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United States Government Accountability Office: 
GAO: 

Testimony: 

Before the Committee on Natural Resources, House of Representatives: 

For Release on Delivery: 
Expected at 10: 00 a.m. EST: 
Thursday, February 14, 2013: 

Helium Program: 

Urgent Issues Facing BLM's Storage and Sale of Helium Reserves: 

Statement of Daniel Garcia-Diaz, Director: 
Natural Resources and Environment: 

GAO-13-351T: 

GAO Highlights: 

Highlights of GAO-13-351T, a testimony before the Committee on Natural 
Resources, House of Representatives. 

Why GAO Did This Study: 

The federal government has been extensively involved in the 
production, storage, and use of helium since the early part of the 
twentieth century. The federal helium program is currently managed by 
the Department of the Interior’s BLM. During the 1960s and early 
1970s, Interior purchased about 34 billion cubic feet of crude helium 
for conservation purposes and to meet federal helium needs, such as 
for the space program and scientific research. Crude helium is a gas 
of 50 to 85 percent helium. While some of this helium was used to meet 
federal needs, most of it was retained in storage. The funds used to 
purchase this helium became a debt owed by the program. BLM now sells 
crude helium from the reserve, and the proceeds go into the revolving 
Helium Fund, which is used to finance the program and payoff the 
program’s debt. 

GAO reported on the management of the helium program in the 1990s 
[hyperlink, http://www.gao.gov/products/GAO/RCED-92-44] and 
[hyperlink, http://www.gao.gov/products/GAO/RCED-93-1]. 

Since GAO’s reviews of the program in the 1990s, key changes have 
affected the program, and a 2010 report by the National Academies’ 
National Research Council concluded that it is time to reassess the 
program. GAO testified on the helium program in May 2010 [hyperlink, 
http://www.gao.gov/products/GAO-10-700T]. This testimony is an update 
of GAO’s May 2010 testimony and discusses (1) how the Helium 
Privatization Act of 1996 addressed issues raised by GAO in the 1990s 
and (2) three urgent issues facing the helium program in the near 
future. 

What GAO Found: 

Since GAO’s reports in the early 1990s, the Helium Privatization Act 
of 1996 has caused considerable changes to the helium program and 
addressed or altered GAO’s prior concerns. In 1992, GAO reported on 
various aspects of the federal helium program including the helium 
debt, pricing, and alternatives for meeting federal helium needs. 

* Helium debt. In 1992, GAO recommended that Congress cancel the 
helium program’s debt since doing so would not adversely affect the 
federal budget, as the debt consisted of outlays that had already been 
appropriated and interest that was a paper transaction. As of 
September 1991, this debt had grown to about $1.3 billion, over $1 
billion of which was interest that had accrued on the original debt 
principal of about $290 million. The 1996 act did not cancel the debt 
as GAO had recommended, but it did freeze the growth of the program’s 
debt and, as a result, the debt should be paid off this year. 

* Helium pricing. The helium debt was also a factor in setting the 
price of federal helium. In 1992, GAO recognized that, if the helium 
debt was canceled, Congress might need to propose a new pricing 
scheme. The 1996 act requires a specific method for pricing helium. 
This, along with other changes in the supply and demand for helium, 
has resulted in the Bureau of Land Management’s (BLM) price to be at 
or below the market price. 

* Alternatives for meeting federal helium needs. In 1992, GAO 
recommended that Congress reassess the conservation objectives of the 
helium program and consider other alternatives to meet federal helium 
needs. In resetting the program’s objectives, the 1996 act directed 
Interior to stop refining helium and established a modified in-kind 
approach for meeting federal helium needs. Agencies must purchase 
helium from refiners that then purchase an equivalent amount of crude 
helium from BLM. 

Changes in the helium market have generated concerns about the future 
availability of helium for federal and other needs. The Helium 
Privatization Act of 1996 did not provide a specific direction for the 
federal helium program past 2015. Three urgent issues facing the 
program are as follows: 

* How will the helium program be funded after 2013? If the helium 
program’s debt is paid off this year, as expected, the revolving 
Helium Fund will be terminated as required by the 1996 act. When GAO 
last testified on this issue, the estimated payoff date was 5 years 
away in 2015. The schedule has accelerated primarily because of 
improved crude helium sales. 

