CGA Urges Delay in Sale of Federal Helium Reserve to Prevent Supply Chain Crisis
January 18, 2024
For Immediate Release
Compressed Gas Association Urges Delay in Sale of Federal Helium Reserve to Prevent Supply Chain Crisis
[WASHINGTON, DC] – The Compressed Gas Association (CGA), representing a coalition of industries reliant on helium, urgently calls for the delay in the sale of the Federal Helium Reserve System (FHR). The FHR is located in Texas, Oklahoma and Kansas and provides 20% of US helium supply.
Issues with the impending sale, if not adequately addressed, could lead to severe disruptions in the US helium supply chain, impacting vital sectors such as healthcare, semiconductor manufacturing, defense, aerospace, and research. The imminent risk to the helium supply chain posed by the General Services Administration (GSA) sale of the FHR comes at the same time as the $52 billion in CHIPS Act funding to build new semiconductor fabrication units starts to flow. According to a December 21, 2023 report by the Department of Commerce, the GSA sale of the FHR was cited by semiconductor stakeholders as a supply chain risk for increased semiconductor production, as helium is a necessary component in the manufacturing process.
The U.S. is the world’s largest producer of helium, followed by Qatar. Gazprom, Russia’s largest natural gas company, recently began supplying helium from its Amur plant, and intends to have six process trains running by 2025, significantly raising Russia’s share of the global market for helium.
“Helium is a critical part of the supply chain for products essential to economic growth”, said Rich Gottwald, CGA’s President and CEO. “From computer chips to medical imaging to the energy sector, helium is vital. This poorly structured and ill-timed sale would make life-saving MRI’s less accessible, the chips that connect everything from computers to cars to airplanes less available and would have an immediate impact on America’s national security.”
“Any disruption in the supply chain would cause U.S. dependence on a country in the Mideast, a region in the midst of both war and attacks on shipping” Gottwald added.
The CGA’s call to delay the sale points to critical deficiencies and risks that must be addressed prior to the sale in order to prevent a supply chain crisis.
Key concerns include:
- Critical Infrastructure Dependencies: The Federal Helium Reserve System relies on the Crude Helium Enrichment Unit (CHEU), an integral component for helium extraction and enrichment. The separate ownership and potential non-transferability of the CHEU agreement pose significant operational challenges for the new owner.
- Regulatory Compliance: The sale introduces regulatory complexities as the FHR pipeline spans multiple states, subjecting a private purchaser to state-specific laws and regulations. Compliance with these varied requirements poses potential delays and uncertainties.
- Operational Delays and Risks: Historical data from the BLM’s transfer of operation and maintenance in April 2022 indicates that transitioning to a private owner can result in months of delays caused by the need to identify and correct operational issues, put systems in place to comply with regulatory requirements and complete permits, impeding the facility’s ability to supply helium promptly.
Helium is a finite resource crucial to various industries, including those manufacturing semiconductors, a key component for the CHIPS Program Office’s recent awards aimed at boosting onshore semiconductor capabilities. The impending sale, if not delayed and executed responsibly, could jeopardize the helium supply chain, hindering growth and undermining national and economic security priorities.
Critical impacted industries include:
Medical Field:
- Helium is crucial in diagnostic equipment such as MRI machines and helium-neon lasers are employed in eye surgery.
National Defense:
- Used in rocket engine testing, scientific balloons, surveillance craft, border patrol monitoring technology, and air-to-air missile guidance systems.
Nuclear Energy:
- Due to its non-radioactive nature, helium serves as a cooling medium for nuclear reactors.
Space Exploration:
- NASA utilizes helium to maintain separation between hot gases and ultra-cold liquid fuel during rocket lift-offs.
Search and Rescue/Medical Equipment:
- Employed to cool thermographic cameras and equipment for search and rescue teams.
- Used in gas leak detection for products like aerosols, tires, refrigerators, fire extinguishers, and air conditioners.
Industrial Applications:
- Used in arc welding to create an inert gas shield.
- Mixed with oxygen for safe breathing in pressurized environments.
“The CGA urges the White House to intervene immediately, delaying the sale until all deficiencies are thoroughly addressed. A poorly executed sale will lead to a helium supply chain crisis, impacting American competitiveness, economic growth, and national security,” implores Gottwald.
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For further information, please contact:
Paul Pflieger
Director of Marketing, Communications, and Events
ppflieger@cganet.com
(202) 494-2220
About the Compressed Gas Association (CGA)
CGA was founded in 1913 and is an ANSI-accredited standards developing organization that is dedicated to the development and promotion of safety standards and safe practices in the industrial, medical, and food gases industry. CGA’s membership is comprised of more than 160 companies globally, covering all facets of the industry: manufacturers, distributors, suppliers, and transporters of gases, cryogenic liquids, and related products. Our customers can be found in the electronics, industrial, medical, food, telecommunications, computing, and energy sectors. For more than 110 years, CGA has been dedicated to the development and promotion of safety standards and safe practices within the industry and to assuring the American public quality assured products, such as commercial grade helium.
