The National Academies of Sciences, Engineering and Medicine
Office of Congressional and government Affairs
At A Glance
: Up in the Air: The BLM's Disappearing Helium Program
: 5/10/2012
Session: 112th Congress (Second Session)
: Moses Chan

Evan Pugh Professor of Physics, Pennsylvania State University and Member, Committee on Understanding the Impact of Selling the Helium Reserve, Division on Engineering and Physical Sciences, National Research Council, The National Academies

: Senate
: Energy and Natural Resources Committee


Up in the Air: The BLM's Disappearing Helium Program



Testimony of

Moses Chan, PhD
Evan Pugh Professor of Physics
Pennsylvania State University
Member, Committee on Understanding the Impact of Selling the Helium Reserve
Division on Engineering and Physical Sciences
National Research Council
The National Academies

before the

Committee on Energy and Natural Resources
U.S. Senate


May 10, 2012

Good morning, Mr. Chairman, Ranking Member Murkowski, and members of the Committee. My name is Moses Chan. I am a Professor of Physics at Penn State University and a member of the National Research Council’s Committee on Understanding the Impact of Selling the Helium Reserve.1

I will be discussing the study prepared by that committee as part of testimony on S. 2374, The Helium Stewardship Act of 2012. The study was commissioned by the Department of the Interior’s Bureau of Land Management (BLM) and the principal task of our committee was to determine whether the sell-off of the nation’s helium reserve as prescribed by law has had an adverse effect on the United States’ scientific, technical, biomedical, and national security users of helium. Our committee concluded that the sell-off has had and will continue to have adverse effects and we developed a series of recommendations to address several outstanding issues with respect to the reserve.

To provide context for those recommendations, I will first give a brief overview of our critical helium needs, with a focus on the plight of the small research user community, and also discuss those uses where substitutes or conservation and recycling are possible. I will follow this with a discussion on several matters addressed in the report—helium supply issues, the federal helium reserve itself, and the sale of federally owned helium. My testimony will conclude with a discussion of the committee’s major recommendations regarding the reserve and its management in the future.

Uses of Helium

Ready access to affordable helium is critical to many sectors in academe, industry and government and the range of those uses is quite impressive, enabling research at the coldest of temperatures, weather monitoring, surveillance in areas of combat, and optical fiber production, among many other applications.

The diversity in uses for helium arises from its unique physical and chemical characteristics—specifically, its stable electronic configuration and low atomic mass. Among those unique characteristics are the temperatures at which helium undergoes phase transitions (liquefies and freezes). Helium has the lowest melting and boiling points of any element: It liquefies at 4.2 Kelvin and 1 atmosphere and solidifies only at extremely high pressures (25 atmospheres) and low temperatures (0.95 Kelvin). These characteristics have led to many cryogenic applications for helium; the largest single category of applications by percentage of helium consumed. These range from the efforts of individuals engaged in small-scale cryogenic research to large groups using high-energy accelerators and high-field magnets. All rely upon helium to conduct their research and because the federal government supports many of these researchers, it has a direct stake in their continued success. Cryogenic users also include segments of the medical profession, not only for biological research in devices such as superconducting quantum interference devices (SQUIDS), but also for diagnosis with tools such as magnetic resonance imaging (MRI) devices.

Helium’s ability to remain liquid at extremely low temperatures also gives rise to its usage for purging and pressurizing systems and as such, helium is a critical component in our nation’s space exploration and defense efforts. The National Aeronautics and Space Administration (NASA) and the Department of Defense (DOD) use significant amounts of helium, as it is the only gas that can be used to purge and pressurize the tanks and propulsion systems for rockets fueled by liquid hydrogen and oxygen.

Other uses rely on helium’s lifting capabilities. As the second lightest element, gaseous helium is much lighter than air, causing it to be quite buoyant. When combined with helium’s chemical inertness—especially when compared with the highly flammable alternative, hydrogen—its buoyancy makes helium an ideal lifting gas. NASA and the Department of Energy (DOE) use helium to support weather-related missions and various research and development programs funded by these agencies, both at government facilities and at universities. DOD also must have ready access to helium to operate the balloon- and dirigible-based surveillance systems needed for national security.

