79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 115–365 

HELIUM EXTRACTION ACT OF 2017 

OCTOBER 23, 2017.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. BISHOP of Utah, from the Committee on Natural Resources, 

submitted the following 

R E P O R T 

[To accompany H.R. 3279] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Natural Resources, to whom was referred the 

bill (H.R. 3279) to amend the Mineral Leasing Act to provide that 

extraction of helium from gas produced under a Federal mineral 

lease shall maintain the lease as if the helium were oil and gas, 

having considered the same, report favorably thereon without 

amendment and recommend that the bill do pass. 

PURPOSE OF THE BILL

The purpose of H.R. 3279 is to amend the Mineral Leasing Act 

to provide that the extraction of helium from gas produced under 

a Federal mineral lease shall maintain the lease as if the helium 

were oil and gas. 

BACKGROUND AND NEED FOR LEGISLATION

H.R. 3279, the Helium Extraction Act of 2017, amends the Mineral Leasing Act (30 U.S.C. 181 et seq.) to allow helium extraction 

from gas on federal lands under the same lease terms as oil and 

gas. The impending closure of the Bureau of Land Management’s 

Federal Helium Reserve in 2021 threatens the stability of the domestic helium market. H.R. 3279 works to alleviate some of these 

supply concerns by facilitating the production of helium on federal 

lands, while simultaneously providing a fair return to the taxpayer. 

Refined helium continues to serve as an essential component of 

America’s economy, particularly in the fields of medicine, science, 

and defense. Liquefying at the ultra-low temperature of 4.2 °K 

(¥452 °F), helium’s unique properties as a coolant and nonreactive, 

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nonflammable gas make it irreplaceable in these and other industries. 

Historically, much of the American demand for helium has been 

satisfied by the Federal Helium Reserve. First developed in 1926 

to keep up with global advancements in military technologies, the 

Federal Helium Reserve is maintained by a reservoir and pipeline 

system spanning Oklahoma, Kansas and the panhandle of Texas. 

The Bureau of Land Management (BLM) estimates that the Reserve provides enough helium to meet more than 40 percent of domestic demand for the gas. 

In 2013, Congress passed the Helium Stewardship Act (HSA, 

Public Law 113–40) with broad bipartisan support, thus avoiding 

a closure of the Reserve and the immense market shortages that 

would have followed. The HSA presented a competitive, free market approach to sell off the remaining helium in the Federal Reserve, such that by fiscal year 2021, all helium would be auctioned 

by BLM to interested buyers. 

Acknowledging the vital role of helium in our space, defense and 

medical research and development endeavors, one of the principal 

aims of the HSA was to ensure continued access to federal helium 

users at a fair price, including federal grant recipients. The Natural Resources Committee bill report on the HSA articulated this 

intention, directing a portion of helium be preserved for federal use 

‘‘when the remaining Reserve volume equals 3 billion cubic feet,’’ 

and continuing ‘‘until the recoverable helium in the reserve is expended.’’ H. Report 113–42. 

Unfortunately, major concerns remain regarding the future of 

our domestic helium supply. BLM has interpreted the HSA to 

mean that it should sell off the Federal Helium Reserve in its entirety, including the 3 billion cubic feet designated for federal 

users. The helium supply for researchers is already in a state of 

crisis, with end-user prices for helium increasing by as much as 

250 percent in the last six years. And as the single largest producer 

of helium in the world, uncertainty in the American market could 

have far-reaching impacts on global supply as well. 

Not providing land leases for federal helium production would 

deprive the United States a supply of this precious, natural commodity and a significant revenue source for taxpayers. H.R. 3279 

would help secure our domestic helium supply for years into the future. 

Although helium is one of the most abundant elements in the 

universe, it is rare on earth, formed in the earth’s crust by the 

decay of radioactive elements. Helium is typically a byproduct of 

the natural gas extraction process. To be viewed as economically 

viable for extraction, helium must have a concentration of more 

than 0.3 percent or higher in natural gas, and some helium-rich 

natural gas reserves can contain up to 8 percent helium. When it 

is not considered economically or logistically feasible to extract and 

store crude helium for later purification, it may simply be vented 

into the atmosphere. 

