The President's action followed agreement on the bill from both chambers of Congress on September 26, after several votes by the House and Senate that demonstrated strong bipartisan support to avoid disruption of the helium market.

Congress and the President recognized the critical nature of maintaining a stable supply of helium for a wide range of industries across America including manufacturing of semiconductors, MRI machines, research, fiber optic cable, plasma televisions and balloons.

Earlier this year, the House passed H.R. 527, "The Responsible Helium Administration and Stewardship Act," which would authorize operation of the Federal Helium Reserve beyond the 2013 sunset mandated under current law and transition federal helium sales to an auction mechanism.

The Senate made amendments to the House bill H.R. 527, which had passed the House by a vote of 394 to 1.

The House now must pass the Senate’s amended version to send the bill to the president to avert a shutdown.

Earlier this year, the House passed H.R. 527, "The Responsible Helium Administration and Stewardship Act," which would authorize operation of the Federal Helium Reserve beyond the 2013 sunset mandated under current law and transition federal helium sales to an auction mechanism.

During development of the House bill, there was bipartisan interest from leadership on the House Natural Resources Committee in exploring ways of developing new sources of helium to ensure an adequate supply for the longer term.

Tomorrow's hearing begins to explore one aspect of that issue, which is production of helium on federal lands to the extent it is a by-product of natural gas exploration.

The Senate has introduced and held a hearing on its own version of a bill to extend operation of the Federal Helium Reserve, S. 783, "the Helium Stewardship Act of 2013." Senate leadership has yet to schedule a date for further action on the bill.

We will continue to keep you updated on this important issue as new actions occur.

The legislation, which was sponsored by Chairman Sen. Ron Wyden (D-OR) and co-sponsored by Ranking Member Sen. Lisa Murkowski (R-AK), is being considered in committee less than two weeks after the House passed H.R. 527, bipartisan legislation to continue operation of the Federal Helium Reserve beyond the sunset mandated under current law.

Both Sens. Wyden and Murkowski acknowledged the importance of taking action to ensure that the reserve continues to operate beyond its currently mandated sunset this year. During their introduction of the bill, they emphasized the many important uses of helium and mentioned the necessity for a stable helium market.

S. 783 and H.R. 527 have many similarities and a few differences. Both bills allow the Federal Helium Reserve to continue operating, with drawdown of the remaining helium in the reserve occurring in three phrases. Both bills stipulate that the Reserve will operate under present conditions through the first phase, about one year. Both also stipulate that the third phase would keep the Federal Helium Reserve for federal medical and scientific uses only.

The Senate and House bills differ in their implementation of the second phase. Both bills introduce an auction mechanism for the sale of helium. However, the Senate bill would allow the majority of helium to be sold as under the current system while gradually increasing the amount of helium sold via auction until the reserve reaches 3 billion cubic feet of helium, while the House bill would apply the auction mechanism for all sales of helium until the 3 billion cubic feet level is reached.

We will distribute an update following the hearing with further details about what was discussed. Please stay tuned for more information on this important issue.

During consideration of the legislation by the House, Rep. Erik Paulsen (R-MN-3) singled out balloon manufacturing as one of the industries at stake in the debate over the helium supply.

H.R. 527 was passed after the adoption of three amendments. One amendment affirms that private-sector refiners can hook up to the Federal Helium Reserve. Another stipulates that any revenue from helium sales will go into deficit reduction. The third amendment will assess and encourage development of future sources of helium. When this amendment was proposed, the Chairman of the House Natural Resources Committee welcomed the change and indicated that the Committee will work beyond this legislation on ensuring a stable supply of helium by developing new sources.

The Balloon Council is pleased that the House of Representatives recognized the importance of this issue, in a bipartisan fashion, and with sufficient time for Congress to address this important matter before October 2013 when authority for the Federal Helium Reserve would otherwise sunset under current law.

Attention now turns to the Senate, where Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore., and Ranking Member Lisa Murkowski, R-Alaska, released draft legislation earlier this year.

We will continue to keep you updated on this important issue as new actions occur.

