Fear no zeppelins -- U.S. maintains strategic helium stockpile

August 22, 1993|By Nelson Schwartz | Nelson Schwartz,Contributing Writer

WASHINGTON -- The last Navy blimp was deflated decades %% ago, but Uncle Sam is still in the helium business. %%

%% In former gas wells deep below the Texas panhandle, not far from Amarillo, the government has hoarded $1.3 billion worth of the inert gas. And even though the helium isn't vital to the nation's security, Washington is still spending millions to refine more each year.

The gas is part of the National Helium Reserve -- a relic of the time after World War I when the War Department wanted to ensure a constant supply of the lighter-than-air element to inflate its fleet of airships.

The reserve, run by the U.S. Bureau of Mines, makes the government the single largest owner of helium in the world. In fact, the government owns so much helium that it can set the price for public and private consumers alike.

As in the past, the reserve came under attack from budget cutters during the furious debate over President Clinton's $496 billion deficit reduction package earlier this month. But some of Congress' most vocal advocates of additional spending cuts were among the reserve's most ardent defenders.

The story of how the National Helium Reserve -- and many other little-known federal programs -- manage to survive year after year illustrates why the deficit is so hard to cut despite all the hot air generated on Capitol Hill.

Even some of its critics don't expect the helium program to float away any time soon.

"To get rid of it, it will take someone in Congress who is really willing to hang in there and fight," said T. S. Ary, former director of the Bureau of Mines.

"It will not be easy."

Although Mr. Ary has spent a great deal of time over the past five years trying to persuade Congress to do away with the program, he hasn't make much headway.

Local lawmakers blocked attempts to eliminate the reserve to save about 220 jobs at the Texas facility. And they have won the support of powerful legislators from the Texas delegation and elsewhere.

Each year, the Bureau of Mines spends $16 million to run the reserve. While there are now many private sellers of helium who charge less, federal agencies are still required by law to buy helium only from the reserve. "It's like a monopoly," said Mr. Ary.

Taxpayers' loss

The monopoly will cost taxpayers at least $20 million over the next five years because the reserve charges more for helium than the private sector, said Rep. Christopher Cox, a California Republican who is pushing legislation that would abolish the program. Selling off the reserve could generate $1.3 billion for federal coffers.

Armond Sonnek, assistant director for helium operations at the Bureau of Mines, disputes Mr. Cox's figures. He maintains that the government would actually have to pay more if it switched to commercial suppliers.

In addition, he said, "The agencies appreciate the service we provide and know we do as well or better in terms of service than the private sector."

Moreover, said Mr. Sonnek, who started working for the program as a chemist 40 years ago, "The helium is an asset and has value. At some point, somebody is going to be glad we have it and it will be sold at a profit."

But last month, the House overwhelmingly approved an amendment proposed by Mr. Cox that would permit the National Aeronautics and Space Administration, the program's biggest federal customer, to shop around for the best price -- the first step toward eliminating the reserve.

'Pull the trigger'

"We're in great shape to pull the trigger on the whole program," Mr. Cox said. "I'll get rid of the helium reserve very soon, perhaps this year."

Don't count on it.

Several powerful members of the leadership voted against Mr. Cox's amendment, including House Majority Leader Richard A. Gephardt of Missouri, Rep. Dan Rostenkowski of Illinois,

chairman of the House Ways and Means Committee, and Rep. David E. Bonior of Michigan, the House majority whip.

Helium makes strange political bedfellows. Some liberal Democrats back the program to preserve jobs, while Texas conservatives support it because local interests take priority over ideology.

Rep. Charles W. Stenholm, a Democratic deficit hawk from Texas who attacked President Clinton's budget plan for not cutting spending enough, is a helium booster.

Texas pork

Mr. Stenholm has the distinction of also being a key backer of three other questionable programs whose longevity and dubious usefulness rival that of the helium reserve -- Agriculture Department subsidies to beekeepers and wool and mohair growers that cost the Treasury more than $200 million each year.

Mr. Stenholm, who sponsored a constitutional amendment to balance the federal budget, supports these handouts because much of the wool and mohair is produced in Texas and because members of the House Agriculture Committee tend to back each other's pet programs.

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