November 14, 2012
Last Friday, the U.S. Department of the Interior’s (DOI) Office of Inspector General released its final audit report of the Bureau of Land Management’s (BLM) Helium Program. The BLM Helium Program manages the Federal Helium Reserve, located near Amarillo, Texas. Sales from the helium reserve supply about 40 percent of domestic and 30 percent of global demand for helium each year. Helium is critical to a wide range of industrial, scientific, and medical markets, including medical devices such as MRIs, high tech manufacturing of semiconductors and fiber optic cables, industrial welding, space exploration and other important scientific research.
The Inspector General report highlights issues with the operation of the Reserve that the bipartisan Helium Stewardship Act (S. 2374) is designed to address. The report finds that the BLM is currently selling helium at rates well below market value, does not currently have the information or capability to determine a fair market price, and that taxpayers will miss out on millions of dollars in additional revenue if corrective action is not taken in the near future. In addition, without congressional action to reauthorize the Helium Program, the program will terminate as early as next year, creating a scarcity of helium supply for government, industrial, medical and other applications.
Sen. Bingaman: “This report underscores problems with the operation of the Bureau of Land Management’s Helium Program that must be addressed, and quickly, to capture maximum value for the American taxpayer and ensure the viability of our critical helium supply. The bipartisan legislation we have already introduced addresses the program deficiencies raised by the report, and will allow for the continued repayment of the national debt by selling helium at fair market prices. In addition to providing a good return on investment to American taxpayers, the legislation will boost the private helium sector and ensure the continued success of domestic manufacturers that use helium for industrial, scientific and medical purposes. I urge my colleagues in the Senate to take swift action and pass this bill.”
Sen. Barrasso: “The Inspector General report confirms what members of Congress from both sides of the aisle have known for a while — that BLM is selling helium from the Federal Helium Reserve below market prices. Our bipartisan helium bill would give BLM the tools it needs to sell helium at market prices. This will help ensure taxpayers get a fair return on this resource and that manufacturers of MRIs, semiconductors, and other important technologies, have a stable supply of helium.”
The Helium Stewardship Act, introduced in April by Senators Jeff Bingaman (D-NM) and John Barrasso (R-WY) and co-sponsored by 21 other senators, lays out a responsible resource management strategy for the Federal Helium Reserve. The bipartisan Helium Stewardship Act draws on recommendations from private helium producers, refiners, distributors, end users, the Bureau of Land Management and the National Academy of Sciences to address the most pressing problems facing our nation’s helium industry.
Current law mandates essentially a “fire sale” of existing Federal helium assets to repay a $1.3 billion debt to the U.S. Treasury. The current sales structure distorts the private helium market and is creating uncertainty for industrial, Federal, medical and scientific users of helium. The Bingaman-Barrasso bill would remove this market distortion for the benefit of industry, private and Federal users.
The legislation does not authorize any new appropriations, and keeps the Federal Helium Program revenue positive through ongoing helium sales.
# # #