The committee emphasized its bipartisan cooperation at every step of the process in developing, negotiating and approving the bill. The committee's emphasis and overarching objectives have been to secure legislation that would ensure no interruption in access to the Federal Helium Reserve and maintain stability in the helium marketplace, while shifting to an auction-based system for the sale of crude helium.

Among the changes to the amended bill include additional provisions on reporting related to tolling agreements. These changes add additional reporting and transparency to the system not in effect today and are intended to increase access to helium for users who do not have their own refining capacity.

More background about the bill and committee action is available through this press release from the House Natural Resources Committee.

The Senate is also working towards an extension of the Federal Helium Reserve. The Energy and Natural Resources Committee Chairman Sen. Ron Wyden (D-OR) and Ranking Member Lisa Murkowski (R-AK) released a discussion draft of legislation, the Helium Stewardship Act of 2013, and expect to introduce the bill in this spring.

Please contact Lorna O'Hara at The Balloon Council, 800-233-8887, if you would like to discuss this issue in more detail. Please stay tuned for our next member update on this important issue.

This update provides information to balloon wholesalers, distributors and retailers about the latest activity in Washington related to the Federal Helium Reserve.

Legislation Introduced in House

Rep. Doc Hastings (WA-4-R), chair of the House Natural Resources Committee, introduced H.R. 527, "The Responsible Helium Administration and Stewardship Act."

The new bill provides for the continued operation of the Federal Helium Reserve beyond the sunset mandated under current law, breaking up the transition to privatization into three phases. This will bring market stability and ensure continuous access of helium to both industrial and commercial users.

The first phase would allow the reserve to operate under present conditions until one year after that Act's passage, even if the debt is repaid sooner.

The second phase would allow for sale of crude helium for federal, medical, scientific, and commercial uses until enough helium is drawn down to leave 3 billion standard cubic feet in the reserve. This sale would occur at auction, with prices starting at close to market levels, and with a majority of the helium going to entities with either adequate refining capacity or tolling agreements for refining in place.

The third phase would keep the Federal Helium Reserve for only federal, medical, and scientific uses.

This bill would require greater transparency of the helium pipelines managed by the Bureau of Land Management by requiring an establishment of a reporting process for data that affects the helium industry. The Bureau of Land Management would have to report on maintenance schedules, planned shutdowns, and anticipated impacts on helium supply.

Congressional Hearing on Valentine's Day

The House Natural Resources Committee held a congressional hearing on February 14th titled "The Past, Present and Future of the Federal Helium Program." The fact that the hearing was held on Valentine's Day was not lost on the panel as they recognized the holiday's connection to the balloon industry.

The hearing evaluated issues related to the Federal Helium Reserve and the importance of keeping the helium supply stable. Panelists touched on H.R. 527 and the advantages of keeping the helium reserve in federal hands past the sunset directed by current law.

Panelists at the hearing included federal officials and representatives of several industries that are affected by the helium market. Together, they represented the industrial, medical, defense, and commercial interests in the helium market, government officials, as well as helium producers and refiners.

The panelists' testimonies illustrated the intricacies of our country's helium production, the variety of different users that rely on a stable helium supply, the federal oversight involved, and widespread agreement that the helium market will be unstable unless congressional action is taken before federal oversight of the helium reserve expires.

Gary Page from Helium & Balloons Across America testified, discussing his company's experience trying to gain access to the helium production process to refine its own helium and emphasizing the impact that balloon retailers, distributors and wholesalers have on our national economy.

Next steps for The Balloon Council

The Balloon Council is working with Congress to make sure the balloon industry's interests are considered in discussions about the helium reserve and that there is a stable supply of helium for the industry.

The House is expected to take action on H.R. 527 by the end of March and we anticipate that the Senate will introduce its own bill in the near future. At this point, it is unclear whether a Senate bill will mirror the House legislation or will include a solution of its own.

The Balloon Council believes that it is critical for Congress to continue its discussions and that the Federal Helium Reserve continue beyond its sunset under the current law in order to stabilize the helium market.

While there are points of the legislation that can be improved, we are pleased that Rep. Hastings and the Committee are focusing on this issue so early in the year and that they scheduled a hearing on Valentine's Day, the largest retail balloon sales day of the year. We also commend Congress for making sure to include the perspective of someone in the balloon industry during the hearing.