The value of helium has changed over time, and varies significantly depending on whether it is supplied by the government or 

by private industry. In the private sector, Grade-A helium 

(99.997% purity or better) extracted in 2016 was estimated at a 

value of $650 million. Approximate domestic consumption of GradeVerDate Sep 11 2014 06:36 Oct 25, 2017 Jkt 079006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR365.XXX HR365
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A helium in 2016 was 1.7 billion cubic feet and its primary uses 

can be broken down as follows: 30% for magnetic resonance imaging; 17% as a lifting gas; 14% for analytical and laboratory applications; 9% for welding; 6% for engineering and scientific applications; 5% each toward both leak detection and semiconductor manufacturing; and 14% for other applications. 

The privatization process outlined in the HSA continued in 2016, 

with BLM conducting its third helium auction. This yielded an average price to private users of $104 per thousand cubic feet. Total 

sales generated almost $43 million in revenue. 

The United States Geological Survey (USGS) estimates that 

international helium extraction plants will become the main source 

for global helium buyers by the end of the decade, with seven international facilities currently in operation and others planned over 

the next three to five years. However, the recent political and diplomatic turmoil involving Qatar may cast into question the ability of 

the world’s second-largest producer to provide a stable supply of 

helium to the market. 

Today, the United States leads the world in helium supply, with 

the most recent USGS data estimating total resources and reserves 

to be 744 billion cubic feet. The volume of helium in the rest of the 

world is approximated at 1.13 trillion cubic feet. The largest three 

suppliers after the United States are Qatar (357 billion cubic feet), 

Algeria (290 billion cubic feet), and Russia (240 billion cubic feet). 

An increased reliance on foreign nations for helium could be of 

particular concern, considering the national security challenges 

that exist between the United States and the three largest foreign 

suppliers. 

The complexity of the issue has become even clearer in recent 

months. Beginning in early June, Saudi Arabia and its regional allies broke off economic and diplomatic relations with Qatar, accusing Qatar of sponsoring terrorism and enabling Islamist movements such as the Muslim Brotherhood. The nation was systematically isolated by its neighbors, with air, land and sea routes cut off 

and sanctions levied by multiple countries including Egypt, the 

United Arab Emirates and Bahrain. A regional crisis on multiple 

fronts, this geopolitical struggle may have major implications on 

American foreign policy in the Middle East, as American allies in 

the fight against ISIS have landed on opposing sides of the conflict. 

The ultimate effects of Qatar’s diplomatic crisis and its impact on 

America’s relationship with its allies may not be apparent for some 

time. Suffice it to say, the regional turmoil and the functional isolation of the world’s second largest helium producer is one concern 

among a plethora of complications. Qatar supplied 95 percent of 

U.S. helium imports over the 2012–2015 period. Also troubling is, 

as of June 13, 2017, Qatar had already closed two of its helium 

plants due to the rift with its neighboring states. 

Another foreign source of helium is Algeria, currently the world’s 

third largest producer. The United States is a major trading partner of Algeria, despite the U.S. State Department’s acknowledgment of the necessary changes Algeria must make to achieve economic diversity and transparency. Our active trading operations 

notwithstanding, the 290 billion cubic feet of Algerian helium reserves would not be nearly sufficient to satisfy American users’ demand for the element. 

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Russia also possesses a substantial helium supply. Like Algeria, 

however, Russia’s helium resources would not be able to sustain 

American domestic demand, let alone global demand. 

Given the vast political, economic, and diplomatic uncertainty 

surrounding many of the largest foreign suppliers of helium, it 

would be imprudent to rely on these nations to fully satisfy global 

demand. Past supply shortages have had drastically negative effects on the price of the product, and introducing more unpredictability into the future of helium supply has the potential to destabilize the market. 

With the impending closure of the Federal Helium Reserve in 

2021, and without other means for the United States government 

to produce its own helium, the future of the domestic and global 

helium markets will face ever increasing uncertainty. 

