Mineral Resources

GAO is examining various proposals on how to best meet the government's need for helium, which has applications in the space program, weapon systems, and medical and scientific projects. The Department of the Interior's Bureau of Mines manages the federal helium program. During its review, GAO became aware of a Bureau practice that may cause accelerated degradation of the purity of stored federal helium. Under the terms of its storage contracts with private companies, the Bureau may restrict the rate at which privately owned helium is extracted from Cliffside--a natural gas field near Amarillo, Texas. Yet the Bureau has not imposed such a restriction pending a review of a 1989 Bureau study on this issue. Meanwhile, helium is being extracted at a rate that may degrade the purity of the remaining helium faster than it would otherwise be degraded. Because larger volumes of the mixture of natural gas and helium must then be processed to extract and refine the less pure helium, the government could incur additional losses as high as $23.3 million in 1991 dollars through 2050.

GAO found that: (1) because the Bureau is not restricting the rate at which helium is being extracted from Cliffside, a natural gas field in Amarillo, Texas, the purity of the remaining helium cloud is being degraded faster than would otherwise occur; (2) Bureau engineers and a petroleum engineering consulting firm agreed that accelerated degradation could be avoided by restricting total extractions from Cliffside to 3 million cubic feet of helium daily; (3) the Bureau can restrict the rate at which privately owned helium can be extracted from Cliffside, under the terms of its storage contracts with private companies, but has not imposed such a restriction, pending a review of a fiscal year (FY) 1989 Bureau study; (4) daily total extractions from Cliffside exceeded 3 million cubic feet 13 percent of the time during a 2-year period from April 1989 to April 1991; and (5) if the helium cloud continues to be degraded at the current rate, the Bureau will incur additional costs of as much as $23.3 million in FY 1991 dollars to extract and refine federal helium from Cliffside through FY 2050.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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