"Current law (cira 2013) requires BLM to sell off the crude helium remaining in the Federal Helium Reserve in order to repay the U.S. Treasury the $1.3 billion debt incurred creating it. This debt will be repaid this fiscal year and that, as a consequence, the helium program will terminate at the end of the current fiscal year (October 1, 2013), absent Congressional action.
Currently, the Federal Helium Reserve supplies roughly 40% of domestic and 30% of global helium demand. Loss of access to the Federal Helium Reserve would result in significant disruptions to a large number of critical U.S. industries." https://www.energy.senate.gov/services/files/494b2f9e-c8f5-4...
BLM was required (to sell it) by Congress in the Helium Stewardship Act of 2013, as the alternative was to not offer any H to the market due to the authorization to sell expiring. Sponsored by a Republican and passed basically unanimously with the proceeds used to pay of the debt (back when we cared about that)
The idea of selling things like our strategic helium supply for $460M to "pay off the debt" would be like me selling bricks from the foundation of my house for a penny to "pay off my mortgage".
$460M was for what was left after the large majority had already been sold.
In the best case, "strategic reserves" are the government speculating on commodity prices. They use tax dollars to buy a commodity -- raising the price on everyone so they can hoard it -- and then more tax dollars to pay for a storage facility, and if they're lucky the price goes up by enough to pay for the storage and the time value of money by they time they sell it again. That frequently doesn't happen.
In the common case it's the government subsidizing corporations -- including foreign ones -- by using tax dollars (at government contractor rates) to operate a storage facility at a loss so the industry doesn't have to do it themselves. Then, when they go to unload it, they generally unload enough to lower the market price on purpose, practically guaranteeing that the taxpayer is getting a below-market return. This unloading also has a statistical correlation with the election cycle (see also "strategic petroleum reserve") which is extra stupid. And the expectation that it will happen deters others who aren't paying government contractor rates from storing the commodity, so from a "strategic" perspective you don't get anywhere near as much of a buffer as you're paying for.
If the tech industry wants a reserve of helium then they should buy some land, install some tanks and fill them with helium in years when there isn't a shortfall.
> In the best case, "strategic reserves" are the government speculating on commodity prices.
A horrendously misinformed take. Strategic reserves have broadly one of two primary purposes. First, providing the government with the ability to stabilize market prices in the short term when volatility strikes. Second, providing a supply of an essential resource to an essential industry in the event that external supplies are unexpectedly cut off temporarily.
Supply shocks are bad. The economy grinding to a halt at the whim of a geopolitical adversary or natural disaster is also bad. Ensuring a stable market is one of the most fundamental purposes of having a government at all.
> First, providing the government with the ability to stabilize market prices in the short term when volatility strikes.
Which is the thing they don't really even do, because their existence is not a secret, but then knowing of their existence discourages anyone else from setting up a reserve because they expect the government to unload right when they'd be trying to recover the costs of operating it. Then the market has less slack in it and the government has to tap into the reserve more frequently and in larger amounts, causing the reserve to be much more easily exhausted than you would intuitively expect because the whole world is now expecting you to bail them out when the time comes.
Worse, it encourages companies to rely on its existence instead of making contingencies, and then if it does get exhausted or you get something that looks more like unexpectedly high demand than unexpectedly low supply, you now have an inadequate reserve and a market full of people operating under the impression they would never have to deal with that.
> Second, providing a supply of an essential resource to an essential industry in the event that external supplies are unexpectedly cut off temporarily.
This isn't a different thing from the first thing. There being less supply is what causes the price to go up. But encouraging the market to take all the slack out causes there to be less supply.
The basic problem is this: If the government keeps a moderate reserve, it's going to cause other people to not do that, and then it's going to run out and Cause Problems. If the government keeps an enormous reserve, they're going to cause the price to be higher even when nothing is wrong and burn through a disproportionate amount of tax money doing it.
> Supply shocks are bad.
The correct answer to this is to diversify supply and be ready with substitutes, not government hoarding.
People aren't as stupid as you appear to think. Yes, there are second (and third, forth, ...) order effects. Typically these sorts of systems will settle into an equilibrium. A reasonably competent government agency will account for that where necessary.
It's strange. You object to the government here yet expect private industry to fill the same gap. Why do you believe private industry would navigate these issues better than a government agency would? Given the difference in incentives it doesn't make any sense.
It's a good thing for the regulator to be able to step in at will rather than blindly hope that things go well. Industry is notoriously bad at making short term sacrifices for long term risk management. Would you rather the government force them to maintain their own reserves via regulation?
