SELLING THE NATION’S HELIUM RESERVE

Committee on Understanding the Impact of Selling the Helium Reserve

Board on Physics and Astronomy

National Materials Advisory Board

Division on Engineering and Physical Sciences

NATIONAL RESEARCH COUNCIL
OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS

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Committee on Understanding the Impact of Selling the Helium Reserve Board on Physics and Astronomy National Materials Advisory Board Division on Engineering and Physical Sciences

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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by Grant No. NAC080001 between the National Academy of Sciences and the Bureau of Land Management of the U.S. Department of the Interior. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. International Standard Book Number-13: 978-0-309-14979-2 International Standard Book Number-10: 0-309-14979-7 Copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu; and the Board on Physics and Astronomy, National Research Council, 500 Fifth Street, N.W., Washington, DC 20001; Internet, http://www.national-academies. org/bpa. Copyright 2010 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal govern - ment on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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COMMITTEE ON UNDERSTANDING THE IMPACT OF SELLING THE HELIUM RESERVE CHARLES G. GROAT, University of Texas at Austin, Co-Chair ROBERT C. RICHARDSON, Cornell University, Co-Chair ROBERT R. BEEBE, Independent Consultant JOHN R. CAMPBELL, J.R. Campbell & Associates, Inc. MOSES H. CHAN, Pennsylvania State University JANIE M. CHERMAK, University of New Mexico CAROL A. DAHL, Colorado School of Mines THOMAS ELAM, National Aeronautics and Space Administration ALLEN M. GOLDMAN, University of Minnesota NORMAN E. HARTNESS, Independent Consultant W. JOHN LEE, Texas A&M University ALBERT MIGLIORI, National High Magnetic Field Laboratory, Los Alamos National Laboratory DAVID C. MOWERY, University of California at Berkeley MICHAEL PRATS, Michael Prats & Associates, Inc. J. BENJAMIN REINOEHL, RMW Solutions, LLC IGOR SEKACHEV, TRIUMF THOMAS A. SIEWERT, National Institute of Standards and Technology MARK H. THIEMENS, University of California, San Diego Staff DONALD C. SHAPERO, Director, Board on Physics and Astronomy (BPA) GARY FISCHMAN, Director, National Materials Advisory Board (NMAB) (through March 2010) MICHAEL H. MOLONEY, Associate Director, BPA JAMES C. LANCASTER, Program Officer, BPA BETH DOLAN, Financial Associate 

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BOARD ON PHYSICS AND ASTRONOMY MARC A. KASTNER, Massachusetts Institute of Technology, Chair ADAM S. BURROWS, University of Arizona, Vice Chair JOANNA AIZENBERG, Harvard University JAMES E. BRAU, University of Oregon PHILIP H. BUCKSBAUM, Stanford University PATRICK L. COLESTOCK, Los Alamos National Laboratory RONALD C. DAVIDSON, Princeton University ANDREA M. GHEZ, University of California at Los Angeles PETER F. GREEN, University of Michigan LAURA H. GREENE, University of Illinois at Urbana-Champaign MARTHA P. HAYNES, Cornell University JOSEPH HEZIR, EOP Group, Inc. MARK KETCHEN, IBM Thomas J. Watson Research Center ALLAN H. MacDONALD, University of Texas at Austin PIERRE MEYSTRE, University of Arizona HOMER A. NEAL, University of Michigan JOSE N. ONUCHIC, University of California at San Diego LISA J. RANDALL, Harvard University CHARLES V. SHANK, Lawrence Berkeley National Laboratory (retired) MICHAEL S. TURNER, University of Chicago MICHAEL C.F. WIESCHER, University of Notre Dame Staff DONALD C. SHAPERO, Director MICHAEL M. MOLONEY, Associate Director ROBERT L. RIEMER, Senior Program Officer JAMES C. LANCASTER, Program Officer DAVID B. LANG, Associate Program Officer TERI G. THOROWGOOD, Administrative Coordinator CARYN J. KNUTSEN, Research Associate BETH DOLAN, Financial Associate i

