House panel approves bill to rescue US helium reserve

20 March 2013 20:13  [Source: ICIS news]

WASHINGTON (ICIS)--A US House committee on Wednesday approved legislation to continue federal operation of a crucial helium reserve in Texas and avoid a shutdown that was scheduled to take place later this year that could have undermined multiple US industries.

The House Natural Resources Committee approved by voice vote HR-527, the “Responsible Helium Administration and Stewardship Act”, which essentially provides that the federal government will continue to operate the helium reserve under existing terms for another year.

Thereafter, semi-annual helium auctions will be held to achieve a more open and competitive purchasing process and ensure a better return for taxpayers, according to the committee chairman, Representative Doc Hastings (Republican-Washington).

That process will continue until the federally owned helium reserve is drawn down to some 3bn cubic feet when public sales will be ended and that volume will be available only for federal national security and government scientific purposes.

The US government-operated system, the Federal Helium Reserve (FHR) in Texas, provides 30% of the world’s supply of helium and fills more than 50% of US domestic demand.

That system feeds raw helium recovered from natural gas production to six refineries operated by four major industrial gases firms along the FHR pipeline that spans parts of three states – Texas, Oklahoma and Kansas.

Because of complaints about the way that FHR operates and losses to the federal government due to under-priced sales of the helium, Congress decided in 1996 to shut down the federal role.  Federal involvment in the helium market dates from World War I years when the gas was considered a strategic militarily necessity for airships.

But US industries appealed the shut-down order, arguing that without a planned private-sector-based procedure to take over the federal role, an abrupt shut-down would cause chaos.

Helium is broadly used across US manufacturing industries, and it is critical to medical sector operations, especially diagnostics such as magnetic resonance imaging (MRI) systems.

The lighter-than-air gas also plays a crucial role in welding – which is ubiquitous in almost every manufacturing and process industry, including chemicals and refining – and in such varied products as LCD video screens, computer chips, medical lasers, rocket fuels and nuclear reactors, among many others.

In congressional testimony last year, helium was identified as critical to basic research, having played a central role in about one-third of the 31 Nobel Prizes awarded for physics since 1980.

The bill approved by the committee on Wednesday is designed to transition the US helium market to the private sector.  The measure is expected to meet approval by the full House and later the Senate.

($1 = €0.77)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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