Schumer Reveals: Pending Closure of Federal Helium Reserve, as Early as Next Year, Threatens Western New York Businesses Like Industry Leader Praxair - Senator Pushes Bipartisan Plan to Keep Reserve Open & Protect WNY Jobs
Press Release
Today, standing at Praxair Inc. in Tonawanda, U.S. Senator Charles E. Schumer announced his plan to push critical legislation to prevent the Federal Helium Reserve in Amarillo, Texas from pending closure, which could have a negative impact on the availability of helium for critical applications, such as high-tech manufacturing, medical procedures, and more. The Helium Stewardship Act of 2012 aims to re-authorize the operation of the Federal Helium Reserve, to promote the responsible management of federal helium assets, and to stimulate future development of private sources of helium. Praxair is a lead supporter of this must-pass legislation and applauds Schumer's efforts to help secure and preserve reliable helium supplies for important commercial users across upstate New York, like hospitals and high-tech manufacturers, and prevent disruptions for suppliers like Praxair.
The Federal Helium Reserve currently provides approximately half of all domestic helium needs. The Helium Stewardship Act, bipartisan legislation that Schumer will push to bring to the Senate floor, would authorize the Secretary of the Interior to continue selling gas from the federal helium reserve at market prices and promote new strategies to produce and preserve domestic helium sources. Schumer has been discussing the need for the legislation with major New York businesses like Praxair, Global Foundries, IBM, Dresser-Rand and Corning, Inc. who consider reliable helium supply a critical aspect for their businesses and their continued growth, and urged the Senator to prioritize passage of the reforms. Helium is also a vital component in medical procedures like MRIs, and is important to the work being done at Roswell Park Cancer Institute. Additionally, helium is used in some of the research efforts currently underway at Buffalo based research leader CUBRC, as well as the University at Buffalo.
"We cannot let our national helium supply float away, especially because a healthy reserve allows American helium suppliers, like Praxair, to create good-paying, high-tech jobs in western New York," said Schumer. "American manufacturing, high-tech and medical industries are already struggling to deal with helium shortages and cannot afford to have a devastating disruption in the market. If Congress does not act quickly, the key job-creating industries will face very real economic troubles, as important companies like Praxair suffer from helium price increases and supply issues. High-tech manufacturers in western New York and across the state and the country rely on a steady supply of helium gas in order to stay open for business and Congress must act now to make sure we have a sure and steady future supply."
"Praxair applauds Senator Schumer's championing of the Helium Stewardship Act of 2012," said Ray Roberge, Praxair's senior vice president and chief technology officer. "Prompt enactment of the current Federal Helium Program will ensure the availability of helium for refiners and distributors like Praxair to customers across the country."
Schumer was joined by Praxair Senior Vice President and Technology Officer Ray Roberge, Praxair Global Helium Director Jane Hoffman, Dr. Ronald Alberico, Director of Neuroradiology/Head and Neck Imaging and Director of Clinical MRI at Roswell Park Cancer Institute and Dr. Michael Holden, Vice-President of the Aeronautics Sector at Buffalo based non-profit research hub CUBRC. Together with Senator Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee, and Senator John Barrasso, Schumer is co-sponsoring a bill to secure long-term access to the Bureau of Land Management's crude helium for all federal users at a fair market value for US taxpayers. This proposal would rework the Federal Helium Reserve program so that it doesn't shut its doors, while working to establish a more reliable domestic supply. Helium would be sold off more carefully, and at market rates, to encourage private producers to extract more helium, or recycle helium they already have. This impending crisis would have far-reaching effects on the US economy. According to the Semiconductor International Association (SIA), a stable and reliable supply of helium is "critical to the manufacturing process and continued health of the U.S. semiconductor manufacturing industry." Though perhaps most famous for being the crucial ingredient in party balloons, helium gas is also a necessity in a range of technologies including medical scanners, LCD screens, welding tools, and high-tech computer chips.
Instability in the domestic helium supply and the pending closure of the federal helium reserve could have ramifications for Praxair's customers in upstate NY, including: Corning Inc., Roswell Park Cancer Institute, Dresser-Rand, and Buffalo based research engine CUBRC.
"It is extremely important that we address the shortage of helium before it becomes a crisis," said Dr. Donald L. Trump, President and CEO of Roswell Park Cancer Institute (RPCI). "Helium is very important in clinical care as well as cancer research as it is critical to the function of advanced imaging technologies, which are essential to modern cancer medicine, as well as imaging studies, which are the cornerstone of much of the cutting-edge cancer research done at RPCI. Shortages or substantial increases in price will threaten top-notch cancer care as well as basic and translational research progress, which is crucial to better understanding cancer and advancing the mission of cancer research."