It is critical that more members of Congress understand the need to take quick action to extend operation of the Reserve and that they understand the economic impact of the balloon industry. We encourage you to contact your senators and congressperson. Tell them about the importance of extending operation of the Reserve to your business.

The Balloon Council can assist you in developing an appropriate correspondence and where to direct your letters. Please contact Lorna O'Hara at The Balloon Council, 800-233-8887, for additional direction. Please stay tuned for our next member update on this important issue.

Significant New Sources of Helium Are Still On Schedule for 2013

Several new helium plants are scheduled to open in 2013, both in the U.S. and overseas. Opening these plants will address both domestic and international demand on the current U.S. helium supply. Global helium demand is currently 6.3 billion cubic feet of helium per year, and these sources will provide almost 2 billion cubic feet of helium annually at full production.

• The Air Products/Matheson plant in Big Piney, WY, is on schedule to begin production in the first quarter of 2013. It will provide 200 million cubic feet of helium per year.
• The Skikda, Algeria, helium plant is on schedule to increase to 600 million cubic feet of helium per year beginning in the first quarter of 2013.
• Qatar is opening a second helium plant in the second quarter of 2013 that will provide 1.3 billion cubic feet of helium per year.

American helium suppliers currently sell some of their product to markets in Asia. The opening of new overseas plants will alleviate some of the helium demand from Asian nations and allow the American suppliers to sell more of their helium domestically.

The operational goal for these new sources will be to ramp up production throughout the year, and we anticipate significant production increases by late 2013.

Temporary Issues at the BLM Pipeline Appear to be Improving

The Bureau of Land Management's helium pipeline in Amarillo, which normally distributes six million cubic feet of helium daily, experienced a reduction in output for almost two weeks in the middle of November. Because of a decrease in pressure, the pipeline was only distributing 5.5 million cubic feet per day. The BLM reduced production to allow the pressure to increase. Production has steadily risen and is close to normal output at this time. This unexpected issue caused a delay in some of the supply improvement that was anticipated by now.

Gazprom Pipeline - Second Stage Moving Forward

Russia's Gazprom pipeline will start the second stage of its development, establishing a large gas production center in Russia, according to a recent announcement. This pipeline will create new helium production capabilities when fully operational in late 2017. The pipeline will export gas to China, further alleviating the global helium demand and allowing U.S. providers to sell gas domestically.

Helium Legislation Update

Congress is currently in its lame duck session before the new Congress takes over in January. The primary focus during this session is avoiding the so-called "fiscal cliff" of automatic tax hikes and other items that are set to take effect if action is not taken.

While the fiscal cliff gets most of the media's attention, there are many other pending issues that could be addressed before the term ends. All bills disappear at the end of the session, so there is often a lot of action at the end of the term to move items through so that the new Congress does not need to start from scratch. Legislation related to the Federal Helium Reserve fits in this category.

The Helium Stewardship Act has bipartisan support with an equal number of Republican and Democratic co-sponsors. Departing Sen. Bingaman, Chairman of the Senate Committee on Energy and Natural Resources, could make the legislation a priority because this will be the last opportunity he has to address the issue. If the bill is to move, it would likely be part of a package of energy bills qualified with unanimous consent because of the strong bipartisan support.

To date, the House of Representatives has not introduced a companion bill.

The Balloon Council maintains that congressional action is needed to address current law related to the Federal Helium Reserve in order to ensure the continued operation of the Reserve to provide for industries that require helium and to avoid major market disruptions.

Tell your U.S. senators and representative in the House how your business is impacted by this important issue, and urge them to take action to ensure continued operation of the Federal Helium Reserve. The Balloon Council can assist you with messaging for your correspondence to your representatives in Congress. Please contact Lorna O'Hara at The Balloon Council, 800-233-8887.

The Balloon Council held a webinar from the authors of the study and our policy partners in Washington to give details about the study and pending legislation.

Click the links below to view the webinar presentation. You can also download the presentation to your computer and use it at a later date.