* At what price should BLM sell its helium? In the past, the debt has 
been a factor in the price, and the price has been above the market 
price. After 2013, the debt will be paid off, and the current price is 
at or below market. 

* How should the helium owned by the federal government be used? BLM’s 
effort to sell off the excess helium in storage will not be completed 
by January 1, 2015, as required by the 1996 act. As of September 30, 
2012, there were 11.44 billion cubic feet of conservation helium in 
storage. After BLM is finished drawing down the reserve, some believe 
that the United States could become a net importer of helium. 

What GAO Recommends: 

GAO is not making any recommendations in this testimony. 

View [hyperlink, http://www.gao.gov/products/GAO-13-351T]. For more 
information, contact Daniel Garcia-Diaz at (202) 512-3841 or 
garciadiazd@gao.gov. 

[End of section] 

Chairman Hastings, Ranking Member Markey, and Members of the Committee: 

I am pleased to be here today to discuss the federal helium program 
currently managed by the Department of the Interior's (Interior) 
Bureau of Land Management (BLM). As you know, helium is an important 
nonrenewable natural resource that has a variety of uses. The federal 
government uses helium for, among other things, the space program, 
national security applications, and scientific research. For many of 
its uses, helium has no substitute. 

During the 1960s and early 1970s, to fulfill the conservation 
objective of the Helium Act Amendments of 1960,[Footnote 1] Interior 
purchased about 34 billion cubic feet of helium from private crude 
helium producers.[Footnote 2] In the 1990s, we reported to, and 
testified before the Subcommittee on Energy and Mineral Resources on 
Interior's management of the federal helium program.[Footnote 3] In 
May 1993, we testified that Interior had enough helium in storage to 
meet federal needs until at least 2070 and that a reassessment of the 
objectives of the Helium Act was needed. 

Since our reports in the early 1990s, key changes have affected the 
federal helium program, and a 2010 report by the National Academies' 
National Research Council concluded that it is time once again to 
reassess the program.[Footnote 4] We revisited our work from the 
1990s, and we raised some issues facing BLM's helium program in our 
May 13, 2010, testimony before this Committee's Subcommittee on Energy 
and Mineral Resources.[Footnote 5] My testimony today will describe 
(1) how the Helium Privatization Act of 1996 addressed issues we 
raised in the 1990s and (2) three urgent issues facing the helium 
program in the near future. This testimony summarizes and updates the 
information presented in our May 2010 testimony. Our May 2010 
testimony was a performance audit conducted in accordance with 
generally accepted government auditing standards. A detailed 
description of our scope and methodology is presented in our May 2010 
testimony.[Footnote 6] 

Background: 

Helium is an inert element that occurs naturally in gaseous form and 
has a variety of uses (see table 1).[Footnote 7] Helium's many uses 
arise from its unique physical and chemical characteristics. For 
example, helium has the lowest melting and boiling point of any 
element and, as the second lightest element, gaseous helium is much 
lighter than air. 

Table 1: Estimated Helium Uses in the United States, 2010: 

Category of use: Cryogenics; 
Examples of applications: Magnetic resonance imagining (MRI) 
Fundamental science Industrial cryogenic processing; 
Amount used (million cubic feet): 480; 
Percentage: 26%. 

Category of use: Controlled atmospheres; 
Examples of applications: Optical fiber manufacturing Semiconductor 
manufacturing; 
Amount used (million cubic feet): 407; 
Percentage: 22%. 

Category of use: Pressure/purge; 
Examples of applications: Space and defense rocket purging and 
pressurizing; 
Amount used (million cubic feet): 314; 
Percentage: 17%. 

Category of use: Welding; 
Examples of applications: Metal welding; 
Amount used (million cubic feet): 314; 
Percentage: 17%. 

Category of use: Chromatography/lifting gas/heat transfer; 
Examples of applications: Chromatography Weather balloons Military 
reconnaissance Heat transfer in next-generation nuclear reactors Party 
balloons; 
Amount used (million cubic feet): 220; 
Percentage: 12%. 

Category of use: Leak detection; 
Examples of applications: Leak detection; 
Amount used (million cubic feet): 76; 
Percentage: 4%. 

Category of use: Breathing mixtures; 
Examples of applications: Commercial diving; 
Amount used (million cubic feet): 36; 
Percentage: 2%. 

Category of use: Total; 
Amount used (million cubic feet): 1,846; 
Percentage: 100%. 

