal helium is not a complex process,” Joyner said. “The auction involves the sale of a single commodity to a limited number of bidders on an annual basis. This is far less complex than many other auction processes which routinely occur in different markets and we fully believe that the Bureau of Land Management is well equipped to get the process underway in short order.”

Regardless, Joyner said his groups “all agree that legislation to extend operation of the Federal Helium Reserve is vital to the U.S. economy. Failure to continue operation of the reserve would remove close to one-third of global helium supplies and almost half the domestic supply from the market.”

Carolyn Duran, director of chemical risk and compliance for Intel Corp., testified that her company and the rest of the semiconductor industry “are reliant on a consistent, secure supply of helium to produce our products.”

The continued availability of helium, she said, is “absolutely necessary to prevent disruption to an already tenuous supply line of helium, a critical natural resource.”

The legislation has drawn support from the Obama administration, although the Bureau of Land Management desires additional input on some of the more technical aspects of the bill. Timothy Spisak, the bureau’s deputy assistant director of minerals and realty management, said the proposal would accomplish the original goals of “the exit of the federal government from the broader helium market and the paying off of the helium debt while protecting long-term supply interests for the federal government.”