"Dresser-Rand is in full support of Sen. Schumer's efforts to extend the life of the Federal Helium Reserve. Dresser-Rand uses helium as a process gas medium for mechanical and performance testing of its DATUM centrifugal compressor product line in its Olean, NY manufacturing operation. The continued availability and price stability of helium is therefore essential to Dresser-Rand's continued operations" said John Stahley, General Manager, Dresser-Rand Olean Operations.
"The Large Energy National Shock Tunnels (LENS) developed and operated by CUBRC in Buffalo, New York are the most powerful wind tunnels in the world for the research and development of High Speed Weapon Systems and Re-Entry Vehicles and are used extensively by the Department of Defense and NASA to perform important testing" said Dr. Michael Holden, Vice-President for CUBRC's Aeronautics Sector. "Without access to significant quantities of helium we would be unable to run these facilities, America would lose an invaluable testing capability, and many jobs would be lost in Buffalo and throughout New York State."
Russia, Algeria and Qatar have all recently built processing facilities for helium. Canada, China and Poland are also thought to have potential reserves, according to the U.S. Geological Survey. The key question is whether it will be an orderly transition to avoid unexpected supply disruptions worldwide.
In 1996, Congress passed the Helium Privatization Act, requiring the Federal Helium Reserve to shut down once the reserves run out of supply or when the reserve's $1.3 billion debt, incurred over 50 years in order to build up the nation's helium stockpile, is re-paid. The intention of the 1996 law was to wind down the Reserve's debt by selling the majority of all the available crude helium left in federal lands by 2015 and have private suppliers fill the void in domestic helium supplies. However, due to price controls and other logistical hurdles, billions of cubic feet of helium that could last through 2020 still sit in the Reserve and industry still relies on the Reserve for half of its domestic supply needs. Schumer noted that time is running out, and Congress must act swiftly to extend the life of this critical resource.
Experts predict that the amount of helium revenue needed to meet the remaining debt obligations, which is collected from sales of helium to private refiners, could be met by the end of 2012, forcing the start of a mandatory shutdown process of the Reserve and causing a helium supply disruption. The Helium Stewardship Act, authored by Senator Bingaman (D- New Mexico) and Senator John Barasso (R-Wyoming), that Schumer is pushing to bring to the Senate floor would authorize the Secretary of the Interior to continue selling Federally-owned crude helium at market prices and promote new strategies to produce and preserve domestic helium sources. Schumer has been discussing the need for the legislation with major New York chip-makers like Global Foundries and IBM, who consider reliable helium supply to be a critical aspect of their business, and urged the Senator to prioritize passage of the reforms.
Praxair provides atmospheric, high-performance coatings, as well as process and specialty gases such as oxygen, nitrogen, argon, carbon dioxide, helium, and hydrogen. The corporation also specializes in engineering organizational designs and constructing air separation systems, known as cryogenic and non-cryogenic, as well as technologies, such as coatings and powders for metal surfaces, which protects from wear, high temperatures, and corrosion. The company's primary engineering and operation center, Praxair Technology Center (PTC), is located in Tonawanda. Praxair supports the global industrial gases business, employing over 1,000 workers and it represents the largest center in the Americas, and one of the largest worldwide. The center has over 1,500 active patents, and the research and development team in Tonawanda has continually set standards of excellence for the entire industry to follow. The International Monitoring and Production Assistance Center (IMPAC), is also located in Tonawanda. IMPAC remotely monitors plants, which allows them to operate more efficiently and is equipped with immediate alarm responses and plant shutdowns.
The Federal Helium Reserve (FHR) is the world's only helium gas stockpile, and is located just outside of Amarillo, Texas. The FHR is connected by a Federal pipeline to private helium refiners spread throughout Northern Texas, the Oklahoma panhandle, and Southern Kansas. Unrefined "crude" helium sales from the FHR supply roughly half of all domestic helium needs and one third of global helium demand each year. According to the SIA, helium's unique physical and chemical properties have made it critical to the manufacture of semiconductors. The industry uses helium "due to its high thermal conductivity and to achieve ultra-clean manufacturing environments." Other products are equally affected. For complicated equipment like MRI machines, a lack of regular liquid helium circulation may cause the powerful magnets permanent damage. Helium is essential for complex circuits and computer chips that microelectronic companies produce.
Source