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June 30, 2015

Senators Find Money in … Helium?

(Tom Williams/CQ Roll Call File Photo)

(Tom Williams/CQ Roll Call File Photo)

What can you do with helium other than inflate balloons? If you’re the Senate, apparently you can fund rural schools and the cleanup of old oil wells.

That’s what will happen if members of the Senate Energy and Natural Resources Committee get their way. On Tuesday, that panel agreed to send to the floor a bill overhauling the Federal Helium Program. It included a rather interesting amendment that most people probably didn’t notice, but CQ Roll Call energy expert Lauren Gardner certainly did.

Changing the way helium gets sold scores as a winner, according to the Congressional Budget Office. The Senate version of the bill would save roughly $495 million. That’s real money, which members of the Energy panel, led by Oregon Democrat Ron Wyden and Alaska Republican Lisa Murkowski, decided they could use for other programs important to their states.

That includes Wyden’s Secure Rural Schools program, cleanup of abandoned oil and gas wells in Alaska’s National Petroleum Reserve and other federal sites, and the restoration of some Abandoned Mine Land payments to states, including Republican Sen. John Barrasso’s Wyoming, that were used to help offset the cost of last year’s transportation re-authorization bill.

Idaho Republican Sens. Jim Risch and Michael D. Crapo were among those criticizing the Obama administration for reductions in payments under the schools program, which is designed to compensate communities in states with large holdings of federal lands (that might otherwise generate revenue from private business like the timber industry).

“Once again, the administration is trying to make the sequester as difficult as possible on the American people. The President talks about investing in infrastructure, like roads, education and first responders, yet the cuts they are making directly impact the very things the administration says are a priority,” Risch said in a Monday statement.

The amendment also would fund efforts to ease a backlog of maintenance projects at national parks. In the current budget climate, senators look for money to use as offsets wherever they can, and if Wyden and Murkowski can pull this one off, it could be quite a coup.

Correction: June 19, 2013
An earlier version of the post incorrectly stated that it was the House bill that saved $495 million.

Geof Koss contributed to this report.

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  1. Mas y Mas

    June 19, 2013
    7:14 p.m.

    The Senate’s idea about polling the helium suppliers in a secret manner (to determine market price) is not a terrible idea, but it’s still inherently flawed. Let me explain: Helium suppliers OFTEN times “allocate” or curtail contracted deliveries of helium to their customers in times of shortages. However, during “allocation events”, the price stays the same. Therefore, if you’re looking at only the price on the contract, you’re not capturing the whole picture of scarcity and price equilibrium.

    The Senate needs to figure out a way to weave allocation events into the pricing discovery exercise. Perhaps something simple like: contract price multiplied by 1 + percentage withheld via allocation. Example: contract reads supplier is selling customer 1 million cubic feet of helium per month at $180/Mcf. However, the customer has been allocated by 50 percent and is only receiving 50% of his volume. Then the adjusted, more proper “price” might be $180/Mcf *(1+0.5) = $270/Mcf of helium. That’s a better return for the tax payer AND it captures price and scarcity – not just price.

    To any Senator on the committee, merely ask any of the major industrial gas companies what percentage of their helium contracts (1) have allocation language and (2) how often are allocations used. You will be surprised by the answer (“most if not all”). The inclusion of allocation events into the pricing “formula” (as proposed in this bill) will bring about significantly more revenues into the Treasury and the helium market will resemble something closer to the reality of scarcity and demand.

    Regards to all

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