Thermodynamics Laboratory, Berkeley, Calif.-Precise measurements are made of the thermodynamic properties and constants of substances used in metallurgical, chemical, and ceramic technologies. The possibility of metallurgical or chemical reactions in steps or series of steps constituting processes under development by the Bureau may be illustrated by use of available thermodynamic data. Research Laboratory, Rapid City, S. Dak.-Work performed consists of metallurgical research on recovery or beryllium from ores, research on methods of recovering lithium mineral concentrates of commercial quality from pegmatite ores, and development of improved techniques for economic extraction of mica and feldspar from pegmatite deposits. GENERAL ADMINISTRATION Chairman HAYDEN. At this point the record will include the justifications for the 1962 budget estimate for "General administration." Two thousand dollars was taken out of your $1,292,000 estimate, again the reduction being charged to Pay Act costs. The committee has your appeal for restoration of this $2,000. (The justification referred to follows:) Pay costs: To provide for increased pay costs on a full-year basis___ +2,000 The estimate for this activity for fiscal year 1962 is $1,292,000, an increase of $2,000 over the operating base. The increase is to cover additional costs, on a full-year basis, of classified pay increases granted under Public Law 86-568. Plan of work. This appropriation provides for the expenses of the immediate Office of the Director, Deputy Director and the Division of Administration in the Washington office, except for certain services performed for field activities of the Health and Safety and Anthracite Coal Divisions. The five regional offices of the Bureau also are financed from this fund to the extent necessary to cover the salaries and expenses of the regional director and his key administrative staff. All other expenses generally classified as administrative, required to carry on the activities of the technical research staffs, will be charged to program funds. For this purpose, the services involved in the work of the Bureau in the fields of finance, property management, procurement, and personnel will be considered administrative. The Office of the Director provides executive direction in conducting programs designed to promote the conservation and development of mineral resources; to promote safety and healthful working conditions in the mineral industries; and to disseminate information concerning these subjects in such manner as will best carry out the purposes of the Bureau's organic law. Regional directors in five decentralized offices are direct representatives of the Director in their respective regions and are responsible to him for mineral resources programs, personnel, property, and control of funds allotted to the regions. The Division of Administration provides advisory staff assistance to the Director and is responsible for administrative management within the Bureau. Services are provided in finance, personnel, property management and control, records management, distribution of publications, and employee health and safety programs. The Bureau's proposed 1962 administrative program totals $3,132,000, of which $1,292,000 is requested under the general administrative expenses appropriation. A comparison of the program follows: This appropriation finances certain administrative services in the Washington office and five regional offices incident to the prosecution of the programs within the Bureau's responsibilities. For this purpose, the services involved are: Formulation of Bureau policies; prescribing of procedures; finance, property management, procurement, and personnel functions; and the overall executive direction and coordination of the various programs of the Bureau. It is felt that the following achievements are worthy of note: A formal evaluation of personnel functions in region I was conducted by representatives of the Washington personnel office. A retirement attrition study, projected through 1968, was completed during the year. This study will assist materially in forecasting future manpower requirements. Training and orientation sessions were held on the following subjects during the year: A survey of all administrative services of the Bureau is now being made to determine service requirements of technical operations under the realinement of functions approved as of July 1, 1960. A study relating to the Bureau's transportation and traffic management procedures is in process. All Government bills of lading will be reviewed to ascer tain whether shipments are made by cheapest and best method. Chairman HAYDEN. Can't you pinch out the $2,000? Mr. ANKENY. Certainly it would be foolish for me to say we could not, but we have appealed all of these reductions concerned with the pay act increases because the overall effect is one of curtailing important programs. Chairman HAYDEN. The record will receive the statement contained in the justification under the heading "Development and operation of helium properties." This is a request for authority for the Secretary of the Interior to borrow $15 million from the U.S. Treasury to carry out the requirements of the 1960 Helium Amendments Act. A $60 million limitation during any 1 fiscal year is requested on the amount of payments which may be made. The House of Representatives reduced these requests to $10 million and $35 million respectively. Will you please comment on the effect on your operations of these reductions? (The justification referred to follows:) Page 20, line 10, strike out "$35,000,000" and insert in lieu thereof "$60,000,000", the estimate, or an increase of $25,000,000 in payment authority. HOUSE REPORT "This is a new appropriation item to implement the Helium Act amendments, approved September 13, 1960, to provide for the conservation of helium now going to fuel markets as noncombustible component of some natural gases from the southwestern part of the United States. Under the program private industry is being encouraged to finance, construct, and and operate up to 12 plants for the production of helium which will be purchased by the Government under long-term contracts. The helium so acquired will be stored in the Government-owned Cliffside gasfield near Amarillo, Tex., until needed to meet demands. "The Helium Act amendments made provision for two types of financial controls to be carried in the appropriation acts implementing the program: (1) The establishment of a limitation on the amount of annual payments that the Government shall be obligated to make under the contracts and agreements executed for the purchase of helium, and (2) the authorization of the amount that may be borrowed from the Treasury to finance payments under the contracts and for other expenses. It is estimated that during the first 7 or 8 years of the program that total borrowings of $255 million will be required until such time as income from helium