Sources: U.S. Geological Survey's 2010 Minerals Yearbook and the 
National Research Council. 

Note: Totals may not add because of rounding. 

[End of table] 

Certain natural gas fields contain a relatively large amount of 
naturally occurring helium, which can be recovered as a secondary 
product. The helium is separated from the natural gas and stored in a 
concentrated form that is referred to as crude helium because it has 
yet to go through the final refining process.[Footnote 8] The federal 
government has a reserve of crude helium that is stored in the ground 
in an area of a natural gas field that has a naturally occurring 
underground structural dome near Amarillo, Texas. In addition to the 
federal government's reserve of crude helium, private companies that 
are connected to BLM's pipeline and pay a storage fee, are also able 
to store and retrieve their own private crude helium reserves from the 
same storage area. 

The federal government has been extensively involved in the 
production, storage, and use of helium since the early part of the 
twentieth century. The federal government and private sector 
cooperatively produced helium before 1925, specifically for military 
uses. The Helium Act of 1925,[Footnote 9] as amended, assigned 
responsibility for producing helium for federal users to Interior's 
Bureau of Mines.[Footnote 10] From 1937 until 1960, the Bureau of 
Mines was the sole producer of helium. The act provided that funds 
from helium sales be used to finance the program by establishing a 
revolving fund known as the helium production fund. Such revolving 
funds are used to finance a cycle of business-type operations by 
charging for the sale of products and then using the proceeds to 
finance their spending. In the federal budget, this fund is referred 
to as the Helium Fund, and it is used to account for the program's 
revenues and expenses. 

The Helium Act Amendments of 1960 stipulated that the price of federal 
helium cover all of the helium program's costs, including interest on 
the program's debt. The 1960 act required the Secretary of the 
Interior to determine a value for net capital and retained earnings, 
establish this value as debt in the Helium Fund, and add subsequent 
program borrowings to that debt. The program's borrowings were 
authorized by subsequent appropriations acts and recorded as outlays 
in the federal budget in the years in which they were expended. In 
addition, the interest was added to the debt in the Helium Fund. 
However, this interest is simply a paper transaction, not a government 
outlay. The Bureau of Mines determined that the value of the program's 
net capital and retained earnings was about $40 million in 1960. 
Subsequent borrowings from the U.S. Treasury totaling about $252 
million were used to purchase helium for storage. By September 30, 
1991, the debt had grown to about $1.3 billion, of which more than $1 
billion consisted of interest because the interest accrued faster than 
the program could repay the debt. 

The Helium Privatization Act of 1996 significantly changed the 
objectives and functions of Interior's helium program.[Footnote 11] 
For example, the 1996 act made the following key changes: 

* Interior was required to close all government-owned refined helium 
production facilities and to terminate the marketing of refined helium 
within 18 months of enactment (50 U.S.C. § 167b(b),(c)); 

* the helium program's debt was frozen as of October 1, 1995 (50 
U.S.C. § 167d(c)); 

* Interior was required to offer for sale all but 600 million cubic 
feet of the crude helium in storage on a straight-line basis--a 
depreciation method that spreads out the cost of an asset equally over 
its lifetime--by January 1, 2015 (50 U.S.C. § 167f(a)(1)); 

* Interior was required to set sale prices to cover the crude helium 
reserve's operating costs and to produce an amount sufficient to repay 
the program's debt. The price at which Interior sells crude helium was 
required to be equal to or greater than a formula that incorporates 
the amount of debt to be repaid divided by the volume of crude helium 
remaining in storage, with a consumer price index adjustment (50 
U.S.C. §§ 167d(c), 167f(a)(3)). Furthermore, when the debt is fully 
paid off, the revolving Helium Fund shall be terminated (50 U.S.C. § 
167d(e)(2)(B)); 

* Interior was allowed to maintain its role in the helium storage 
business (50 U.S.C. § 167b(a)); and: 

* established a modified "in-kind" program to meet federal needs for 
helium. Rather than purchasing refined helium directly from Interior, 
federal agencies were required to purchase their major helium 
requirements from persons who have entered into enforceable contracts 
to purchase an equivalent amount of crude helium from Interior (50 
U.S.C. § 167d(a)).[Footnote 12] 

As directed by Congress, the National Academies' National Research 
Council reviewed the helium program and released a report in 2000 that 
evaluated the changes made in the program, the effects of these 
changes on the program, and several scenarios for managing the federal 
government's reserve of helium in the future.[Footnote 13] Because of 
subsequent changes in price and availability of helium, in 2008, the 
National Research Council convened a committee to determine if the 
current implementation of the helium program was having an adverse 
effect on U.S. scientific, technical, biomedical, and national 
security users of helium. The committee reported on these effects in 
early 2010 and concluded that the current implementation of the 
program has adversely affected critical users of helium and was not in 
the best interest of the U.S. taxpayers or the country. 