Other applications draw on other characteristics of helium—its relatively high thermal conductivity, low viscosity, and high ionization potential—either alone or in combination. These applications include welding, providing controlled atmospheres for manufacturing operations, and detecting leaks in equipment providing vacuum environments to science and industry. Table 1 summarizes the principal applications of helium and the share of use in the United States.

Small-Scale Researchers. Among the events that triggered this study were soaring prices and limited supplies that characterized the refined helium market in the fall of both 2006 and 2007. The committee, composed of individuals from a wide range of professions—economists, business people, and scientists—noted that small-scale scientists were particularly hard hit by price shocks and interruptions in the supply of refined helium during that time. An informal poll conducted by committee members of approximately 40 research programs at universities and national laboratories that use helium indicated that shortages of liquid helium interrupted the helium supply for almost half of these programs, with some interruptions lasting for weeks at a time during the late summer and fall of both 2006 and 2007. For many of those scientists, losing access to helium, even temporarily, can have long-term negative repercussions for their research.

In general, the federal grant programs that support these researchers simply are not designed to cope with significant pricing shifts and other market volatilities experienced here. Grants typically are for a two to three year period and for a set amount that does not adjust if a principal expense of research such as helium significantly increases. Further, the relatively short duration of such grants, with no guaranty of renewal, effectively precludes these research programs from entering into long-term contracts that might at least partially reduce the risk of significant prices increases and shortages.

Domestic vs. foreign consumption. The balance between domestic and foreign consumption of helium has shifted significantly in the past 15 years. Until the mid-1990s, substantially all helium production took place in the United States. This factor, combined with high shipping costs and limited availabilities, meant that until recently, the amount of helium consumed abroad was fairly small. In 1990, for example, 70 percent of worldwide helium consumption was in the United States.

Since 2000, the demand for helium in the United States has remained fairly constant but has grown significantly elsewhere, reducing the U.S. share of total consumption. See Figure 1. Foreign growth has been assisted by the opening of several helium-producing facilities outside the United States that will be discussed later in this testimony, as well as by improved capabilities in the short-term storage and handling of refined helium. This period also saw a significant increase in industrial applications, principally in semiconductor and optical fiber fabrication facilities outside the United States, and the shifting of industrial facilities that use helium from the United States to foreign countries. By 2007, United States helium consumption had dropped to below 50 percent of worldwide demand. Despite a slight downturn in overall demand for helium associated with the global recession in 2008-2009, the committee believed, based on recent trends, that foreign demand should continue to increase relative to demand in the United States.

Substitution, Conservation, Recovery. For some applications, other gases can replace helium, but other applications rely critically on helium’s unique properties and there are no alternatives. Applications in the first category, where substitutes for helium might exist, include these:

  • Lifting. For these uses, where low density is the only requirement, hydrogen is sometimes substituted if safety concerns can be met.
  • Welding. Here, chemical inertness is the key property. For processes such as gas tungsten arc welding—a critical process applicable to reactive metals such as stainless steel, titanium, aluminum, and others in high-value, high-reliability applications—Europe mostly uses argon, while the United States uses helium.
  • Semiconductor and fiber optics manufacturing. In these applications, high thermal conductivity is the important property. Often, hydrogen may be substituted.

In the above applications, economics, market conditions, availability, safety, and legislation can influence the choice among helium and other gases.

In contrast, other applications require the unique properties of helium, typically relying on the extremely low boiling point of liquid helium to achieve a desired result. These applications include the following:

  • Purging/Pressurizing. Entities such as NASA and DOD must purge and then pressurize liquid hydrogen (LH2) and liquid oxygen (LOx) rocket propulsion systems and fuel tanks that may be at liquid air temperatures or colder. Although gaseous hydrogen might have the right physical properties for use in LOx systems, its reactivity with oxygen precludes its use. Nitrogen is not desirable because nitrogen might contaminate the LOx. In LH2 environments, all gases other than helium and hydrogen would freeze, clogging fuel lines and systems and rendering the rocket engines nonfunctional.
  • Superconductivity. All applications that employ superconducting magnets, including medical magnetic resonance imaging (MRI) machines, high energy accelerators and many high field magnets used in research, rely on the continued availability of helium. Current materials and technologies dictate that only helium can act as the crucial refrigerant to cool these materials below superconducting thresholds.
  • Basic research. Here, no other substance can be used as a refrigerant to achieve temperatures from 4.2 K above absolute zero down to millikelvins.

