American Geological Institute Home PageLegislative Hearing of the Subcommittee on Forests and Public Lands Management of the Senate Committee on Energy and Natural Resources: July 25, 1995
Privatizing the Helium Industry
"The question is not if we will close Amarillo, but when and how," said Sen. Larry Craig (R-ID). Sen. Craig chaired a Senate Energy Committee hearing on the sale of the federal helium stockpile at Amarillo, Texas on July 25, 1995. Two House bills and three Senate bills have been introduced to terminate the federal program for helium refining, marketing and transporting. The Administration's bill, S.898, introduced by Sen. Frank Murkowski (R-AK), chair of the Senate Energy and Natural Resources Committee, would shut down the helium program in three years.
U.S. Bureau of Mines Director Rhea Graham supports S.898 because it allows sufficient time for the transition to an industry supply of helium. Russell Bardos, Acting Senior Engineer of NASA's Office of Space Flight said that the Kennedy Space Center and other NASA programs need helium in the gas phase. Currently the industry is equipped to supply helium only in the liquid phase and Bardos says it will take three years for suppliers to completely adapt their facilities.
Only one year is needed for industry to take over, according to Carl Johnson, President of the Compressed Gas Association. He supports S.738, a bill introduced by Sen. Craig Thomas (R-WY) and consponsored by Sen. Craig. This bill has a short time scale and it directs the helium debt to be repayed by the proceeds from the sale.
The helium debt, approximately $1.4 billion, was incurred under the Helium Act Amendments of 1960 which were to ensure a consistent supply of helium for anticipated federal government needs. If helium is not mined, it is lost to the atmosphere. The government created a storage facility, which was filled with pure helium by private companies, to keep the gas from escaping.
The federal demand for helium, however, never reached as high as expected, so only a small fraction of this debt has been repayed.Graham suggested that since the debt was an intragovernment loan, it should simply be cancelled.
Dennis Mills, Central Chairman of the Helium Group of the International Union AFL-CIO testified that privatizing the industry will only cost the government more money. He said that government prices are lower than industry prices. Mills opposes an end to federal helium production, saying the bills should be called the "Big Business Subsidy Act of 1995."
(Contributed by Sandra S. Nichols, American Geological Institute)
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