“With regard to the world’s largest production facility and reserve system of crude helium managed by BLM (Bureau of Land Management), the deliberation in the US Congress on “Helium Stewardship Act (Asset Management)” to succeed the current Helium Privatization Act is in the final stage now.

Helium Privatization Act of 1996 decided to sell out the crude helium reserved and managed by BLM namely the US Federal Government with its plants located in Amarillo, Texas excluding some portion and then to put an end to BLM’s management of the Reserve. The Act fixed the date to discontinue the management to be October 7 of this year. Unless a new bill to take over the act be accepted by September 30, BLM must close the reserve system and pipeline under the current law.

The gasworld of our partner in the UK compared the present situation to “Helium Cliff” instead of “Financial Cliff.” We cannot　keep our eyes off the development until the beginning of October as to how the US Congress responds to BLM’s on-the-cliff state to supply crude helium.

The House of Representatives has already approved the bill but…

As reported in our previous issue, the Senate submitted a bill named “Helium Stewardship Act (HAS),” while the House of Representatives sent a different bill under the title of “Responsible Helium Administration and Stewardship Act (RHASA.)”

The contents of both bills are quite alike, with themes including BLM’s sales of helium, continuance of storage management, optimized pricing of crude gas based on market values, stable supply and the development of private sources. For future storing arrangements RHASA included a management act that when the helium reserve reaches 3 billion f3 (approximately 85 million m3), allowable sales will be confined to the only applications related to Federal requirements.

RHASA out of them was already accepted by the House of Representatives in April. At present (as of September 6) they are waiting for Senate’s discussion on the HSA bill. The Federal Congress is now taking summer holidays and will restart discussion from September 9.

In case that the HSA is passed in the Senate by September 30, it is expected there will be no discontinuation in the supply of crude helium from BLM. However, as the US Congress has to discuss the other important bills, it is quite unpredictable whether the HSA bill will be accepted in time.

BLM is silently preparing to shut down the Reserve management

Under these circumstances it has been made clear by Praxair that BLM is proceeding with preparations to shut down the Reserve under the current laws.

According to Praxair’s press release, BLM informed the related companies that it will enter into the process to shut down the Reserve toward the end of September. To that end, therefore, Praxair asked the Federal Congress to continue the operation until the end of 2014 appealing importance of the Reserve and response to the public interests.

Praxair commented, “Although gas suppliers being represented by some senators and congressmen submitted a draft of new Act, no prediction of passing of the bill by end September has been found possible. Therefore, BLM seems to have informed the unconditional shutdown of the Reserve.” Praxair also pointed out that BLM is a significant player in the global production of helium accounting for about 30% share, and its management of the Reserve is indispensable to stabilize the supply of helium over the world.

In addition, the release unveiled that Praxair has so far invested $500 million (approx. 50 billion) for the stable supply of helium from the BLM source and concluded agreement with BLM to take delivery of the stocked helium from the Reserve until the end of 2015.

General newspapers in the US also took up the issue of “Helium Cliff.” The Wall Street Journal on August 18 wrote an article named “The Helium Reserve faces a shutdown. BLM may get started for a shutdown process of the Reserve possibly as early as on September 15.”

When it comes to the 15th of September, it will be just a week after returning of the Congressmen from their summer holidays. Not so much time will be left to prevent shortage of helium.

Regarding the reason that the Senate has not passed the bill, they point out that at least one senator had disturbed the discussion before the summer holiday season. They have a favorable viewpoint about Senator’s bill proposing to maintain the status quo of BLM’s Reserve until the end of 2014 and then continue sales by tenders until 2023 remaining only 3 billion f3 in the Reserve, because it is expected to bring a revenue of about $51 million (5.1 billion), contributing to reduction of the financial deficit.

Riley Ridge eventually shows a whiff of full-scale operation

With reference to the domestic situation of procurement and supply of helium, the import of helium for the first half of this year decreased by 15.2% compared to last year.

Some sources are enforcing their allocation, while some suppliers began to halve their delivery of liquid helium for MRI after August of this summer.

This movement seems to have been affected by BLM’s implementation of the four-day turnaround from July 29, the subsequent pressure drop of pipeline and the reduced operation rate in the Algeria plant.

Exxon-Mobil for which Matheson and Air Liquide have take-or-pay rights plans on a turnaround from September 6 to 26, and no Exxon lot will be shipped into our country until the end of October.

Taiyo Nippon Sanso and Air Liquide Japan deliberately implemented priority supply of liquid helium to their major users within August as their countermeasure. They are taking appropriate measures for stable supply.

Regarding the trend of the US Federal Congress concerning the treatment of BLM, some voluntary helium suppliers are getting fresh information of the local situation directly through the METI. Any important information as a rule is kept commonly among the member companies through the Helium Committee of JIMGA.

Furthermore, following Helium of Qatar, Cimarex’s natural gas plant in Riley Ridge, Wyoming will be put into operation in October of this year. There also is a sign of movement to start operation at the helium liquefying plant (for an annual output of 5.6 million m3) in which Matheson and Air Products own interest on a fifty-fifty basis.

Our reporter contacted Taiyo Nippon Sanso about this matter, but they did not want to clarify the planned time of operation as the plant has so far made some postponements. However, they showed an idea as a wishful thinking that operation might start by the end of the year from the local information that utilities were provided for the natural gas plant in August (as commented by Products Planning and Control Department).”