Supply of Helium

Sources. Helium is the second-most-abundant element in the universe, but its diffusive properties mean that atmospheric helium leaks into space, rendering it relatively scarce on Earth. At only 5.2 parts per million (ppm) in air, it is not economically feasible to extract helium from the atmosphere using current technology. Rather, the principal source of helium is natural gas fields. Helium nuclei (or alpha particles) are produced in the radioactive decay of heavy elements such as uranium and thorium, located in Earth’s crust. While most of these helium atoms find their way to the surface and escape, a small fraction are trapped by the same impermeable rock strata that trap natural gas. Such natural gas usually consists primarily of methane and secondarily of ethane, propane, butane, and other hydrocarbons and various other contaminants, including H2S, CO2, and He.

There are three different situations in which helium contained in natural gas may be economically recovered:

  • Helium may be extracted as a secondary product during the primary process of producing methane and natural gas liquids (NGLs) such as propane, ethane, butane, and benzene.
  • For natural gas fields that have sufficient concentrations of helium and other non-fuel gases such as sulfur and CO2 to economically justify their extraction, the gas in those fields may be directly processed for the non-fuel constituents.
  • Helium may be extracted during the production of liquefied natural gas (LNG), which consists primarily of liquefied methane.

For the first two recovery processes, current technology requires threshold concentrations of 0.3 percent helium before separation of the helium is commercially feasible. For the third process, the helium is extracted from the tail gases, the gases that remain after the methane has been liquefied. The helium concentration in those tail gases is much higher than in the original gas, allowing the economical extraction of helium even through the original natural gas might contain as little as 0.04 percent helium.

Figure 2 shows the principal domestic sources of helium. Historically, most helium in the United States has been recovered using the first method described above, as a byproduct of producing methane and natural gas liquids. Almost all of that helium has been produced in the mid-continental region around the Hugoton Field. As is described in later testimony, this is where the federal helium reserve system is located. The Hugoton Field is mature and the production of methane, NGL and secondary products such as helium from that field is expected to significantly decline over the next several years. In the last few decades, helium has been produced in Wyoming using the second method described above, where the natural gas is directly processed for its helium and other non-fuel content. Potential helium reserves have also been explored in the Four Corners area.

Outside of the United States, only small reserves of the first two sources of helium have been exploited and for many years, the rest of the world has relied upon the United States as their principal source of helium. Recently, the development of large LNG facilities has opened up new, potential sources of helium. The principal countries in which those facilities are being developed are Algeria, Qatar, and Russia, with smaller facilities coming online in Australia. These areas are expected to become increasingly more important sources of helium as the Hugoton and adjoining fields mature. See Figure 3.

Supply Chain. After being refined, helium is transported to end users through a fairly complicated supply chain. In the United States, the helium typically is liquefied and delivered by refiners either to their transfill stations situated throughout the United States or to distributors of industrial gases. This transportation is handled using expensive domestic tanker trucks or bulk-liquid shipping containers standardized according to the International Organization for Standardization (ISO), each of which holds approximately 1.0 to 1.4 million cubic feet (MMcf) of helium. While some of the largest helium users contract directly with a refiner for their helium purchases and deliveries, most sales to end users are through the retail division of a refiner or a distributor. The refiners and distributors then repackage the helium, either in its liquid state into dewars—evacuated, multiwalled containers designed to hold liquid helium—of varying sizes or in its gaseous state into pressurized cylinders, tube-trailers, or other modules as needed by the end users.

Federal Policy Regarding Helium

Helium has long been the subject of public policy deliberation and management, largely because of its many strategic uses and its unusual source. Shortly after natural gas fields containing helium were discovered at the beginning of the last century, the U.S. government recognized helium’s potential importance to the nation’s interests and placed its production and availability from federally owned mineral interests under strict governmental control. In the early years, helium principally was used for its lifting capability, as a safe alternative to highly flammable hydrogen. By the mid-1920s full-scale production facilities had been built and were being operated by the federal government to support its lighter-than-air aviation programs.

