Chris HopkinsBreaking news: the U.S. House of Representatives, in a broadly bipartisan 391-1 vote, passed the Responsible Helium Administration and Stewardship Act of 2013. Who knew we had a looming helium crisis? But the fact is that the action was necessary to address a growing supply shortage that threatens to affect most every American.
Helium is the second most common element in the universe. And yet it is in short supply, in part, because of government efforts to guarantee its availability. It is a classic study in how well-intentioned intervention can distort markets and produce a result opposite to the intended effect.
In 1919, Congress established a federal program to ensure an adequate supply of the lighter-than-air gas to keep its fleet of military airships aloft. By the late 1950s, dirigibles no longer patrolled the skies, but helium had become an indispensible material for use in welding, as well as in low-temperature physics experiments essential to Cold War weapons research.
From 1925 until 1960, the U.S. government operated the only domestic production facility specifically built to extract helium from natural gas. Then in 1960, Congress created the Federal Helium Reserve, consisting of a network of pipelines connecting 23 federal gas wells, a processing facility to separate the helium, and a massive underground storage facility 3,000 feet below ground inside a porous rock dome near Amarillo, Texas. The storage dome can be thought of as a giant rock sponge that can absorb a huge quantity of helium under pressure, and is the only facility of its kind in the world. The location is also adjacent to gas fields in Texas and Oklahoma that contain high concentrations of helium.
With the end of the Cold War, Congress rightly recognized that helium production should be privatized. The 1996 Helium Privatization Act required the government to sell off its stockpile by 2015 and make way for commercial interests to take over. Good idea, bad implementation.