The USA could have a resolution to the on-going helium supply and demand story just days after the Bureau of Land Management (BLM) raised the price of federal crude helium.
Senators Jeff Bingaman and John Barrasso have proposed new legislation which stipulates a responsible resource management strategy for the Federal Helium Reserve.
The bipartisan Helium Stewardship Act draws on recommendations from private helium refiners, retailers, end users, BLM officials and the National Academy of Sciences to address the most pressing problems facing the USA’s helium industry.
“This bipartisan bill 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.”
stated Senator Bingaman.
The Federal Helium Reserve is the only underground helium storage facility in the world and is located near Amarillo, Texas.
Connected by a Federal pipeline, the reserve joins to private helium refiners in Texas, Oklahoma and Kansas. And sales from the reserve supply about half of all domestic helium needs and one third of global helium demand every year.
And the BLM, based in Amarillo, revealed last week that revised pricing for crude helium will be offered during its 2013 Open Market Sale, effective from October 2012.
The Fiscal Year 2013 price will be $84.00 per Mcf, up from $75.75 per Mcf in Fiscal Year 2012.
A BLM statement explains that the new price is the result of a revised methodology that relies partly on the Consumer Price Index (CPI), as in years past, but incorporates other factors aimed at better capturing the costs of production and the increasing value of crude helium.
Current US law orders essentially a “fire sale” of existing Federal helium assets to repay a $1.3 billion debt to the U.S. Treasury.
However, 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.
Senator Barrasso said, “The National Helium Reserve provides a critical supply of helium for important technology – including medical MRIs, fibre optic cables, microchips and semiconductors.
“It’s currently unclear whether this supply of helium will remain available for sale in the next few years. Our legislation will ensure a stable supply of helium while encouraging the exploration and production of alternative sources of helium, such as those in Wyoming.”
said Senator Barrasso.
The Helium Stewardship Act lays out a responsible resource management strategy for the Federal Helium Reserve, which is under the jurisdiction of the Secretary of the Interior through the BLM.
The legislation does not authorize any new appropriations, and keeps the Federal Helium Program revenue positive through on-going helium sales.