The Helium Privatization Act of 1996 Addressed or Altered Our Prior 
Concerns: 

Since our reports in the early 1990s, the Helium Privatization Act of 
1996 has caused considerable changes to the helium program and 
addressed or altered our prior concerns. In October 1992, we reported 
on various aspects of the federal helium program including the helium 
debt, pricing, and alternatives for meeting federal helium needs. 
[Footnote 14] 

Helium Debt: 

In October 1992, we recommended that Congress cancel the helium 
program's debt. As of September 1991, the debt had grown to about $1.3 
billion, over $1 billion of which was interest that had accrued on the 
original debt principal of about $290 million. At that time, the 
deadline for paying off the debt was 1995. We reported that the only 
way to pay off the debt by that deadline would be to charge federal 
agencies with major requirements for helium over $3,000 per thousand 
cubic feet of helium, compared to the price at that time of $55. We 
recommended that Congress cancel the debt in the Helium Fund because 
it was no longer realistic to expect the debt to be repaid by the 
statutory deadline of 1995, and because canceling the debt would not 
adversely affect the federal budget as the debt consisted of outlays 
that had already been appropriated and interest that was a paper 
transaction. The 1996 act did not cancel the debt, as we had 
recommended, but because the 1996 act effectively froze the debt at 
$1.37 billion, and interest no longer accrued, BLM has been able to 
pay off a large portion of its debt. As of the end of fiscal year 
2012, BLM had $44 million in debt remaining, which according to BLM 
officials it expects to pay off this year (see figure 1). 

Figure 1: Balance of the Helium Debt, Fiscal Years 2003 through 2012: 

[Refer to PDF for image: line graph] 

Year: 2003; 
Remaining debt: $1.199 billion. 

Year: 2004; 
Remaining debt: $1.139 billion. 

Year: 2005; 
Remaining debt: $1.074 billion. 

Year: 2006; 
Remaining debt: $914.2 million. 

Year: 2007; 
Remaining debt: $764.2 million. 

Year: 2008; 
Remaining debt: $644.2 million. 

Year: 2009; 
Remaining debt: $579.2 million. 

Year: 2010; 
Remaining debt: $434.2 million. 

Year: 2011; 
Remaining debt: $224.2 million. 

Year: 2012; 
Remaining debt: $44.2 million. 

Source: BLM. 

[End of figure] 

Helium Pricing: 

The helium debt was also a factor in setting the price of federal 
helium. In 1992, GAO recognized that if the helium debt was canceled, 
Congress may wish to propose a new pricing scheme. The 1996 act did 
not cancel the debt, as we had recommended, but it did require a 
specific method for pricing crude helium. The initial minimum BLM 
selling price for crude helium after the act was passed was almost 
double the price for private crude helium at that time. However, after 
BLM started to sell its crude helium, according to the method 
specified in the act, the market price for crude and refined helium 
began to change. According to the National Research Council, the 
private sector began using the BLM crude price as a benchmark for 
establishing its price and, as a result, privately sourced crude 
helium prices increased and now they meet or exceed BLM's price. 
Increases in the price of crude helium have also led to increases in 
the price of refined helium (see figure 2). Refined helium prices have 
more than tripled from 2000 through 2012 pursuant to demand trends. 

Figure 2: BLM Crude Helium Price and Refined (Grade A) Price 
Estimates, Fiscal Years 2000 through 2012: 

[Refer to PDF for image: line graph] 

Price: Dollars per thousand cubic feet: 

Fiscal year: 2000; 
Crude price: $49.5; 
Estimated refined (Grade A) price range: $42-$50. 

Fiscal year: 2001; 
Crude price: $50; 
Estimated refined (Grade A) price range: $42-$50. 

Fiscal year: 2002; 
Crude price: $51.5; 
Estimated refined (Grade A) price range: $45-$52. 