• Click here to view the Flash-enabled webinar (IE, Firefox, Chrome)
• Click here to view the non-Flash webinar (mobile devices such as iPad, iPhone)
• Click here to download the PowerPoint

The report included several highlights, including:

• The world is not running out of helium: at present use levels, estimated reserves would support 300 years usage at today's rate.
• The present shortage situation is the result of several "perfect storm" events happening at once.
• Helium supplies will improve in 2013.
• While availability will increase in the future, prices are not expected to return to previous levels, but increased supplies could exert pressure for lower prices.
• Congressional action is essential to sustain access to the Bureau of Land Management helium reserve.

There is federal legislation pending which would ensure that access to the federal supply of helium is sustained. The Helium Stewardship Act of 2012 will allow for continued operation of the federal helium reserve to address the issue of continued access to the reserve beyond the scheduled sunset date mandated under previous legislation.

Legislation has been introduced in the U.S. Senate to address the future of the helium supply. The Balloon Council is reviewing the legislation and is setting up meetings in Washington with representatives on Capitol Hill to make sure the commercial balloon industry and its significant economic impact is recognized in whatever legislation moves forward.

This update to stakeholders is intended to provide background about the legislation and other congressional activities affecting the helium supply.

At this point in time, there is not a specific action that we recommend you take other than staying informed about the issue through our updates. As The Balloon Council proceeds with its legislative outreach and if the legislation advances, we will continue to advise you and coordinate calls-to-action to Congress as appropriate to ensure that our voices are heard.

Legislation Background

Introduced by Sen. Jeff Bingaman (D-NM), Chairman of the Senate Committee on Energy and Natural Resources, S. 2374, the Helium Stewardship Act of 2012, would provide for the continued operation of the Federal Helium Reserve beyond the 2015 sunset mandated under current law, delineate how the reserve can be drawn down during a transition to dependence on the private market for helium, and provide for maintenance of a reserve that would continue to exist for federal scientific uses for the future.

The bill stipulates that during the transition period, the reserve helium would be sold to the same types of customers that buy it now - industrial, medical, scientific, and commercial. After the reserve is transitioned to the private market, a federal reserve will still be maintained and regulated by the Secretary of the Interior for federal uses.

S. 2374 stipulates that those federal uses include medical and scientific only; it does not include commercial or industrial customers.

A more detailed analysis of S. 2374 is available to view.

Recent Activities

On July 20th, the House Natural Resources Subcommittee on Energy and Mineral Resources Oversight held a hearing titled, "Helium: Supply Shortages Impacting our Economy, National Defense and Manufacturing." The hearing evaluated the issues related to the future of the Federal Helium Reserve and the importance of continued access to a stable supply of helium, touching on issues raised in the Senate legislation, including the merits of a strategic reserve for helium that would persist into the future.

Through The Balloon Council's advocacy and outreach, we were able to educate committee members about the helium shortage's adverse economic impact on commercial users of helium, and specifically on the importance of a reliable source of helium to the future of the balloon industry.

The Ranking Member of the House Subcommittee, Rep. Rush Holt (D-NJ), mentioned the balloon industry in his opening statement among the sectors of the economy affected by helium supply and price issues. Further, one of the witnesses with decades of experience in the helium industry, John R. Campbell, former member of the National Research Council's Committee on Understanding the Impact of Selling the Helium Reserve, referred to the billion dollar balloon industry in his written and oral testimony.

There was consensus among Members of the Subcommittee and witnesses that action needs to be taken related to the helium reserve that would allow for the Federal Helium Reserve to operate beyond the sunset of the Helium Privatization Act, although the specifics remain subject to additional discussions, particularly on pricing mechanisms for future sales of helium.

Upcoming Events

Balloon Council representatives will be in Washington, DC, to meet with congressional representatives about this issue in July to reinforce The Balloon Council's views on the importance of sustaining the Federal Helium Reserve and to educate policymakers about the helium shortage and its impact on our industry. The Balloon Council wants to make sure there is consideration of the economic impact of all industries that rely on helium as the federal government creates its policy on the Federal Helium Reserve going forward. Commercial and industrial helium users provide a significant positive impact to jobs and the economy, accounting for hundreds of millions of dollars in economic activity each year.

If you would like to discuss this issue in more detail, please contact Lorna O'Hara at The Balloon Council, 800-233-8887, and please stay tuned for our next member update on this important issue.