Mineral Resources:

Federal Helium Purity Should Be Maintained

RCED-92-44: Published: Nov 8, 1991. Publicly Released: Dec 11, 1991.

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Pursuant to a congressional request, GAO examined various proposals on how the Department of the Interior's Bureau of Mines could best meet federal needs for helium, focusing on how the accelerated degradation of stored federal helium could result in additional costs to the government.

GAO found that: (1) because the Bureau is not restricting the rate at which helium is being extracted from Cliffside, a natural gas field in Amarillo, Texas, the purity of the remaining helium cloud is being degraded faster than would otherwise occur; (2) Bureau engineers and a petroleum engineering consulting firm agreed that accelerated degradation could be avoided by restricting total extractions from Cliffside to 3 million cubic feet of helium daily; (3) the Bureau can restrict the rate at which privately owned helium can be extracted from Cliffside, under the terms of its storage contracts with private companies, but has not imposed such a restriction, pending a review of a fiscal year (FY) 1989 Bureau study; (4) daily total extractions from Cliffside exceeded 3 million cubic feet 13 percent of the time during a 2-year period from April 1989 to April 1991; and (5) if the helium cloud continues to be degraded at the current rate, the Bureau will incur additional costs of as much as $23.3 million in FY 1991 dollars to extract and refine federal helium from Cliffside through FY 2050.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: P.L. 104-273, October 9, 1996, terminated the federal helium program. The law provides for gradual sale of the federal helium being stored at Cliffside.

    Recommendation: So that the helium cloud at the Cliffside field can be maintained at the highest level of purity possible, thereby avoiding additional Bureau costs to extract and refine federal helium, the Secretary of the Interior should require the Director of the Bureau of Mines to complete his review of the Bureau's 1989 study and any related documentation, including that which private industry can provide, and, if warranted, specify an acceptable extraction rate. If an extraction rate is specified, the Bureau should either: (1) restrict private company extractions of helium from Cliffside so that they do not cause total daily extractions to exceed this rate; or (2) impose a charge on the private companies that store helium in Cliffside each time their extractions, combined with Bureau extractions, exceed the established acceptable rate.

    Agency Affected: Department of the Interior

 

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