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NATIONAL MATERIALS ADVISORY BOARD ROBERT H. LATIFF, R. Latiff Associates, Chair LYLE H. SCHWARTZ, University of Maryland, Vice Chair L. CATHERINE BRINSON, Northwestern University VALERIE M. BROWNING, ValTech Solutions, LLC YET-MING CHIANG, Massachusetts Institute of Technology PAUL CITRON, Medtronic, Inc. (retired) GEORGE T. GRAY III, Los Alamos National Laboratory SOSSINA M. HAILE, California Institute of Technology CAROL A. HANDWERKER, Purdue University DAVID W. JOHNSON, JR., Stevens Institute of Technology THOMAS KING, Oak Ridge National Laboratory PAUL S. PEERCY, University of Wisconsin-Madison MARK A. RATNER, Northwestern University KENNETH H. SANDHAGE, Georgia Institute of Technology ROBERT E. SCHAFRIK, GE Aviation HAYDN N.G. WADLEY, National Institute of Standards and Technology STEVEN WAX, Reston, Virginia Staff DENNIS CHAMOT, Acting Director (as of April 2010) HEATHER LOZOWSKI, Financial Associate ERIK SVEDBERG, Program Officer LAURA TOTH, Senior Program Assistant RICKY WASHINGTON, Administrative Coordinator ii

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Preface In the public’s mind, helium is the gas that fills balloons and the Goodyear blimp. Supply shortages or price structures that result in the loss of either helium- filled balloons or the Goodyear blimp would probably stimulate media coverage of the problem and generate some regret, but their loss would not impact national security or the public welfare. Interestingly, it was lighter-than-air use—to supply airships—that motivated the creation of the Federal Helium Reserve back in 1925. This report deals principally with those lesser-known but essential uses of helium that have evolved, along with the technology, to become of critical importance to the nation’s research, space, medical, and defense programs. It follows the National Research Council (NRC) report released in 20001 that assessed the impacts of the Helium Privatization Act of 1996 by which Congress directed the government to sell essentially all of the helium reserve to compensate it, the government, for its investment in the helium and in the helium’s storage infrastructure. Changes in price and availability since that NRC study have caused concerns about the avail- ability of helium to critical users and raised questions about the previous report’s conclusion that the sale of the helium reserve would not significantly affect helium availability. The NRC convened the Committee on Understanding the Impact of Selling the Helium Reserve to determine whether selling off the U.S. helium reserve in the manner prescribed by law has had any adverse effect on U.S. scientific, techni- 1 NRC, The Impact of Selling the Federal Helium Resere ( Washington, D.C.: National Academy Press, 2000). ix

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Preface x cal, biomedical, and national security users of helium. The Board on Physics and Astronomy (BPA) and the National Materials Advisory Board (NMAB) developed the charge for this study in consultation with the study’s sponsors at the U.S. Department of the Interior’s Bureau of Land Management. The complete charge is reproduced in Appendix A. The full committee met in person four times (see Appendix C) to address its charge. It formed subgroups to study specific areas in further detail and to develop the text of the final report. At its meetings, the committee heard from members of the communities involved in all the aspects of helium handling, from its extraction from underground reservoirs and its various stages of purification to its delivery and use by the end users. The work of the committee between meetings relied upon conference calls and e-mail correspondence. This final report reflects not only the committee’s concerns about how the helium reserve is being managed but also its considered opinion on how it should be managed in the future. The committee that prepared this report is composed of representatives from the many disparate communities that use helium, experts able to address the intri- cate economic issues that arise in assessing the helium markets, as well as represen- tatives from industry (see Appendix B for biographical sketches of the committee members). In the course of its deliberations, members of the committee, scientists and non-scientists alike, were struck by the inordinate impact that increases in helium prices and its periodic scarcity are having on the small-scale science com- munity. Unless structural changes are adopted that would allow members of this community to avail themselves of the existing so-called in-kind program, contin- ued price increases and scarcities may result in these programs losing significant research capability, which in turn may have long-term impacts for the nation from the loss of both research results and the future researchers who would otherwise be receiving training. The committee believes that with clear guidance and mea- sured responses, the helium reserve will be able to support the many critical users of helium in the United States for years to come. As it notes changes in conditions not anticipated in the 2000 Report, the committee advocates the establishment of an ongoing mechanism for monitoring the supply situation and the availability of helium to priority users. As committee co-chairs, we are especially grateful to the committee members for their wisdom, cooperation, and commitment to ensuring the development of a comprehensive report. The capable and energetic support provided by BPA and NMAB staff members Michael Moloney and James Lancaster was essential to completion of the study and this report. Charles G. Groat, Co-Chair Robert C. Richardson, Co-Chair Committee on Understanding the Impact of Selling the Helium Reserve

