L. Neil Smith's

Number 8, May 1996

The Legacy of the Giant Gasbags

By Vin Suprynowicz

Special to The Libertarian Enterprise

         It's hard now to grasp how exciting it must have been for the United States military, seven decades ago, to realize that this country and this country alone possessed a safe, economical way to isolate helium.
         The process separates the inert, lighter-than-air element from natural gas -- the mixture of methane and other stuff that often as not gets burned off as it emerges as a by-product from Texas oil wells.
         Back then, of course, blimps and dirigibles were valuable not only as competitors to ocean-going ships for prestigious, high-end passenger travel, but also for military purposes.
         German dirigibles had been used to bomb England during World War One. They didn't do much damage, but who knew what the future might bring? Naval airships also seemed an ideal long-range platform from which to hunt Nazi U-boats in the Caribbean and South Atlantic -- the Navy built several large rigid-frame dirigibles in the 1930s, though they proved unwieldy. In fact, several were wrecked in storms, with tragic loss of life, before the next war even started. The Navy switched to blimps.
         Still, the fact remained: Only American dirigibles and blimps could be floated with fireproof helium.
         America jealously guarded her helium monopoly, refusing to sell the stuff to Nazi Germany, whose airships thus remained dependent on highly-flammable hydrogen (witness the tragic end of the Hindenburg in 1937, which ended airship passenger travel for good.)
         In 1929, imagining future wars in which the skies would grow dark with clouds of airships, Congress first appropriated money to make the storage and marketing of American helium a government operation. By 1960, the Helium Reserve program had taken on a life of its own, purchasing 4 billion cubic feet per year -- 10 times the annual rate of use -- and paying private industry to build huge refining and underground storage facilities for the inert gas, in the Texas panhandle.
         (To do that, of course, Washington had to guarantee a higher-than-market price: $35 per 1,000 cubic feet, up from the previous $15. The government has been buying surplus production to maintain a similarly artificial high price ever since.)
         Today, the Bureau of Mines loses $100 million per year storing a billion dollars worth of this stuff -- enough to meet world demand for more than a century. Over the years, the government's helium operation has run up an estimated debt of $1.4 billion.
         Meantime, of course, it turned out the huge, cumbersome airships could be seen, intercepted and shot down by modern heavier-than-air planes long before they could accomplish anything. The military usefulness of the airship faded like a chimera. The military hasn't commissioned a new dirigible or blimp for 50 years.
         Finally, on Tuesday, April 30, 1996, the House of Representatives voted 411-10 to kill the Federal Helium Reserve ... within 18 months. After current surpluses run out sometime in the 22nd century, private industry will just have to manufacture their own helium -- which they are perfectly capable of doing, of course.
         But needless to say, not everyone is a happy camper. Two years ago, the Dallas Morning News reports that President Clinton backed away from shutting down the program in order to win a single additional vote for his deficit-reduction package, that of the former Democratic congressman from Amarillo, Rep. Bill Sarpalius.
         Sarpalius has since been replaced by Republican Mac Thornberry, who despite belonging to the "budget-cutting" party, also seems to know the importance of the votes of the 200 workers at the government's Amarillo helium facility.
         "If we are going to do it the right way and do the right thing by the workers, then major revisions need to be taken," said Rep. Thornberry last week, arguing for a more gradual privatization of the facility. "We all ought to strive not to just make the government smaller, but make the government smarter."
         Will the federal helium reserve really die? Is 18 months really the shortest time over which taxpayers can expect to see an end to the 65-year practice of pouring our money down a huge empty hole in west Texas at a rate of $100 million per year?
         As the government dumps its 31.4 billion cubic feet of surplus helium on the market between the years of 2005 and 2015 (as now planned), what further displacements of the market will occur? What further cries for relief will be heard?
         Ah, what a tangled web it weaves, when government first sets out to corner the market in a "vital commodity."
         See "subsidy, wool and mohair."

Vin Suprynowicz is the assistant editorial page editor of the Las Vegas Review-Journal. Readers may contact him via e-mail at vin@lvrj.com. The web site for the Suprynowicz column is at http://www.nguworld.com/vindex/. The column is syndicated in the United States and Canada via Mountain Media Syndications, P.O. Box 4422, Las Vegas Nev. 89127.

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