Association for Public Policy Analysis & Management

Helium is a unique natural resource that is used in a wide array of fields, ranging from medicine to electronics. The market for helium consists of a handful of suppliers and demand from an assortment of industries. This imbalance has created a fragile and easily disrupted market that subjects the buyers to unpredictable price fluctuations that are difficult to offset. The US federal government has control over a large portion of that market in the Federal Helium Reserve (FHR), overseen by the Bureau of Land Management. This reserve was created with the Helium Act of 1925 to help advance national defense and develop aeronautics. Amendments and further legislation relating to this act have since made the operation of the FHR a crucial component of the global helium supply, but the 2013 Helium Stewardship Act mandated the FHR be sold off. This is set to be complete in 2021, and is predicted to shift the global market by raising prices for consumers given the oligopoly that the sellers hold. Given this approaching deadline and the importance of helium in so many industries, the state of California should invest in purchasing a portion of the FHR and setting up refineries to develop a statewide helium reserve. This would be an important step towards the diversification of the market to protect consumers and maintain more stable prices for helium. The state of California has always been an exponent in innovation, and this strategic decision would help situate the state to continue its leadership.