> This isn't a different thing from the first thing. There being less supply is what causes the price to go up.
No, the two are not at all the same. Rapid price fluctuations are one issue. Essential resources are an entirely separate problem. Volatility and starving to death both involve price movement but are otherwise very different things.
> encouraging the market to take all the slack out causes there to be less supply.
So if the reserve is run by the government it's removing slack and reducing supply, but when run by private industry ... ?
No amount of regular slack is ever going to be able to compensate for a tail risk that blocks the import of an essential good. Take oil for example. No company is ever going to voluntarily warehouse enough to keep the entire US economy going for any significant amount of time. It's a crazy small tail risk and very expensive to counterbalance.
Food is similar. No grocery store or wholesaler or whoever else is going to voluntarily stockpile enough to keep people from starving in the event of widespread crop failure or similarly devastating adverse environmental event.
> If the government keeps an enormous reserve, they're going to cause the price to be higher even when nothing is wrong and burn through a disproportionate amount of tax money doing it.
Why would that be? Filling and emptying shifts demand but doesn't create additional. Anyway you seem to be arguing that private industry should do this for themselves. So whatever the effects are they will be present either way.
Why do you expect disproportionate expenditures? The cost is that of warehousing. The benefit is the entire economy running more smoothly which presumably increases taxes by quite a lot if money is all you're concerned with. It also just generally improves everyone's quality of life which I would hope is the entire purpose for the government to exist when you get down to it.
> You object to the government here yet expect private industry to fill the same gap. Why do you believe private industry would navigate these issues better than a government agency would? Given the difference in incentives it doesn't make any sense.
Profit-seeking actors have the direct incentive to balance risks and rewards. It's popular to hate on speculators, but "build a storage facility so you can buy a commodity when it's cheap and sell whenever the price is high" as a means to make money is actually pretty legitimate. And then they have the right incentives to manage costs and keep realistic inventory levels because they're spending their own money instead of someone else's. Whereas the government's incentive is to give lucrative contracts to cronies or hoard a ridiculous amount of the commodity because they're spending someone else's money and get blamed if there's not enough but not if there's too much.
There is also an advantage in diversity. Government tends to monoculture. How much does the price have to go up before the government starts unloading inventory? How much does the answer depend on politics? Things are better when instead of one essentially monopolist with a massive tank, you have a thousand independent entities with small ones, because then you get a smoother curve with less relationship to the election cycle. And you get different people trying to solve the problem in different ways. Speculators build tanks, entrepreneurs develop recycling systems, buyers make contingencies to use a substitute, but none of that happens if everyone is expecting the government to guarantee the price.
> Industry is notoriously bad at making short term sacrifices for long term risk management.
Middle managers in large bureaucracies are notoriously bad at this, because enormous conglomerates insulated from competition and subject to the principal-agent problem are not subject to a good set of incentives in many ways. It's why we're supposed to have antitrust laws.
Markets as a whole are pretty good at it, because "price goes up when supply is low" is a predictable opportunity to make money.
> Would you rather the government force them to maintain their own reserves via regulation?
The whole point is to stop having the people who don't pay the cost of doing it be the ones who choose how much there should be and what kind.
> Rapid price fluctuations are one issue. Essential resources are an entirely separate problem. Volatility and starving to death both involve price movement but are otherwise very different things.
They're the same problem because the problem in both cases is supply less than demand and then you're left with the same question of how best to contend with that.
Notice also that the government doesn't keep a multi-year supply of food and that doesn't seem to be any kind of a problem.
> So if the reserve is run by the government it's removing slack and reducing supply, but when run by private industry ... ?
When it's run by private industry it costs less, and more to the point costs the people who want the buffer instead of strangers without the bandwidth or domain knowledge to know if what's being done is cost effective or even necessary.
> No amount of regular slack is ever going to be able to compensate for a tail risk that blocks the import of an essential good. Take oil for example. No company is ever going to voluntarily warehouse enough to keep the entire US economy going for any significant amount of time. It's a crazy small tail risk and very expensive to counterbalance.
The US is a net exporter of oil and oil is widely traded global commodity with significant price elasticity of demand, so you don't get actual shortages unless you try something foolish like price controls. Instead people pay $4/gallon instead of $3 which causes the people who drive the most to switch to electric cars or hybrids, other suppliers to increase production, etc.
> Why would that be? Filling and emptying shifts demand but doesn't create additional.
Filling creates additional demand but if you're using a large enough reserve to be at low risk of ever running out then by design the emptying never fully happens.
> Anyway you seem to be arguing that private industry should do this for themselves. So whatever the effects are they will be present either way.