Fiscal year: 2003; 
52.5; 
Estimated refined (Grade A) price range: $60-$65. 

Fiscal year: 2004; 
Crude price: $54; 
Estimated refined (Grade A) price range: $60-$65. 

Fiscal year: 2005; 
Crude price: $54.5; 
Estimated refined (Grade A) price range: $67-$73. 

Fiscal year: 2006; 
Crude price: $56.5; 
Estimated refined (Grade A) price range: $80-$85. 

Fiscal year: 2007; 
Crude price: $58.75; 
Estimated refined (Grade A) price range: $90-$105. 

Fiscal year: 2008; 
Crude price: $60.5; 
Estimated refined (Grade A) price range: $115-$135. 

Fiscal year: 2009; 
Crude price: $62.25; 
Estimated refined (Grade A) price range: $125-$145. 

Fiscal year: 2010; 
Crude price: $64.75; 
Estimated refined (Grade A) price range: $140-$160. 

Fiscal year: 2011; 
Crude price: $75; 
Estimated refined (Grade A) price range: $150-$170. 

Fiscal year: 2012; 
Crude price: $75.75; 
Estimated refined (Grade A) price range: $160-$180. 

Source: BLM. 

Note: For fiscal years 2000 through 2010, BLM had only one sale price 
for crude helium for both "in-kind" and "open market" sales. Beginning 
in fiscal year 2011, BLM instituted a new two-tier pricing system. The 
crude helium price used in the figure for fiscal years 2011 and 2012--
$75.00 and $75.75 per thousand cubic feet, respectively--is the higher 
price for "open market" sales. The lower price for "in-kind" sales for 
fiscal years 2011 and 2012 was $64.75 and $65.50 per thousand cubic 
feet, respectively. 

[End of figure] 

Alternatives for Meeting Federal Helium Needs: 

In 1992, GAO recommended that Congress reassess the conservation 
objectives of the helium program and consider other alternatives to 
meet federal helium needs. As part of the resetting of the helium 
program's objectives, the 1996 act established a revised approach for 
meeting federal needs for helium. In 1998, BLM began using in-kind 
sales to federal agencies. The in-kind regulations established 
procedures for BLM to sell crude helium to authorized helium supply 
companies and required federal agency buyers to purchase helium from 
these approved suppliers.[Footnote 15] Since the in-kind program 
started, the sales to federal agencies have fluctuated, primarily due 
to the National Aeronautics and Space Administration's unique 
requirement for large volumes of helium on a sporadic basis. Total 
federal in-kind sales for fiscal year 2012 were 160.67 million cubic 
feet (see figure 3). 

Figure 3: In-Kind Helium Sales by Federal Agency, Fiscal Years 2003 
through 2012: 

[Refer to PDF for image: multiple line graph] 

Sales by volume: million cubic feet: 

Fiscal year: 2003; 
NASA: 120.459; 
Total DOD: 23.671; 
DOE: 29.075; 
Other federal agencies: 29.342. 

Fiscal year: 2004; 
NASA: 119.488; 
Total DOD: 32.064; 
DOE: 27.837; 
Other federal agencies: 40.629. 

Fiscal year: 2005; 
NASA: 167.45; 
Total DOD: 24.692; 
DOE: 32.661; 
Other federal agencies: 26.324. 

Fiscal year: 2006; 
NASA: 105.808; 
Total DOD: 24.066; 
DOE: 22.041; 
Other federal agencies: 33.588. 

Fiscal year: 2007; 
NASA: 110.765; 
Total DOD: 26.882; 
DOE: 26.462; 
Other federal agencies: 33.758. 

Fiscal year: 2008; 
NASA: 131.854; 
Total DOD: 23.996; 
DOE: 16.362; 
Other federal agencies: 35.444. 

Fiscal year: 2009; 
NASA: 107.49; 
Total DOD: 16.639; 
DOE: 16.424; 
Other federal agencies: 35.117. 

Fiscal year: 2010; 
NASA: 97.804; 
Total DOD: 11.374; 
DOE: 24.06; 
Other federal agencies: 39.142. 

Fiscal year: 2011; 
NASA: 81.43; 
Total DOD: 10.024; 
DOE: 25.205; 
Other federal agencies: 50.394. 

