Managing the Helium Reserve: Auctions are the Best Way to Allocate Scarce Resources

September 22, 2013
Congress needs to reauthorize the Federal Helium Program now in order to avoid idling a valuable public resource in the midst of a serious helium shortage.

Unless Congress acts soon, the Federal Helium Program will begin shutting down on October 1. If this happens a valuable federal resource will lie unutilized and 42 percent of current domestic supply will disappear at a time when the helium market is already experiencing shortages. Congress should reauthorize the program with two changes. First, the government should increasingly use auctions to maximize its revenue. Second, since the Reserve will soon be depleted, annual sales should decline gradually, giving the markets time to adjust.