In 1996, Congress agreed to privatize the federal helium reserve with the strong support of taxpayer advocates, including Citizens Against Government Waste. The purpose was simply to end the government’s 70-year odyssey of buying, storing and refining helium.
The government would sell the crude gas at a robust price, repay the taxpayers for the debt incurred to originally purchase helium for the reserve and, when that was done, use any additional proceeds to reduce the budget deficit.
Today, those objectives have almost been achieved, but Congress just can’t seem to follow through on its original intent. The debt will be paid off in October. Under current law, revenue from continued operations would go directly to the Treasury. But there are billions of cubic feet of valuable crude helium remaining in the reserve, so members of Congress cannot resist deviating from the original plan.
In April, the House of Representatives passed HR 527, the problematic Responsible Helium Administration and Stewardship Act, which will bring in $140 million less for taxpayers than the existing helium program does.
The bill also fails to shore up the nation’s supply of helium, a necessary commodity for MRI machines, air bags and many other products.
HR 527 also changes the long-standing, market-based rules of the current system, thereby negating the tens of millions of dollars invested by private American companies to develop the reserve’s facilities and infrastructure while rewarding those who elected not to make the same investments. These provisions would open taxpayers to significant liability for the abrogation of contractual obligations and taking of private property.
The Senate bill, S 783, the Helium Stewardship Act of 2013, includes provisions that are more consistent with the 1996 Helium Act. After existing contracts expire, S 783 establishes a new auction process with new market-based pricing that will minimize price disruptions.
Unfortunately, the Senate Energy and Natural Resources Committee added provisions that will purloin 90 percent of the projected $495 million in revenue for a variety of pet projects promoted by committee members.
Both chambers, however, are trying to fix a program that isn’t broken. All that is needed is a replacement for the program’s self-funding mechanism, which expires in October. This requires a routine appropriation that maximizes the financial benefit to the public of selling the government’s remaining excess helium. And the return to taxpayers would be even greater if the Bureau of Land Management exercised its existing authority to price government-owned helium in a more profitable manner.
The final insult to taxpayers is contained in a new provision of S 783 that sets aside five times more helium in the reserve than the amount set in the 1996 act, raising it from 600 million cubic feet to 3 billion cubic feet. The rationale was that the government needed that amount for strategic purposes.
Either blimps are making a comeback, or the next generation of drones will be filled with helium.
Tom Schatz is president for Citizens Against Government Waste.