GE, Siemens plead with lawmakers to preserve federal helium reserve

Helium, the gas behind party favors and high-pitched voices, has become serious business for K Street.

Lobbyists for computer-chip manufacturers, medical device makers and the balloon industry are pleading with Congress to continue helium sales from a federal reserve. They say the extension is critical for scientific research and industrial production at a time when helium is in scarce supply.

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If the reserve were to shut down, as expected in late 2013, about 30 percent of the world’s helium supply would go offline — causing further supply disruptions and higher prices.

That’s a deflating prospect for corporate giants like General Electric (GE), Intel, Siemens and Texas Instruments that depend on helium to produce and run their products.

“I don't think many members of Congress know much about helium beyond party balloons. We are educating members that this is an important issue for the semi-conductor industry as well as other industries and the scientific community,” said David Isaacs, vice president of government affairs for the Semiconductor Industry Association. “This is something that can and must get done urgently.”

So urgent, in fact, that deadline for extending helium sales has earned the dreaded “cliff” moniker.

Unless Congress acts, "America will float off a helium cliff. Pun intended,” said Rep. Doc Hastings (R-Wash.), chairman of the House Natural Resources Committee at a hearing on Thursday that was devoted do the issue.

At stake is half of the United States’ helium supply, held in the Federal Helium Reserve. The reserve was created in 1926 to help with the country’s national security needs, but by the 1990s, federal demand was so low that the reserve was more than $1 billion in debt.

In 1996, lawmakers passed a law to sell and privatize the reserve’s helium in order to pay down that debt. Once it’s paid off, which is expected later this year, the reserve has to stop helium sales under the law.

“A big chunk of the world's supply would not be available. … We need the reserve open for at least a few more years,” said Steve Harper, Intel’s global director of environment and energy policy.

Intel and other information technology companies use helium to help make their computer chips. Mo Mahmoud, a Texas Instruments spokesman, said helium is “a critical gas” for the delicate manufacturing process that is used.

The gas is also vital for magnetic resonance imaging (MRI) scanners — a medical test that helps visualize a patient’s internal organs for doctors. Helium helps cool those machines.

“These MRIs need to be cooled. The last thing you need to happen is for your hospital customer to run out of helium and they have to shut their MRI down,” said Eleanor Kerr, a director of government affairs who works on healthcare policy for Siemens.

Like Siemens, GE is lobbying to keep the helium reserve’s sales going. The company’s largest use for helium is in the manufacturing and servicing of its MRI scanners, according to Orrin Marcella, manager of government affairs for GE Healthcare.

Jobs are at stake as well. Noah Lichtman, a spokesman for the Balloon Council, said retailers lost business this Valentine’s Day due to helium shortages.

“The severe economic loss felt this year to the 100,000 Americans who work in the balloon industry would be repeated to a greater extreme in the absence of congressional action to continue the federal government’s operation of the reserve to ensure stability and predictability in the helium market,” Lichtman said.

Other groups concerned about the reserve are bulking up their lobbying representation.

Helium & Balloons Across America, a helium balloon retailer, hired the Alpine Group last month to lobby on “issues affecting domestic helium supply and pricing,” according to its lobbying registration. Gary Page, president of the balloon company, also testified at the House hearing on Thursday.

Further, Praxair, Inc., an industrial gas company, signed up DS2 Group in January to lobby on helium legislation.

Hastings, along with Reps. Ed Markey (D-MA), Bill Flores (R-TX) and Rush Holt (D-NJ), has introduced legislation to keep the reserve open. Called the Responsible Helium Administration and Stewardship Act, the bill would keep the reserve operating for another year, set up an auction process for its helium and reform its pricing of the gas.

Spencer Pederson, a spokesman for the House Natural Resources Committee, said Hastings plans to do a markup on the bill in the near future.

The Senate is also preparing to take action.

Megan Moskowitz, a spokeswoman for the Senate Energy and Natural Resources Committee's minority, said the panel would likely hold hearings on the helium reserve, though nothing has been planned so far.

“Sens. [Lisa] Murkowski [(R-Alaska)] and [Ron] Wyden [(D-Ore.)] are working on a bill to address the federal helium reserve,” Moskowitz said. “The bill has not been finalized yet, but they do realize the urgency.”

Wyden, who is the committee’s chairman, and Murkowski, the panel’s ranking member, also wrote a letter last month to Interior Secretary Ken Salazar asking when the helium reserve would stop its sales under current law.

In the meantime, industries dependent on helium are conserving and recycling the gas while searching for alternatives.

“It is important for everyone's purposes to think of helium as a critical economic and national security issue and to get together to figure out how to increase long-term supply and find substitutes,” said Harper with Intel. “There's work to be done on the supply side and the demand side.”

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