Last-minute Legislation Averts Helium Supply Crisis

Recently passed legislation will prevent a major disruption in the world's helium supply, but will cause prices to rise. The disruption would have followed the loss of authority to sell helium by the U.S. Bureau of Land Management; however, a concerted efforts by scientists, led in part by APS, helped pass legislation in Congress that averted the crisis.

"It's a huge win for us and the membership," said Jodi Lieberman, senior government relations specialist at APS. "Our membership really stepped up."

The BLM's Federal Helium Reserve supplies about 40 percent of all the helium in the United States, and about 35 percent worldwide. Because of legislation passed in 1996, the BLM could sell helium at a fixed price only until the reserve's substantial debt was paid off. It broke even in September, and had Congress not acted, would have stopped selling its helium come October.

The new law will let the reserve continue selling helium until it is almost totally exhausted. However, now it will be selling the gas at market prices, meaning that costs for consumers will go up. Exactly how much prices rise will depend on the market, but it will be less than market experts predicted had the BLM stopped selling its supplies.

Helium is vital to numerous scientific, medical and industrial processes. Welders and microprocessor makers use the inert properties of the gas for manufacturing. Its cryogenic properties are critical for MRI machines, as well as for physicists' ultra-cold experiments.

In recent years helium shortages had started growing acute. The low cost encouraged excess consumption, eating into supplies. Scientists have reported increasing numbers of instances when suppliers were totally out of helium. The higher cost should reduce some of the overconsumption and at the same time stimulate more investment.

"The price of helium will go up and hopefully that will encourage more mining and discovering of new helium," said Moses Chan of Penn State University, who was part of a 2010 National Research Council committee that studied the impact of closing the reserve.

A bill to avert the looming "helium cliff" was first introduced in the House in February, followed by a corresponding Senate bill in late April. The bills languished in Congress until September 10, when 120 scientific, medical and industrial organizations sent an open letter to the Congressional leadership demanding action. A week later APS President Michael Turner sent an email to the entire APS membership urging them to contact members of Congress.

"Partisan gridlock threatens to diminish the US Helium supply by 50% on October 1st unless the Congressional Leadership can enact bi-partisan legislation in the next two weeks of a very busy Congressional schedule," Turner said in the email. "I ask you to call the office(s) of at least one member of the leadership today or tomorrow…to urge them to find a solution that will ensure the continued supply of Helium for the research community as well for use in MRIs and in the semiconductor industry."

The Senate passed its version of the bill by a vote of 97 to 2. The House followed a week later. Because of differences in the House and Senate bills, the Senate had to pass the House version on September 26th. The bill then went to the president for his signature on October 2.

Federal scientists and researchers operating with a federal grant will have access to the "in-kind" program, which offers helium at deeply discounted rates. Some researchers have reported that in recent years as much as 70 percent of their grant money has gone towards procuring helium.

"A lot of what happened has been price speculation," Lieberman said. She added that the artificially low price distorted the market, and potential new suppliers were priced out because of the government's subsidized gas. Now new refineries are being developed in Russia, Algeria, Qatar and Wyoming. "That's the whole goal here, to incentivize the private sector and get [them] involved."