Monday, September 25, 2023

C&EN: Air Products suing to stop sale of the federal helium system...

Also in this week's C&EN, this fascinating article by Craig Bettenhausen: 
The industrial gas supplier Air Products has filed a lawsuit against the US government seeking to block the ongoing sale of the Federal Helium System. The firm is asking a US District Court for an immediate injunction pausing all proceedings and a set of judgments declaring the sale unlawful as currently structured.

The US Federal Helium System is a set of assets for storing, refining, and distributing helium. It includes a large geological dome formation near Amarillo, Texas; nearly 23 million m 3 of raw helium inside the dome; a set of pipelines that distribute helium to refining sites in Texas, Oklahoma, and Kansas; and supporting equipment and infrastructure. The system, established in the 1920s to fill military dirigibles, currently supplies more than 9% of global helium demand.

The US Congress passed laws in 1996 and 2013 requiring the helium system to be privatized. In response, the government began accepting bids for the system in July of this year. It plans to close bidding on Nov. 15 and sell the system to the winning bidder by mid-March 2024. The legislation requires the government to ensure the stability of helium supplies and markets while disposing of the system.

Air Products cites three main reasons the auction plan sets up any private owner to fail—possibly causing the system to shut down.

One is that the system, especially the pipelines, would struggle to meet state workplace safety, transportation, and environmental standards. The federal government is exempt from state regulations, but a private owner would have to comply. Air Products also says the government lacks complete documentation for several spots where the pipeline runs through private land, “and it takes only one bad right-of-way to shut down the entire pipeline.”

A third complaint is that the sale does not include the crude helium enrichment unit that takes helium out of the dome and prepares it for transfer through the pipelines, nor does it convey to the buyer the operating agreement the government has with the unit’s owner, Cliffside Refiners. Cliffside is a limited partnership consisting of Air Products and the industrial gas firms Praxair, Kinder Morgan, and Messer.
This whole thing is pretty bonkers. I'm genuinely not sure what the right answer is, but it seems to me that having the US government being the guarantor of some portion (9%) of the world's helium supply isn't such a bad thing, especially with the US probably being a reasonably high consumer of helium for both health care and scientific instruments. Here's hoping that someone comes up with a reasonable solution sometime soon...

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