Thursday, March 3, 2011
Here's a little known property fact: Twelve miles northwest of Amarillo, Texas, the federal government has a storage facility that houses a billion cubic feet of (federally owned) helium gas.
Congress established the federal helium reserve in 1925 as a strategic supply of gas to power dirigibles. If this all seems rather silly to you, you're not alone. In 1996, the federal government - full of budget cutting fervor - mandated that the U.S. helium reserve (by far the largest in the world) be sold off to private industry by 2015.
But here's the rub; since 1996 helium as become an essential component of numerous important technologies. Liquid helium cools all kinds of medical equipment, helps our TVs work, and even powers some rockets. For many of these uses (especially the industrial ones) there's no good substitute for helium. Not one. And here's the other reality of helium: it's a non-renewable resource, mainly collected from the very slow decay of radioactive elements. As one writer put it:
There is, as of yet, no way to produce more helium. Right now in the circles studying the matter, the cheapest way to get more helium once it’s gone from Earth is to go to the Moon and mine it. Let me repeat that: once the Earth’s helium is depleted, the cheapest way to get more helium is to get it from the Moon.
There are growing concerns that the world's helium supply won't last another 30 years. To recap, at the very moment we need to concentrate on helium conservation, the federal government is flooding the market with a billion cubic feet of helium. Helium that it must sell by 2015, irrespective of market price. Thus, helium is too cheap and there's little incentive to recycle it.
This privatization raises two issues for me. First it highlights how shortsighted budget cuts can have powerful long-term consequences. Second, it raises a deeper property question: Why do we allow private ownership of oil, minerals, and natural gas? Historically, the private ownership of oil and gas is an extreme outlier (see list of national oil companies here). And more importantly, I don't think it's worked out so well. For example, it's easy to think that the people of Eastern Kentucky would have ended up better off if the government, rather than private companies, owned the coal resources of Appalachia. More money would have flowed back into their communities (a la the Alaska Permanent Fund) and it seems likely that they would have been exposed to fewer environmental catastrophes.
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