sales are adequate to maintain the program. "The budget recommended that the maximum annual payments under the contracts be limited to $60 million and requested this full amount beginning with fiscal year 1962. As the Department is just beginning its contract negotiations with an initial group of four firms, it does not appear that it will be in a position to execute more than about four contracts during the next fiscal year with an estimated total maximum annual expenditure for helium purchases of $35 million. The committee has therefore established this latter amount as the initial limitation on the amount of annual payments that the Government shall be obligated to make under the contracts in lieu of the $60 million requested. "In reference to the borrowing authority, the budget requested a supplemental of $12 million for the current fiscal year (on which no action was taken by Congress) and $15 million for fiscal year 1962. It now appears that the earliest date on which the first group of new plants could be completed is October 1962. Therefore, the Department will have very little, if any, fund requirement for helium purchases during fiscal year 1962. However, the committee has provided a borrowing authorization of $10 million, which together with the $5 million estimated to be available in the current helium fund, will make a total of $15 million available to the Department. "The committee strongly supports this long-range program for the conservation of helium because of its essentiality to nuclear, defense, and space programs. However, it does not feel it is necessary to provide the full borrowing authorization of $255 million, or to authorize the maximum annual expenditure of $60 million under the contracts until such time as the program is fully underway and such authorities are needed. Should the program develop more rapidly than is now anticipated, the committee will give consideration to any supplemental request that might become necessary." JUSTIFICATION The amendment restores the reduction of $25 million made by the House in the budget estimate for payments to be made under contracts to be entered into in carrying out the helium production program authorized by the Helium Act Amendments of 1960. The Appropriations Committee expressed strong support for the long-range helium conservation program because of the essentiality of helium to nuclear, defense, and space programs. Therefore, the reduction in the annual payment authority from $60 to $35 million does not appear to reflect a desire on the part of the committee to reduce the contemplated scope of the program. Instead, the reduction was made because, in the committee's opinion, *** it does not appear that it (the Department) will be in a position to execute more than about four contracts during the next fiscal year with an estimated total maximum annual expenditure for helium purchases of $35 million." The Bureau of Mines is convinced that contracts to utilize the full amount of the requested $60 million annual payment authority can be negotiated before the end of fiscal year 1962. The Bureau of Mines has worked closely with industry thoughout the development of the helium conservation program-and especially since the Helium Act amendments of 1960 were enacted into law in September 1960. The tentative contract drafts have been exhanged with several interested companies, anticipating that the evolution of contract language would be time consuming. Substantial agreement has been reached on the form and context of contracts that would be acceptable to both parties in implementing the program. The Government and the interested companies share a mutual interest in completing the contracts as quickly as possible. Under the circumstances, the Bureau of Mines believes that contracts can be made to fully utilize the $60 million payment authority well in advance of the end of fiscal year 1962. In any event, restoration of the full $60 million payment authority would enable the Bureau of Mines to move ahead with the complete program as rapidly as possible to achieve the desired helium conservation objectives. Otherwise, the $35 million limitation would impose an effective brake on the progress of the program, with the Bureau of Mines being authorized to move only part way toward the ultimate objectives while awaiting further consideration by the Congress. If it should be the intent of the committee to reduce the scope of the program or to provide a brake upon its implementation, the foregoing justification would of course, be inapplicable. As stated previously, such an intent is not indicated in the committee report. If this is the reason for the reduction, the Bureau of Mines would strongly urge the committee to reconsider the urgent need for fully implementing an effective long-range helium conservation program in the light of the growing importance and essentiality of helium at the same time that our natural helium resources are being rapidly and needlessly depleted without serving any useful purpose. The Bureau of Mines is not appealing the reduction from $15 to $10 million in the initial borrowing authority for the program. It does not now appear likely, on the basis of negotiations with private companies, that it will become necessary for the Bureau of Mines to build another Government helium plant, Consequently, the borrowing authority recommended by the committee is believed to be adequate. NEGOTIATION OF CONTRACTS Mr. ANKENY. I have with me Henry Wheeler, Assistant Director for Helium, for the Bureau of Mines, and I would like to ask him to comment. Mr. WHEELER. The House committee in reporting on this, we believe, endorsed the full helium program which calls for the expenditure of up to $60 million in any 1 year for the purchase of helium. The point that was raised by the committee was whether or not we could negotiate enough contracts in fiscal year 1962 to fully utilize the $60 million. I think everyone I have talked to has recognized the importance of the program. It is vital to our defense, space, and atomic energy programs; and if we continue to let the helium get away from us, we simply will not have it available to us when we need it in the future. Chairman HAYDEN. Everyone agrees with that. Mr. WHEELER. Unless someone desires, I will not comment on the need for the helium program. I will be glad to do that if someone wishes. I think the point here is whether or not we can negotiate the contracts in fiscal year 1962. We are presently talking with four companies that we have selected for initial negotiations under the program, and we have every hope of completing the negotiations for the first four contracts before fiscal year 1962 starts. Of course, the contracts cannot be signed until the money becomes available, but the negotiations will be substantially completed. This means that we will have all of fiscal year 1962 available to complete our negotiations for contracts up to the $60 million limitation. |