In the 1960s, helium’s strategic value in cold war efforts was reflected in policies that resulted in the creation of the federal helium reserve. Although much of the infrastructure predates the cold war, the Federal Helium Reserve as a program began and currently consists of

  • The Bush Dome reservoir, a naturally occurring underground structural dome in the Cliffside Field near Amarillo, Texas, where federally owned (and some privately owned) crude helium is stored;
  • An extensive helium pipeline system running through Kansas, Oklahoma, and Texas (the Helium Pipeline) that connects crude helium extraction plants with each other, with helium refining facilities, and with the Bush Dome reservoir,
  • Various wells, pumps and related equipment used to pressurize the Bush Dome reservoir, to place into and withdraw crude helium from it, and to operate other parts of the helium reserve.

The 1960s efforts also included inducements for private companies to develop helium extraction and refining facilities and to sell crude helium to the United States. The program was quite successful, resulting in the accumulation of approximately 35 billion cubic feet (Bcf) of helium by the mid 1970s. This amount was many times the 600 (750?) million cubic feet (MMcf) of helium then being consumed domestically (annually?) (globally) and so further purchases were suspended. The amount of helium maintained in the helium reserve remained fairly constant for the next 20 years.

The latest manifestation of public policy is expressed in the Helium Privatization Act of 1996 (1996 Act), which directs that substantially all of the helium accumulated as a result of those earlier policies be sold off by the year 2015, at prices sufficient to repay the federal government for its outlays associated with the helium program, plus interest.

Context of Current Study. The last section of the 1996 Act called for the Secretary of the Interior to commission a study from the National Academies to determine whether disposal of federally owned helium pursuant to the 1996 Act would have a substantial adverse effect on critical interests of the country. The report that followed (2000 Report) found that because the helium market had been quite stable since the 1980s and the price at which federally owned helium must be sold under the 1996 Act was significantly higher than the price at which privately owned crude helium was then being sold, the sell off of the helium would not have a substantial adverse effect on critical users. The report predicted that the price of privately owned crude would gradually rise to the price at which federally owned helium was being offered, and until it reached that level very little federally owned helium would be purchased, given the availability of cheaper sources.

While the helium market remained fairly stable for several years after issuance of the 2000 Report, that report did not accurately predict the market’s response to efforts to sell-off federally owned helium. In March 2003, when BLM first offered federally owned helium for sale, the entire 1.6 Bcf offered for sale was purchased. Rather than gradually rising, the prices for privately owned crude helium rapidly rose such that by 2007, those prices were on par with and often exceeded the legislatively prescribed price for federally owned helium. Retail prices for helium commensurably rose, more than doubling between 2003 and 2008. In addition, during the summer and fall of 2006 and 2007, the helium market encountered widespread shortfalls, with some of the interruptions lasting for weeks at a time.

The amount of federally owned helium being sold is enormous: at the time our report was issued in 2010, it was equivalent to approximately one-half of U.S. helium needs and almost one-third of global demand. One consequence is that the price of federally owned helium, which is set not by current market conditions but by the terms of the 1996 Act, dominates, if not actually controls, the price for crude helium worldwide.

Committee Findings, Recommendations. As mentioned at the beginning of this testimony, the principal charge of our committee was to determine whether the sell-off of the nation’s helium reserve as prescribed by law has had an adverse effect on the United States’ scientific, technical, biomedical, and national security users of helium. In response to this charge, the committee determined that selling off the helium reserve, as required by the 1996 Act, has adversely affected critical users of helium and is not in the best interest of U.S. taxpayers or the country. The sell-down of federally owned helium, which had originally been purchased to meet the nation’s critical needs, is coming at a time when demand for helium by critical and noncritical users has been significantly increasing, especially in foreign markets. If this path continues to be followed, within the next ten to fifteen years the United States will become a net importer of helium whose principal foreign sources of helium will be in the Middle East and Russia.

In addition, the pricing mandated by the 1996 Act has triggered significant increases in the price of crude helium, accompanied by equally significant increases in the prices paid by end users. Finally, the helium withdrawal schedule mandated by the 1996 Act is not an efficient or responsible reservoir management plan. If the reserve continues to be so managed, a national, essentially nonrenewable resource of increasing importance to research, industry, and national security will be dissipated.

The committee recommends several ways to address the outstanding issues. Several of its recommendations respond to the very large impact that selling off the reserve has had and is continuing to have on the helium market in general, including a recommendation that procedures be put in place that open the price of federally owned helium to the market.

