I ndustry / Business
Future helium supplies rest with court case The real issue is the life or death of the 10-year-old helium conservation program, which Interior has tried twice to terminate Sometime soon, possibly within a few days, the 10th Circuit Court of Appeals in Denver will hand down a decision that could determine whether this country conserves or wastes 20.7 billion cu. ft. of helium. The irony is that the fate of that huge volume of an irrecoverable natural resource will be decided, not on the merits of saving or wasting the helium, but upon the adequacy of an environmental impact statement. The real issue is the life or death of the 10-year-old helium conservation program, which was given birth by the Helium Act amendment of 1960. The Department of Interior has tried twice to terminate the program, under which its Bureau of Mines buys helium from four companies and stores it for future consumption. When it first tried to cancel its helium supply contracts in 1971, three companies—Cities Service Helex, National Helium, and Phillips Petroleum—obtained an injunction because Interior hadn't prepared an environmental impact statement, as the National Environmental Protection Act requires. Last fall Interior issued its environmental impact statement; this year, it petitioned the U.S. District Court in Kansas to lift the injunction. Again the court ruled against Interior, saying that the impact statement fell "woefully short" of NEPA's requirements and that it did not take a "hard look" at the environmental effect of halting the helium conservation program. Now Interior is appealing that decision in the Denver court, and the Government, helium suppliers, and helium consumers are anxiously waiting for the court's decision. Meanwhile, a fourth supplier, Northern Helex, had already stopped its helium deliveries in March 1971 and sued Interior for breach of contract because Interior didn't make payments on time. The U.S. Court of Claims ruled that Interior did indeed break its contract, but the issue of damages is still pending. By ruling against Interior because of its faulty environmental impact study, the Kansas district court never did 6
C&ENOct. 22, 1973
have to decide whether the department's attempt to terminate the helium conservation program is legal or illegal. However, even a casual reading of Judge Frank G. Theis' decision and opinion indicates Interior will be hard pressed to get out of its contracts. More is at stake than just three contracts. The battle is over the very existence of the helium conservation program. Although the U.S. has most of the world's economically recoverable reserves, helium is a scarce resource. Most of it is extracted from the helium-rich (0.3%) natural gas found in the Hugoton, Panhandle, Keyes, and Greenwood gas fields of Texas, Oklahoma, and Kansas. Until 1960, most of this helium was simply wasted, and until 1960 the Bureau of Mines produced virtually all of the helium in the U.S. To ensure adequate supplies for future demand, the helium conservation program was written into the 1960 Helium Act amendment. The amendment authorized Interior to make longterm contracts (up to 25 years) with companies that would produce and supply crude helium (averaging 70%) to the Bureau of Mines. The bureau then would store the helium at its Cliffside, Tex., fields and sell it as future demand required. Interior signed 22-year procurement contracts with the four suppliers in 1961. Each contract required the company to build its own plant and supply
BuMines helium sales are hit hard as market drops
Source: Bureau of Mines
helium to the bureau at prices ranging from $10.30 to $11.78 per thousand cu. ft. of contained helium. Today the price is about $13. The contracts are worth $47.5 million annually, all that the amendment allows. For several years, the conservation program ran smoothly as demand for helium increased rapidly. The Government's space program took most of the helium for purging and pressurizing. Leak detection, welding, underwater breathing equipment, chromatography, and cryogenics are other major uses of helium. In the late sixties the program began running into trouble. Cutbacks in the space program and other government activities put a crimp in helium demand. The market fell from 922 million cu. ft. in 1967 to 580 million cu. ft. last year. In addition, private companies began producing helium outside the government program and undercut Interior's selling price of $35 per thousand cu. ft. Although private sales managed to increase, Bureau of Mines' sales plummeted from 607 million cu. ft. in 1967 to 166 million cu. ft. last year. The helium conservation program, which was designed to become self-sustaining, became anything but. At the end of fiscal year 1972, it was $349 million in debt to the Treasury Department, from whom it borrowed operating funds. Interior owed large sums, not only to Northern Helex, but to the other three contracting companies that continued to supply helium during the legal battle. In 1971, when Interior first announced that it was halting the program, there was no request in the President's budget message for contract funds. No appropriation request has been sent to the current Congress. Interior says that the program has satisfied its purpose of supplying helium "for essential government activities." With about 35 billion cu. ft. now in storage, proved reserves of natural gas will be able to supply helium demands through the year 2000, says Interior. It argues that sooner or later helium will have to come from other sources and that the 20.7 billion cu. ft. that will be lost if the program ends would only have postponed that day by four to 15 years. Proponents of the program argue that it was set up not only for "essential government activities," but to avoid wasting helium "without serving any useful purpose." They feel that the Government is looking into a tunnel
when it sees a declining helium demand. Demand for the gas has a history of long growth periods and short periods of decline. Not only will present outlets for helium increase, they argue, but sophisticated technology still under development holds great promise for helium consumption. Both Government and industry, for instance, are conducting research on magnetohydrodynamics, helium-cooled fusion reactors, superconducting power transmission, and superconducting magnetic lévitation transportation systems. These and still unforeseen developments will make the helium program economically viable, say the conservationists, although they admit that payout time will be long. But it is precisely because of this long payout time
Helium capacity totals 4.5 billion cu. ft. per year Millions of cu. ft. per year Bureau of Mines Exell Keys
Capacity
Masterson, Tex. Keys, Okla.