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Acknowledgment of Reviewers This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsive- ness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: Gordon Baym, University of Illinois at Urbana-Champaign John Curtis, Colorado School of Mines Robert Dynes, University of California at San Diego Donald Gessaman, EOP Group, Inc. William Halperin, Northwestern University Charles Howe, University of Colorado Carl Johnson, Pipeline and Hazardous Materials Safety Administration (retired) Robert Kephart, Fermilab Jane Long, Lawrence Livermore National Laboratory Chris Sims, Princeton University G.J. Wasserburg, California Institute of Technology xi

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acknowledgment reviewers xii of Although the reviewers listed above have provided many constructive com- ments and suggestions, they were not asked to endorse the conclusions or recom- mendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Julia Phillips, Sandia National Laboratories. Appointed by the National Research Council, she was responsible for making certain that an independent examination of this report was carried out in accor- dance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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Contents EXECUTIVE SUMMARY 1 SUMMARY 5 1 OVERVIEW, CONCLUSIONS, AND RECOMMENDATIONS 14 Introduction, 15 Demand for Helium, 16 Applications, 16 Consumption, 18 Supply of Helium, 19 Sources, 19 Recovery of Helium, 19 Helium Supply Chain, 20 Market Issues, 21 Federal Helium Reserve, 23 The 1996 Helium Privatization Act, 24 NRC 2000 Report, 25 Post-2000 Developments in the Helium Market, 26 Review of the 2000 Report’s Conclusions, 28 xiii

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contents xi Conclusions and Recommendations for the Federal Helium Program, 31 New Policy for the Sale of Federal Helium, 31 Providing Helium for Small-Scale Science Research Communities, 34 Management of the Federal Helium Reserve, 38 Collection of Information, 39 Longer-Term Needs, 40 Concluding Remarks, 42 2 THE HELIUM SUPPLY CHAIN 45 Introduction, 45 Raw Helium Supplies, 45 Helium Production, 47 Refined Helium Supply Chain, 49 Primary Distribution of Liquid Helium, 49 Secondary Distribution of Helium, 51 3 DEMAND FOR HELIUM 54 Introduction, 54 Overview of U.S., Foreign, and Worldwide Demand to 2008, 54 Estimate of Demand to 2020, 55 Economic Considerations, 57 Helium Applications in the United States, 58 Cryogenic Uses, 58 Pressurizing/Purging, 64 Welding, 65 Controlled Atmospheres, 66 Chromatography, Lifting Gas, Heat Transfer, 67 Leak Detection, 69 Breathing Mixtures, 70 4 HELIUM SOURCING AND RESERVES 71 Introduction, 71 Current and Projected Sources of Helium, 71 Overview, 72 United States, 73 International, 76 Refined Helium: Current Capacity and Production, 76 United States, 77 Non-U.S. Helium Supply, 80 Future Helium Capacity and Supply Versus Helium Demand, 81 An Alternative Role for the Federal Helium Reserve, 85

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contents x 5 OPERATION OF THE FEDERAL HELIUM RESERVE FACILITIES 87 Introduction and History, 87 Facilities, 87 The 1996 Privatization Act, 89 Post-1996 Activities by BLM, 90 BLM’s Operation of the Helium Reserve, 91 BLM Sales of Crude Helium, 92 Efficiency and Conservation Benefits of the Flywheel, 98 BLM Management of the Bush Dome Reservoir, 101 Committee’s Supplemental Recommendations, 110 Straight-Line Extraction Mandate for Bush Dome Crude Helium, 111 BLM Management of the Bush Dome Reservoir After 2015, 112 REFERENCES 113 APPENDIXES A Statement of Task 117 B Biographies of Committee Members 118 C Meeting Agendas 124 D The Economics of a Typical Recycling System 128 E Auction Types 130 F Extraction Path Alternatives 132 G Executive Summary of The Impact of Selling the Federal Helium Resere (the 2000 Report) 136

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