Venting off helium, or otherwise not facilitating its extraction 

from natural gas reserves on federal lands, would be a neglectful 

waste of a valuable and finite natural resource. With the complete 

sale of the Federal Helium Reserve fast approaching, alternative 

routes to helium acquisition for future use, particularly for federal 

users, remains largely unclear. 

Easing America’s ability to actively extract helium on federal 

lands under the Helium Extraction Act of 2017 would not only help 

secure the future of the American helium supply, but also has the 

potential to be a substantial revenue source, through both land 

lease royalties and foreign exports to support international demand. 

COMMITTEE ACTION

H.R. 3279 was introduced on July 18, 2017, by Congressman 

Paul Cook (R–CA). The bill was referred to the Committee on Natural Resources. Previously, the Subcommittee on Energy and Mineral Resources held a hearing on a discussion draft of the bill on 

June 21, 2017. On July 25, 2017, the Natural Resources Committee 

met to consider the bill. No amendments were offered, and the bill 

was ordered favorably reported to the House of Representatives by 

unanimous consent on July 26, 2017. 

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII 

of the Rules of the House of Representatives, the Committee on 

Natural Resources’ oversight findings and recommendations are reflected in the body of this report. 

COMPLIANCE WITH HOUSE RULE XIII AND CONGRESSIONAL BUDGET

ACT

1. Cost of Legislation and the Congressional Budget Act. With respect to the requirements of clause 3(c)(2) and (3) of rule XIII of 

the Rules of the House of Representatives and sections 308(a) and 

402 of the Congressional Budget Act of 1974, the Committee has 

received the following estimate for the bill from the Director of the 

Congressional Budget Office: 

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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, October 23, 2017. 

Hon. ROB BISHOP, 

Chairman, Committee on Natural Resources, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3279, the Helium Extraction Act of 2017. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Jeff LaFave. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

H.R. 3279—Helium Extraction Act of 2017 

Summary: H.R. 3279 would allow firms to retain federal oil and 

gas leases that would otherwise expire for the purpose of extracting 

helium. Based on information provided by the Bureau of Land 

Management (BLM) and firms operating in the mineral extraction 

industry, CBO estimates that enacting the bill would increase offsetting receipts, which are treated as reductions in direct spending, 

by $9 million over the 2018–2027 period. Because enacting the bill 

would affect direct spending, pay-as-you procedures apply. Enacting the bill would not affect revenues. 

CBO estimates that enacting H.R. 3279 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2028. 

H.R. 3279 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Estimated cost to the Federal Government: The estimated budgetary effect of H.R. 3279 is shown in the following table. The costs 

of this legislation fall within budget function 300 (natural resources 

and environment). 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018– 

2022 

2018– 

2027 

DECREASES IN DIRECT SPENDING 

Estimated Budget Authority .. * ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥4 ¥9 

Estimated Outlays ................. * ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥4 ¥9 

Note: * = between ¥$500,000 and zero. 

Basis of estimate: For this estimate, CBO assumes that H.R. 

3279 will be enacted near the beginning of fiscal year 2018. 

H.R. 3279 would allow firms to retain federal oil and gas leases 

beyond 10 years to extract helium. Under current law, firms enter 

into agreements with BLM to extract helium from active oil and 

gas leases. Those leases expire after 10 years if they are no longer 

producing commercial quantities of oil or gas, even if commercial 

quantities of helium are still being extracted. In recent years, BLM 

has granted waivers that allow firms to continue extracting helium 

on leases that otherwise would have expired. In 2016, royalties for 

helium produced on federal oil and gas leases totaled $17 million. 

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All proceeds from the production of helium are deposited in the 

Treasury. 

CBO expects that, under the bill, firms would be more likely to 

acquire oil and gas leases containing noncommercial quantities of 

hydrocarbons but high volumes of helium. Based on an analysis of 

information provided by firms in the mineral extraction industry, 

we estimate that royalties from helium production on those new 

leases would average about $1 million a year. Because CBO expects 

that the number of firms seeking to develop such leases over the 

next 10 years would be small, we estimate that receipts from bonus 

bids for those leases would be negligible. Finally, CBO estimates 

that enacting H.R. 3279 would have no significant effect on production from existing leases because firms extracting helium on leases 

that may expire would probably obtain permission from BLM to 

continue their extraction of helium. In total CBO estimates that 

enacting H.R. 3279 would increase offsetting receipts by $9 million 

over the 2018–2027 period. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3279 AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON NATURAL RESOURCES ON JULY 26, 2017 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018– 

2022 

2018– 

2027 

NET INCREASE IN THE DEFICIT 

Statutory Pay-As-You-Go Impact ................................... 0 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥4 ¥9 

Increase in long-term direct spending and deficits: CBO also estimates that enacting H.R. 3279 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028. 