780 360 420
Navajo, Ariz.
595 75
Otis, Kan. Elkhart, Kan.
180 140
Scott City, Kan.
200
Conservation program companies Northern Helex Bushton, Kan. Phillips Hansford County, Tex.) Petroleum Dumas, Tex. J Cities Service Helex Ulysses, Kan. National Helium Liberal, Kan.
3125
Private industry Kerr-McGee Kansas Refined Helium Alamo Chemical Cities Service Cryogenics
TOTAL
675 788 610 1052 4500
Source: Bureau of M ines
that only Government, and not industry, will be able to afford to operate a helium storage program. They claim that costs of obtaining helium from alternate sources, such as leaner gas or the atmosphere, will be so expensive that the economic advantages of recovering helium from present reserves of 0.3% gas are obvious. Rep. John P. Saylor (R.-Pa.) blames the Government's proposal to drop the program on "the dullard, neurotic approach adopted by the Office of Management and Budget' ' to cut back on federal spending. If the courts do block Interior's attempt to terminate the helium conservation program, 20.7 billion cu. ft. of helium will be saved, but Interior undoubtedly will face the problem of making the program self-sustaining. Among possible solutions: negotiate lower purchase prices with the contractors, issue an executive order requiring all government agencies to buy their helium from Interior, raise the selling price, slap a tax on private sales, and lower or eliminate the interest on money borrowed to operate the program.
Paper capacity rises faster than expected Capacity in the U.S. paper industry may finally be moving upward to meet demand. Although the figures for plant expansion this year and the next three years still look modest, they are up from predictions made a year ago. These are the findings of an American Paper Institute (API) survey of the shortage-plagued paper, paperboard, and pulp industry. For 1973, API says, "The U.S. paper industry has performed a remarkable job of meeting sharply increasing demands." Specifically, paper industry capacity has jumped faster than predicted—2.5% compared with a predicted 2.0% this year and 4.7% compared with a predicted 2.1% in 1972. As a result, capacity at the end of this year is now put at 65.2 million tons. A year ago, capacity at the end of 1973 was expected to reach only 63.2 million tons, an increase of 3.1%. API cites several factors for the upward revision. Planned operating days during the year were pushed up an average of 2.3. Machine improvements were completed more rapidly than expected. Some mills slated for shutdown were kept open, and other mills in mothballs were reactivated. Most important, operating efficiency improved as a result of longer runs, better product mixes, and streamlined mill lines. API cautions, however, that "additional capacity resulting from many of these factors is nonrepetitive in nature, and the extent to which it can be sustained over long time periods is not yet clear." During the next three years, capacity now is expected to increase at an average annual rate of 2.4%, compared to a rate of 1.4% predicted a year ago. Annual growth will be 2.4% in 1974, 4.0% in 1975, and 0.9% in 1976. This would put industry capacity at 70 million tons by the end of 1976. This increased capacity will require more raw materials for paper and paperboard. API finds that companies are planning heavy reliance on secondary (waste) sources, which it predicts will increase by 4.7% per year through 1975. By contrast, primary wood pulp supplies will increase just 0.7% per year in the same period, API forecasts. Thus, by the end of 1975, the paper and paperboard industry will be getting 52.7% of its raw materials from secondary sources. In wood pulp, API expects only a modest capacity growth, averaging just 1.5% per year through 1976. The institute warns, "Much new paper-making capacity will be installed where sufficient pulping capacity already exists, with a consequent reduction in market pulp supplies. This wood pulp deficiency suggests increased dependence on imports at a time when worldwide pulp markets are already tight."
MERCAPTO COMPOUNDS THIOLS-MERCAPTANS-RSH Ammonium Thioglycolate Benzyl Mercaptan p-Chlorobenzyl Mercaptan 2-Diethylaminoethanethiol Hydrochloride Iso-octyl Thioglycolate 2-Mercaptoethylamine Hydrochloride 3-Mercaptopropionic Acid Octadecyl Thioglycolate Thioacetic Acid (thiolacetic acid) Thiobenzoic Acid 1-Thioglycerol Thioglycolic Acid Thiolactic Acid Thiomalic Acid POLYTHIOLS-POLYMERCAPTANS-R-