Another of the committee’s concerns is that the drawdown schedule required by the 1996 Act, which dictates that the reserve helium be sold on a straight-line basis—the same amount must be sold each year until the reserve is substantially gone—is a wasteful way to draw down a reservoir. Because it is much more costly and more likely to leave significant amounts of helium unrecoverable than alternative drawdown scenarios, the committee recommends that this portion of the 1996 Act be revisited. In addition, given recent developments in the demand for and sources of helium (the principal new sources of helium will be in the Middle East and Russia, and if the sell-down continues, the United States will become a net importer of helium in the next 10 to 15 years), the committee recommends that Congress reconsider whether selling off substantially all federally owned helium is still in the nation’s best interest.

The committee also addresses the needs of small-scale government-funded researchers who use helium, a group that has been hit particularly hard by sharp price rises and shortages that have characterized the helium market in recent times. This group was singled out mainly because such research is an important public enterprise and the funding mechanisms available to the researchers, typically grants on 3-year cycles for set amounts, do not allow them to respond to short-term fluctuations. These research programs should have some protection from the instabilities recently characterizing the helium market. Accordingly, the committee recommends that the researchers be allowed to participate in an existing program for government users of helium that would give them priority when there is a helium shortage. It also recommends that funding agencies help such researchers to acquire equipment that would reduce their net helium requirements. Implementing these recommendations would not subsidize such users nor would it require significant additional outlays: Indeed, over time, it would lead to the much more efficient use of the federal funds with which helium is purchased.

Because the helium market is rapidly changing and helium is critically important to many critical users, the committee includes recommendations that would facilitate long-range planning to meet the nation’s helium needs, including the collection and dissemination of needed information and the formation of a standing committee to regularly assess whether national needs are being appropriately met. The remaining conclusions and recommendations consist of steps to help properly manage the helium reserve and protect this important national resource. The language of the committee’s full recommendations is contained in the summary of the report, which is attached to this statement.

Finally, while noting that the question of how critical helium users in the United States will be assured a stable supply of helium in the future is beyond the scope of its charge, the committee points out that several important issues related to this topic remain unanswered. How will the large amounts of federally owned helium that remain after the mandated sell-off deadline in 2015 be managed after that date? Moreover, from a wider perspective, should a strategic helium reserve be maintained? These questions need to be answered in the near future, well before most federally owned helium is sold.

This concludes my testimony to the committee. Thank you for the opportunity to testify on this important topic. I would be happy to elaborate on any of my comments during the question and answer period.


1. The National Research Council is the operating arm of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine of the National Academies, chartered by Congress in 1863 to advise the government on matters of science and technology.



TABLE 1 - Helium Uses in the United States



Representative Application

U.S. Share (%)





Magnetic resonance imagining



Fundamental science



Industrial cryogenic processing






Space and defense rocket purging and pressurizing





Controlled Atmospheres




Optical fiber manufacturing



Semiconductor manufacturing



lifting gas/heat transfer







Weather balloons



Military reconnaissance



Heat transfer in next-generation nuclear reactors



Party balloons


Leak detection



Breathing mixtures

Commercial diving


SOURCE: USGS, 2007.  These data are extrapolated from data in a USGS survey conducted by BLM personnel in 2003.  Current shares are not known precisely but are expected to be approximately as shown.



Helium 3-1

FIGURE 1.  Market demand for refined helium in the United States (blue), in other countries (red), and worldwide (green line) for the years 1990 through 2008.  SOURCE: U.S. Geological Survey 1990-2008 Minerals Yearbook (Helium).



Helium 3-2
Figure 2.  The United States crude helium supply system.  Historically, the Hugoton and surrounding fields have been the principal sources of helium.  Recently, natural gas fields in Wyoming with rich helium and other non-fuel content have become an increasingly important supply of helium, while potential new fields are located in the Four Corners area.  SOURCE:  U.S. Geological Survey 2006 Minerals Yearbook (Helium).



Helium 3-3

FIGURE 3.  Actual (2005 and 2008) and estimated (2015 and 2020) crude helium capacities by crude helium source. Light blue represents helium available through the sell-off of the federal helium reserve; medium blue represents crude helium being produced from neighboring natural gas fields such as the Hugoton Field by those refining facilities connected to the helium pipeline; dark blue are domestic helium sources, principally in Wyoming, not connected to the helium pipeline; brown are foreign sources of helium.


An archived webcast of the hearing can be found on the Senate Energy and Natural Resources Committee Web site.