Private industry would size the reserve according to the risk instead of having the incentive to be excessively risk averse because they're spending someone else's money.
> Why do you expect disproportionate expenditures? The cost is that of warehousing.
Suppose you have a reserve which holds X amount and there is an average annual withdrawal and refilling of 0.5X, once every ten years you would use the full X amount, and once every 50 years you would use 5X if you had it.
The 5X reserve requires five times as many tanks and requires you to eat the time value of money on five times as much of the commodity, but only gets used once every 50 years instead of being mostly used every year. It's not worth having; it's better to eat the higher prices that year than to pay even more to prevent them. There are some risks it costs less to buy insurance against than to mitigate. But risk-averse people spending someone else's money will be more inclined to do it anyway, or to build a 10X reserve "just to be sure".
The government also uses government contractors which do not have a good record for cost efficiency.
I've heard it claimed that it was a massive oversight to sell that much helium at such a low price. Helium is a non-renewable resource. When it escapes, it just floats off into space.
And it's an absolutely critical resource for MRIs, advanced science and research, and industry. And we are selling it at a price that's attractive as an amusement for children.
> That strategic helium reserve was from WWI, IIRC.
That may have been when it opened but the current war machine has little use for dirigibles.
> I've heard it claimed that it was a massive oversight to sell that much helium at such a low price. Helium is a non-renewable resource. When it escapes, it just floats off into space.
Helium is produced within the earth by radioactive decay. It then gets trapped in the same pockets as natural gas, which is why it gets extracted along with the natural gas. But most natural gas doesn't undergo helium extraction. If we wanted more, we could do helium extraction on more of the natural gas. Not doing it releases significantly more into the atmosphere than was present in the reserve. But doing it is expensive so we only do it more if there is demand for more helium.
The first mistake was the government hoarding that much of it to begin with. It doesn't make a lot of sense to pay a high cost for extraction in an earlier year and then pay a high cost for storage for an indefinite period of time if you're already discarding (i.e. not separating) most of it and could just extract more once you actually want it.
The second mistake was unloading such a massive amount over a relatively short period of time, because then you crash the short-term price and cause people to waste the thing you spent a lot of money to extract.
What if it's not actually your house, but some unspecified "somebody else's", and you only stand to profit from it? Starts to make sense why some unscrupulous people would go that way, shitty as it is.
So frustrating when every conversation leads to R vs D. Doubly so in this situation since both bills that got us to where we are today had overwhelming BIPARTISAN support and were signed into law by presidents Clinton and Obama…
If individual party members voted against the party line more often there would be less of this kind of discourse. But the reality is that we have a deeply entrenched deeply divided two-party system. There are very few politicians who don't toe one line or the other and endure. But in this case it's a core tenet of the republican party platform to eliminate the administrative state, including strategic investment and reserves.
The Texas A&M sci-fi convention mentioned in the article is coming up in early February. You can bounce over to Cushing library to check out the collection, including a copy of Fahrenheit 451 in an asbestos zipper case (obviously, you can't check that one out of it's special container).
At least put a patron link on there or something, so people can have a legitimate way to pay for the cost associated with running the website. Perhaps make a suggested amount of 10% of the savings.
This gives you a obvious profit motive, and makes you seem more sketchy because you now have more skin in the game to keep it operating as a valid and useful business service
This comment combined with a recent reflection on the ‘irony of automation’ makes me worried that the product I’m building to make life easier will instead lead to loss of craft, pride, and ingenuity.
Honestly, still processing through it to make sure that all the people in my products and systems are seen.
It might sound redundant but I do think there can be an achievable balance. I worked at an organization that was allergic to documentation and safeguards of any kind and relied fully on certain talents to resolve issues. This was not just incredibly inefficient but also caused many problems when some of these people left the company. I think some safeguards and consistent documentation would have avoided the majority of this. And the talented individuals would also have had more time to work on other things, learn new skills and get even better at crafting in a more broad sense instead of only playing fire department.
And finally, I can reassure you that there will always be room for “individuals” and “heroes” to do their craft and also save the day. Most systems don’t run like clockwork, there are always bugs, weird failures, strange oddities, most systems will need saving at some point. So, creativity and craft will generally have a place and value.
It's low pressures that feel suffocating (because there isn't sufficient airflow). High pressure feels great... as a life long asthmatic it's the best I ever breathe.
Sounds like Obama kept the gas taps flowing, instead of locking it up because authorization to sell it had expired. Here is the whole record: https://www.congress.gov/bill/113th-congress/house-bill/527/...
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