Helium Legislation Supported By Air Products Takes First Step Forward

A California congressman last week introduced a bill that encourages domestic helium production by companies such as Air Products in anticipation of a decision to shut down the federal helium reserve. The Helium Extraction Act of 2017 would add two dozen words to the Mineral Leasing Act so the U.S. Bureau of Land Management can lease federal land for the purpose of helium production under the same lease terms as oil and gas. Rep. Paul Cook, a Republican from California, introduced the bill Tuesday — a day before the penultimate BLM auction of crude helium from its 91-year-old stockpile, which holds enough helium to account for roughly 40 percent of domestic demand but is scheduled to close in September 2021. Currently, companies can lose leases on federal land after a decade if they’re not using them to produce either oil or natural gas. Walter L. Nelson, vice president and manager of Air Products’ global helium business, said last month that companies need to be able to make helium-focused investments on federal land if the U.S. wants to mitigate the impact of closing the reserve. Nelson offered testimony on a “discussion draft” of the bill at a House of Representatives committee hearing in June. He said the ability to lease federal land for helium production would make the country less dependent on major foreign suppliers. “Prompt passage of this legislation will help to unlock the door for future helium developments in the United States, another step to ensure a long-term domestic helium supply is available for those industries that fully depend on this rare and precious element,” Nelson said during his testimony. After the U.S., the second largest sovereign supplier of helium is Qatar, which shut down two helium plants last month because of a economic blockade imposed by Saudi Arabia and its regional allies. While new supply chains in Qatar are beginning to form and the plants are back in production, the political issue concerns domestic policymakers. “The looming helium crisis must be dealt with now,” Cook said in a news release. “Without this bill, we could become dangerously dependent on unstable foreign countries for our supply of helium. This bill encourages the development of American sources of helium and will boost both our national security and economy.” Helium is crucial to MRI systems, semiconductors, fiber optics, rocket launches, deep sea diving, electronics, welding and more. Helium is lighter than every element except hydrogen, and unlike hydrogen, it doesn’t burn. It’s also rare on Earth. Helium only develops in certain natural gas reservoirs where there’s radioactive decay of uranium and thorium. Industrial gas companies will only bother refining it if the concentration is high enough to make production economically worthwhile. Phil Kornbluth, president of Kornbluth Helium Consulting of Bridgewater, N.J., said the legislation would allow companies to extract a modest amount of helium relative to the world supply. Still, he called the amendment a “no-brainer” and was cautiously optimistic the bill would be approved. “If legislators leave it as a one-sentence bill, there’s a very good chance of it going through as an attachment to another piece of legislation,” he said. “But it doesn’t always work that way in Washington.” The bill has been referred to the House Natural Resources committee. The BLM is nearing the end of a gradual privatization process of the Federal Helium Reserve near Amarillo, Texas and the pipeline and storage system in the Texas panhandle. A 2013 bill required the BLM to hold annual auctions and sales until the reserve reached a minimum level of 3 billion cubic feet. Air Products, one of the leading global helium suppliers, operates helium refining plants along the pipeline in Texas and Kansas. Last Wednesday, the company spent nearly $46 million to acquire more than three-quarters of the crude helium the BLM put up at its second-last auction. No other company bought more than 6 percent. Kornbluth said companies are looking to accumulate helium inventory so they can extend the lives of the plants after the BLM stops selling its product next year. “Given that this was the next-to-last auction, bidding was more aggressive,” he said.

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