Intergovernmental and private-sector impact: H.R. 3279 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA. 

Estimate prepared by: Federal costs: Jeff LaFave; Impact on 

State, local, and tribal governments: Jon Sperl; Impact on the private sector: Amy Petz. 

Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

2. General Performance Goals and Objectives. As required by 

clause 3(c)(4) of rule XIII, the general performance goal or objective 

of this bill is to amend the Mineral Leasing Act to provide that the 

extraction of helium from gas produced under a Federal mineral 

lease shall maintain the lease as if the helium were oil and gas. 

EARMARK STATEMENT

This bill does not contain any Congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined under clause 9(e), 

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9(f), and 9(g) of rule XXI of the Rules of the House of Representatives. 

COMPLIANCE WITH PUBLIC LAW 104–4 

This bill contains no unfunded mandates. 

COMPLIANCE WITH H. RES. 5 

Directed Rule Making. This bill does not contain any directed 

rule makings. 

Duplication of Existing Programs. This bill does not establish or 

reauthorize a program of the federal government known to be duplicative of another program. Such program was not included in 

any report from the Government Accountability Office to Congress 

pursuant to section 21 of Public Law 111–139 or identified in the 

most recent Catalog of Federal Domestic Assistance published pursuant to the Federal Program Information Act (Public Law 95–220, 

as amended by Public Law 98–169) as relating to other programs. 

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

MINERAL LEASING ACT 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That deposits of 

coal, phosphate, sodium, potassium, oil, oil shale, gilsonite (including all vein-type solid hydrocarbons), or gas, and lands containing 

such deposits owned by the United States, including those in national forests, but excluding lands acquired under the Act known 

as the Appalachian Forest Act, approved March 1, 1911 (36 Stat. 

961), and those in incorporated cities, towns, and villages and in 

national parks and monuments, those acquired under other Acts 

subsequent to February 25, 1920, and lands within the naval petroleum and oil-shale reserves, except as hereinafter provided, shall 

be subject to disposition in the form and manner provided by this 

Act to citizens of the United States, or to associations of such citizens, or to any corporation organized under the laws of the United 

States, or of any State or Territory thereof, or in the case of coal, 

oil, oil shale, or gas, to municipalities. Citizens of another country, 

the laws, customs, or regulations of which deny similar or like 

privileges to citizens or corporations of this country, shall not by 

stock ownership, stock holding, or stock control, own any interest 

in any lease acquired under the provisions of this Act. 

The term ‘‘oil’’ shall embrace all nongaseous hydrocarbon substances other than those substances leasable as coal, oil shale, or 

gilsonite (including all vein-type solid hydrocarbons). 

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The term ‘‘combined hydrocarbon lease’’ shall refer to a lease 

issued in a special tar sand area pursuant to section 17 after the 

date of enactment of the Combined Hydrocarbon Leasing Act of 

1981. 

The term ‘‘special tar sand area’’ means (1) an area designated 

by the Secretary of the Interior’s orders of November 20, 1980 (45 

FR 76800–76801) and January 21, 1981 (46 FR 6077–6078) as containing substantial deposits of tar sand. 

The United States reserves the ownership of and the right to extract helium from all gas produced from lands leased or otherwise 

granted under the provisions of this Act, under such rules and regulations as shall be prescribed by the Secretary of the Interior: Provided further, That in the extraction of helium from gas produced 

from such lands it shall be so extracted as to cause no substantial 

delay in the delivery of gas produced from the well to the purchaser thereof, and that extraction of helium from gas produced 

from such lands shall maintain the lease as if the extracted helium 

were oil and gas. 

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