Where Helium Comes From

Where Does Helium Come From?

Helium is a by-product of natural gas found in several large fields around the world. The US is the largest producer of helium supplying 71% of the world’s helium. The two most important sources of helium in the US are the Hugoton-Panhandle field complex, which is located in Texas, Oklahoma, and Kansas, and the ExxonMobil’s LaBarge field, which is located in the Riley Ridge area of southwestern Wyoming. Most production from the Hugoton-Panhandle complex is connected to the Bureau of Land Management (BLM) helium pipeline and Cliffside storage facility near Amarillo, TX, and is the location the largest supply.

Why is the US Such a Large Producer of Helium?

Helium was little known prior to the 20th century. A natural gas exploration well drilled in 1903 near Dexter, Kansas produced a nonflammable gas. Analysis demonstrated that helium comprised ~1% of the natural gas by volume (Nat. Acad. Sciences 2000). Military applications for a lifting gas stimulated a need for helium during World War I. Following the war, the U.S. Navy pursued lighter-than-air flight, and additional helium productions plants were built in Texas. World War II led to a huge increase in helium production, primarily for lifting naval reconnaissance aircraft, as well as for development of nuclear energy. During the Cold War of the 1950-60s, helium was viewed as a strategic resource, and a helium production and storage program was enacted by Congress in 1960 to create a Federal Helium Reserve which resides in the Bush Dome reservoir in the Cliffside Fields near Amarillo, TX. The US government got out of the business of producing helium in the 90’s and turned it over to private companies. These companies collectively produce and store helium at the government owned storage facility and pipeline and pull contractually agreed upon amounts from the pipeline each year.

Why a Price Increase?
The Bureau of Land Management (BLM) has revised its methodology for calculating the price of the crude helium offered during its yearly Open Market Sale.  As a result, Federal Crude Helium will be sold at $75.00 per thousand cubic feet in FY2011 as compared to $64.75 in 2010.  This price covers helium debt repayment and interest and includes administrative and storage costs.

The BLM is responsible for administering the Department of the Interior’s Federal Helium Program following the intent and requirements of the Federal Helium Privatization Act of 1996 (Act). The Act established a minimum pricing for the helium based on a calculation that would retire the program’s total debt to the US Treasury by 2015. BLM has been charging the minimum price established by the Act, a price that represents the cost of the helium not its value on the open market.

The new pricing methodology is in response to recommendations from the recently released National Academy of Sciences (NAS) report, “Selling the Nation’s Helium Reserve”.  The report identified recommendations that serve the US national interests and the interests of US taxpayers. The NAS report suggests that selling crude helium at market price rather than the legislated minimum could, “enable more rapid retirement of BLM facilities debt to the US Treasury – a central goal of the 1996 Act.”

The new pricing methodology is being applied to open market helium sales only. The cost of helium sold for federal purposes will continue to be the minimum allowed by the Act.

The BLM’s Amarillo Field Office oversees the Federal Helium Program. “Our goal is to get a fair price for a scarce government resource” said Leslie Theiss, the Amarillo Field Manager.

What is the Future Outlook For Helium Supply?
The BLM is currently legislated to operate through 2015 with 10-15 years of reserves on hand. The crude helium suppliers that currently feed the pipeline are seeing a reduction in production and there is only one new plant scheduled to come on stream in the US in the next three years. As plants in Qatar, Algeria, and Russia become fully operational they will be expected to supply the growing demand in Asia and the Middle East allowing US exports to slow down. Depending on the pace of growth in the US helium market, the US may become an importer of helium from the new foreign sources previously mentioned.  Until that time, technological research to decrease the need for helium as an input to the production of other goods and services is underway while the science and medical industries look for ways to recapture and recycle helium.

What Can the Balloon Industry Do to Conserve Helium?

Because the balloon industry is unique in that heliunm is strictly used for its ability to lift, recapturing helium is not an option. We must therefore look for other ways to conserve this non-renewable resource. Below are products and solutions that will help in your conservaton efforts. Please consult your balloon distributor to learn more about these products.

  •  60/40 Helium/Air regulators will conserve helium without significantly reducing float times
  •  Ultra Hi-Float used in conjunction with a 60/40 regulator will float an 11″ latex balloon 10+ days
  • Foil balloons made of material specially designed to extend float time will reduce helium and therefore the labor needed to refill them
  • Air-filled balloons in decor will conserve helium use and can be hung or rigged using an efficient ceiling magnet system that requires no ladders or lifts.

*Article source http://ibaonline.net