Fiscal year: 2012; 
NASA: 57.144; 
Total DOD: 10.407; 
DOE: 24.928; 
Other federal agencies: 68.187. 

Source: BLM. 

[End of figure] 

Three Urgent Issues Facing the Helium Program: 

As we testified in 2010, changes in helium prices, production, and 
demand have generated concerns about the future availability of helium 
for the federal government and other critical purposes. The Helium 
Privatization Act of 1996 does not provide a specific direction for 
the helium program past 2015. As a result of these factors, in 2010, 
we identified three areas of uncertainty about the program's direction 
after 2015. The same three areas are even more urgent today because 3 
years have passed since our 2010 testimony, and BLM's schedule for 
paying off the program's debt has accelerated. Specifically, the three 
urgent issues are as follows: 

* How will the helium program be funded after 2013? If the helium 
program's debt is paid off this year, as expected, and the revolving 
helium fund is terminated, it is not clear how the operations of the 
helium program will be paid for. Currently the helium program does not 
receive any appropriated funds for its operations. The revenues 
generated by the program go into the Helium Fund, and the program has 
access to those funds to pay for its day-to-day operations. It is 
uncertain at this point how the helium program's operations will be 
funded after 2013. BLM is still evaluating possible options, but it 
may have to undertake an orderly shutdown of the helium reserve unless 
the revolving fund is not terminated or appropriated funds are 
available for crude helium sales and the operations of the reserve. 
When we last testified on this issue, the estimated payoff date was 5 
years away in 2015, and it was more closely aligned with the 1996 
act's requirement to sell down the helium reserve by January 1, 2015. 
The debt payoff schedule has accelerated primarily because of improved 
sales of the crude helium offered for sale. As a result, BLM's helium 
program will not have a funding mechanism for its continued operation 
until 2015. Furthermore, because of some years of slow sales, BLM 
estimates that it will need to continue helium sales from the reserve 
until sometime between 2018 and 2020 to reach the 1996 act's 
requirement to draw down to 600 million cubic feet. 

* At what price should BLM sell its crude helium? Since the Helium 
Privatization Act of 1996 was passed, BLM has set the price for 
federal crude helium at the minimum price required by the act. 
However, because federal crude helium reserves provide a major supply 
of crude helium, we expect BLM's prices will continue to affect 
private industry market prices for crude and refined helium. When BLM 
first set its price after the 1996 act, its price was estimated to be 
significantly higher than the market price, but now the reverse is 
true--BLM's price for crude helium is estimated to be at or below the 
market price for refined helium. The 1996 act, like the Helium Act 
Amendments of 1960 before it, tied the price to the program's 
operating expenses and debt. If the debt is paid off in 2013, as 
projected, the debt will no longer be a factor in setting helium 
prices. BLM officials told us that the 1996 act sets a minimum selling 
price and that the Secretary of the Interior has the discretion to set 
a higher price. In response to a recommendation in the National 
Research Council's 2010 report, beginning in fiscal year 2011, BLM 
implemented a new two-tiered pricing system. Under the new pricing 
system, in-kind sales involving federal agencies continued to be based 
on the minimum selling price set in the 1996 act, while other sales to 
nongovernmental entities are charged a higher price based on debt 
repayment and cost recovery factors.[Footnote 16] The new pricing 
system, however, is still not a market-based pricing system. In 
November 2012, Interior's Office of Inspector General recommended that 
BLM implement a new helium pricing process by the end of 2013 to 
ensure a fair return on the sale of helium.[Footnote 17] 

* How should the helium remaining in storage after 2015 be used? The 
Helium Privatization Act of 1996 required BLM to offer for sale 
substantially all of the helium in storage by January 1, 2015. While 
the required amounts have been offered for sale, only 79 percent of 
the amounts offered for sale have actually been sold (see table 2). 
BLM will likely still have significantly more crude helium in storage 
than the 600 million cubic feet required by the 1996 act. As of 
September 30, 2012, there were 11.44 billion cubic feet of 
conservation helium in storage.[Footnote 18] According to the 2010 
report by the National Academies' National Research Council, the 
United States could become a net importer of helium within the next 7 
to 12 years, and the principal new sources of helium will be in the 
Middle East and Russia. Given these circumstances, the National 
Academies' report recommended that Congress may want to reevaluate how 
the domestic crude helium reserve is used or conserved. It is 
uncertain at this point how the helium still remaining in storage 
after January 1, 2015, will be used. 

