BLM finalizes sale of Amarillo helium

The long-planned sale of a helium storage reservoir, enrichment plant and pipeline system near Amarillo, Texas, to a private firm was finalized early this month, finally allowing a federal agency to hand off responsibility for the entity after nearly a century of management.

The Bureau of Land Management's New Mexico office announced in a Dec. 12 news release it had transferred $460 million in proceeds from the sale of the Federal Helium System to the U.S. Treasury. The state BLM office long had served as the manager of the federally owned system, part of a program that began in 1925.

Congress ordered the sale of the system, which was plagued by debt, when it passed the Helium Stewardship Act of 2013. The system's new owner is the Messer Group, an industrial and medical gas company headquartered in Germany that operates across North America, South America, Asia and Europe.

"The sale of the Federal Helium System and subsequent transfer of funds marks the end of an era and a successful transition to private industry," Melanie Barnes, the BLM's New Mexico state director, stated in the news release.

Mike Larson, BLM New Mexico's program manager, said his agency inherited responsibility for the system many years ago from the U.S. Bureau of Mines. He said the sale included not just the physical assets at the Amarillo facility such as equipment and pipelines but also the helium reserves stored underground there.

The sale means the federal government is getting out of the helium production industry, Larson said — a significant development, given the relative rarity of helium on Earth and its importance in such areas as scientific research, space exploration, national defense, medical technology and high-tech manufacturing.

During the Cold War, Larson said, the federal government spent many years injecting helium underground at the Amarillo facility to store it and maintain it as a national reserve. While it is the second-most abundant element in the universe behind hydrogen, helium is decidedly less common on Earth, according to the BLM website, found in only a few locations across the planet, some of which are being exhausted.

Helium typically is recovered through natural gas deposits, according to the BLM, meaning some of the states where natural gas is common also rank high for helium production, including New Mexico, Texas, Oklahoma and Kansas.

For decades, the only site in New Mexico where helium was produced was in the Four Corners region. But over the past several years, Larson said, quantities of the gas have been recovered in Southern New Mexico as well as in Wyoming, Utah, the Gulf of Mexico and even Minnesota.

Throughout the 20th century, he said, the U.S. led the world in helium production. That may not be true anymore, he said, noting Russia and Qatar are both noted helium producers. But America remains a significant player, Larson said.

"The U.S. is still very vibrant and has a big stake in the game," Larson said.

When Congress passed the Helium Stewardship Act of 2013, the idea was for that long-accumulated reserve to be auctioned off to the private sector, Larson said, eventually leaving only the physical assets in Amarillo to be sold. But demand unexpectedly declined because of the pandemic and the development of MRI machines that don't require helium.

Nevertheless, helium remains a valuable commodity, Larson said, and continues to be used for a variety of purposes, including to inflate balloons. That noncritical use has drawn criticism from scientists who argue such a limited resource is being squandered in that way.

"It's not renewable," Larson said, noting helium's importance to the semiconductor industry and underwater welding. "There's a great demand. ... It'd be in our interests to be more mindful of how we utilize it."

The 2013 law and the Helium Privatization Act of 1996 combined to provide an exit strategy for the federal government in regard to its role in the helium industry. It took many years for that exit to occur, but Larson said that transition is now complete with the sale to Messer and the transfer of funds to the treasury.

"It's been a long road for us, and we're happy to close our tasks out and hand that program off," he said.