APS News

Trial Balloon on Helium Purchasing Plan Launched

By Michael Lucibella

APS is partnering with the American Chemical Society (ACS) and the U.S. Department of Defense (DoD) procurement agency to secure lower helium prices for researchers. The three groups are working on setting up a group-purchasing plan for scientists with federal grants so scientists can pool their market influence.

“Academic users don’t have any real purchasing power when it comes to liquid helium,” said Mark Elsesser, a policy analyst at APS. “The idea is to pool the academic users... and have an agency broker the helium on their behalf.”

Helium is an important component in many experiments, and in liquid form is often used to chill experiments to near absolute zero temperatures. However, recent federal action will cause helium prices to climb significantly. To help protect scientists at small labs, APS and ACS are partnering with the Defense Logistics Agency (DLA), the organization that procures weapons, repair parts, and other supplies for DoD.

“It turns out that they have the rights and abilities to procure supplies for anybody with a federal contract,” Elsesser said.

DLA already buys enough helium for DoD to compete with industry in negotiating low helium prices. Once the full program is up and running, scientists with a federal contract or grant can sign up to buy helium from DLA for lower rates than would be otherwise available to them on their own.

Altogether, scientists use only about two to three percent of the helium consumed in the United States annually, while most of it goes for industrial manufacturing and MRI machines. Big scientific institutions like Fermilab or Brookhaven have the large purchasing power to negotiate competitive rates from helium suppliers, but smaller institutions don’t wield the same influence.

“The people who are most vulnerable are the bench-top scientists who have one or two helium cryostats,” said Moses Chan, a low-temperature researcher at Penn State University. “Those are the people who sometimes have to pay the very, very high prices.”

The consortium is in the process of organizing a small yearlong pilot program with DLA that is likely to include about 10 to 15 academic groups. The idea is to get a diverse lineup of users to see which researchers DLA can best serve.

“It’s going to be a new program, a new trial, so there could be some growing pains,” Elsesser said. “The program is not going to be for everybody.”

The Bureau of Land Management (BLM), which oversees the US helium reserve, has supplied 40 percent of domestic helium for years. Because of legislation passed in 1996, it has been selling its supply at below-market rates, which helped cause a helium shortage over the last couple of years.

Legislation passed last year allowed BLM to sell its supply at rates in line with the market. This helped correct many of the shortages, but over the long term, helium costs will continue to rise.

The group-purchasing program would complement the existing program that lets federally funded scientists buy discounted helium from commercial suppliers that buy from BLM. Scientists in the program complained about the paperwork involved, and also said that deliveries were sometimes unreliable and that costs kept creeping higher. The new group-purchasing program is meant to open up another avenue for federally funded researchers to buy discounted helium, one with more stringent supply line and cost controls.

The consortium is just beginning its search for users, and hopes to have groups chosen for the pilot program by the beginning of next year, with shipments starting a few months after that. If all goes well, the full program should come online sometime in 2016.

Elsesser is accepting applications from those interested in participating in the pilot program until September 12 and plans to select the initial group by October. If all goes according to plan, the first helium deliveries from DLA should begin in May of next year.

Researchers interested in applying to participate in the program should contact Mark Elsesser (elsesser@aps.org). More details can be found on the program’s website.

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Editor: David Voss
Staff Science Writer: Michael Lucibella
Art Director and Special Publications Manager: Kerry G. Johnson
Publication Designer and Production: Nancy Bennett-Karasik