Table 2: Actual and Projected Crude Helium Sales, Fiscal Years 2003 
through 2013: 

Amounts in millions of cubic feet. 

Actual sales through December 2012: 

Fiscal year: 2003; 
Amount offered for sale: 1,640; 
Amount sold: 1,640; 
Amount not sold: 0; 
Percentage sold: 100%. 

Fiscal year: 2004; 
Amount offered for sale: 2,100; 
Amount sold: 675; 
Amount not sold: 1,425; 
Percentage sold: 32%. 

Fiscal year: 2005; 
Amount offered for sale: 2,100; 
Amount sold: 1,390; 
Amount not sold: 710; 
Percentage sold: 66%. 

Fiscal year: 2006; 
Amount offered for sale: 2,100; 
Amount sold: 1,565; 
Amount not sold: 535; 
Percentage sold: 75%. 

Fiscal year: 2007; 
Amount offered for sale: 2,100; 
Amount sold: 2,030; 
Amount not sold: 70; 
Percentage sold: 97%. 

Fiscal year: 2008; 
Amount offered for sale: 2,100; 
Amount sold: 1,638; 
Amount not sold: 462; 
Percentage sold: 78%. 

Fiscal year: 2009; 
Amount offered for sale: 2,100; 
Amount sold: 925; 
Amount not sold: 1,175; 
Percentage sold: 44%. 

Fiscal year: 2010; 
Amount offered for sale: 2,100; 
Amount sold: 2,100; 
Amount not sold: 0; 
Percentage sold: 100%. 

Fiscal year: 2011; 
Amount offered for sale: 2,100; 
Amount sold: 2,100; 
Amount not sold: 0; 
Percentage sold: 100%. 

Fiscal year: 2012; 
Amount offered for sale: 2,100; 
Amount sold: 2,100; 
Amount not sold: 0; 
Percentage sold: 100%. 

Fiscal year: 2013 (1st quarter of fiscal year); 
Amount offered for sale: 525; 
Amount sold: 525; 
Amount not sold: 0; 
Percentage sold: 100%. 

Subtotal; 
Amount offered for sale: 21,065; 
Amount sold: 16,688; 
Amount not sold: 4,377; 
Percentage sold: 79%. 

Projected sales: 2013 (last three quarters of fiscal year); 
Amount offered for sale: 1,575; 
Amount sold: 1,575; 
Amount not sold: 0; 
Percentage sold: 100%. 

Total; 
Amount offered for sale: 22,640; 
Amount sold: 18,263; 
Amount not sold: 4,377; 
Percentage sold: 81%. 

Source: BLM. 

Note: At the end of fiscal year 2012, there were 11.44 billion cubic 
feet of conservation helium in the reserve. If BLM sells 2.1 billion 
cubic feet per year in fiscal years 2013 and 2014, and 0.525 billion 
cubic feet in the first quarter of fiscal year 2015, the amount 
remaining in storage on January 1, 2015, would be 6.72 billion cubic 
feet. 

[End of table] 

In conclusion, Mr. Chairman, there have been a number of changes in 
the market for helium since Congress passed the Helium Privatization 
Act of 1996. As the deadline for the required actions to be taken 
under this act approaches, Congress may need to address some 
unresolved issues such as how the helium program will operate once the 
Helium Fund expires at the end of this year, how to set the price for 
the helium owned by the federal government, and how to use the 
remaining helium in storage. 

Chairman Hastings, Ranking Member Markey, and Members of the 
Committee, this concludes my prepared statement. I would be pleased to 
answer any questions that you may have at this time. 

GAO Contact and Staff Acknowledgments: 

For further information about this testimony, please contact me at 
(202) 512-3841 or garciadiazd@gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this testimony. In addition, Jeff Malcolm (Assistant 
Director), Carol Bray, Leslie Pollock, and Jeanette Soares made key 
contributions to this testimony. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 86-777, 74 Stat. 918 (1960), codified as amended at 50 
U.S.C. §§ 167-167m. 

[2] "Crude helium" is a gas containing approximately 50 to 85 percent 
helium. 

