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The Impact of Selling the Federal Helium Reserve
from natural gas, then into a provision for storage to deal with the expected periodic imbalances in supply and demand, and finally into a situation that threatened the viability of the entire industry.
Private consumption of helium began to recover from this low point in the 1970s, and private production was again healthy by the mid-1980s, although BOM was still producing. By 1988, the Office of Management and Budget proposed that all helium production belonged in the private sector. This proposal was opposed by the Congress, however. In 1992, the administration suggested a compromise under which BOM's facilities would not be sold but government agencies would be free to buy helium from the private sector.
In the meantime, two major changes occurred. First, Congress eliminated BOM in 1997 and transferred responsibility for the Federal Helium Reserve to the Bureau of Land Management (BLM) of the Department of the Interior. Second, the government raised its helium prices to levels significantly above those of the private producers. As a result, just before BLM ceased helium production in 1998, more than 90 percent of domestic demand was being satisfied from private sources—up from nothing before passage of the 1960 amendments. Somewhat ironically, it was the Bush Dome reservoir and its associated pipelines that were facilitating this change and making a unique contribution to the conservation of U.S. domestic helium. In Congress, however, initial reluctance to leave the helium business had switched to eagerness to get out, provided that the complex at Cliffside field could be preserved.