With the currently tight helium market rarely out of the headlines, Linde Global Helium is the latest to make the news with its calls for legislation to preserve stability in the US helium market.
In testimony before the House Committee on Natural Resources on February 14, Nick Haines, head of source development for Linde Global Helium, made the call for legislation.
Haines called for changes to a proposed bill that would put up for auction all of the helium produced from the Bureau of Land Management’s (BLM) Federal Helium Reserve in Amarillo, Texas. He argued that, without revisions, the legislation would add more instability to an already volatile helium market, and ultimately hurt consumers.
The BLM is responsible for operating and maintaining the Federal Helium Reserve and providing enriched crude helium to private refiners.
“We believe the proposed auction will disrupt the marketplace and create tremendous uncertainty with regard to continued helium supplies…”
Haines argued that the BLM could ensure that it is obtaining fair market value for helium with less drastic revisions to its procedures, which in turn would be less disruptive to the stability of the existing supply chain. He praised the Committee for working to reauthorize the BLM helium program, which expires in the near future.
“We believe the proposed auction will disrupt the marketplace and create tremendous uncertainty with regard to continued helium supplies,” he said.
“As a business, Linde doesn’t benefit from a higher or lower price of helium. We do lose, however, if the market suffers from dramatic price swings or supply disruptions. So do our customers, and so do consumers. The price uncertainty arising from periodic auctions makes it more complex for customers to predict their costs and manage their businesses.”
Haines also alluded to the long-term effects on the supply chain; Linde has an extensive investment in the helium business that is fully integrated from production to distribution and retail sales. To maintain this investment, Linde requires long-term contracts with its suppliers and customers.
Haines explained, “If we are unable to obtain long-term supply agreements, we may be forced to reduce investments and costs, as well as contracts with our customers. Our customers in turn need the reliability of long-term contracts as well. When the nation’s largest supplier of crude helium auctions 100 percent of its supply, we can’t be sure on a periodic basis if we’ll have helium to supply to our customers.”