[3] GAO, Mineral Resources: Federal Helium Purity Should Be 
Maintained, [hyperlink, http://www.gao.gov/products/GAO/RCED-92-44] 
(Washington, D.C.: Nov. 8, 1991); GAO, Mineral Resources: Meeting 
Federal Needs for Helium, [hyperlink, 
http://www.gao.gov/products/GAO/RCED-93-1] (Washington, D.C.: Oct. 30, 
1992); GAO, Mineral Resources: Meeting Federal Needs for Helium, 
[hyperlink, http://www.gao.gov/products/GAO/T-RCED-93-44] (Washington, 
D.C.: May 20, 1993); GAO, Mineral Resources: H.R. 3967 - A Bill to 
Change How Federal Needs For Refined Helium Are Met, [hyperlink, 
http://www.gao.gov/products/GAO/T-RCED-94-183] (Washington, D.C.: Apr. 
19, 1994); and GAO, Terminating Federal Helium Refining, [hyperlink, 
http://www.gao.gov/products/GAO/RCED-95-252R] (Washington, D.C.: Aug. 
28, 1995). 

[4] National Research Council, Selling the Nation's Helium Reserve 
(Washington, D.C.: National Academies Press, 2010). 

[5] GAO, Helium Program: Key Developments Since the Early 1990s and 
Future Considerations, [hyperlink, 
http://www.gao.gov/products/GAO-10-700T] (Washington, D.C.: May 13, 
2010). In addition, hearings were held in the U.S. Senate and the 
House of Representatives on helium in 2012. See, Helium Stewardship: 
Hearing to Receive Testimony on S. 2374, The Helium Stewardship Act of 
2012 Before the Senate Comm. on Energy and Natural Resources, 112th 
Cong. (2012); and Helium: Supply Shortages Impacting our Economy, 
National Defense and Manufacturing Oversight Hearing Before the 
Subcomm. on Energy and Mineral Resources of the House Comm. on Natural 
Resources, 112th Cong. (2012). 

[6] [hyperlink, http://www.gao.gov/products/GAO-10-700T]. 

[7] Helium in this statement refers to helium-4, the most abundant 
naturally occurring helium isotope. Helium-3, which has its own supply 
and demand issues, is not the focus of this statement. For additional 
information on helium-3, see GAO, Technology Assessment: Neutron 
Detectors: Alternatives to Using Helium-3, [hyperlink, 
http://www.gao.gov/products/GAO-11-753] (Washington, D.C.: Sept. 29, 
2011), and GAO, Managing Critical Isotopes: Weaknesses in DOE's 
Management of Helium-3 Delayed the Federal Response to a Critical 
Supply Shortage, [hyperlink, http://www.gao.gov/products/GAO-11-472] 
(Washington, D.C.: May 12, 2011). 

[8] Refined helium has a varying purity of 99.99 percent to 99.9999 
percent helium. 

[9] Pub. L. No. 68-544, 43 Stat. 1110 (1925) (originally codified at 
50 U.S.C. §§ 161-166 and currently codified as amended at 50 U.S.C. §§ 
167-167m). 

[10] The Bureau of Mines was established in 1910 and abolished in 
1996. The helium program was transferred to BLM. 

[11] Pub. L. No. 104-273, 110 Stat. 3315 (1996), codified at 50 U.S.C. 
§§ 167-167m. 

[12] The term "person" means any individual, corporation, partnership, 
firm, association, trust, estate, public or private institution, or 
state or political subdivision thereof. 50 U.S.C. § 167(2). 

[13] National Research Council, The Impact of Selling the Federal 
Helium Reserve (Washington, D.C.: National Academy Press, 2000). 

[14] [hyperlink, http://www.gao.gov/products/GAO/RCED-93-1]. 

[15] 43 C.F.R. Part 3195. 

[16] According to BLM officials, federal agencies must negotiate their 
own purchasing contacts directly with an authorized helium supply 
company. BLM does not track the price negotiated and paid by federal 
agencies. The authorized helium supply companies are required to 
purchase the same amount of helium, by volume, as sold to federal 
agencies. The price that the companies pay to buy the crude helium 
from BLM for these transactions involving federal agency sales is the 
"in-kind" sales price. 

[17] Department of the Interior, Office of Inspector General, Bureau 
of Land Management's Helium Program, C-IN-MOA-0010-2011 (Washington, 
D.C.: Nov. 9, 2012). 

[18] According to BLM, the native natural gas in the reserve contains 
an additional 2.44 billion cubic feet of helium. 

[End of section] 

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