January 18, 2007
Contact: Hans Stuart, New Mexico BLM, 505-438-7510

Demand is Ballooning

Where Has All the Helium Gone?

  

By Leslie Theiss, Manager, BLM Amarillo (TX) Field Office

 

The Bureau of Land Management (BLM) is a major supplier of crude helium to refiners in the United States, who market and sell pure helium throughout the world.  Managing the nation’s "federal helium reserve" was a quiet federal program until 2006 when temporary shortages made news around the world.

For 350 days last year, the BLM’s crude helium enrichment facility was operating at full capacity, supplying more than 6 million cubic feet a day or 2.1 billion cubic feet per year.

 

As demand for helium is rising, supplies of crude helium are tightening.  Our agency’s role in helping meet the demand by refiners is expanding even though ‘our’ crude is sold at a Congressionally mandated price that is higher than most private sources of crude. 

 

We knew helium hit the big time last fall when Jay Leno included a joke in his monologue that went something like this:

 

The American Helium Association announced there’s a shortage of helium until December. In fact there might not be enough helium for the Macy’s Thanksgiving Day Parade. When asked why there was shortage they responded by saying (in a high pitched voice) “We have no idea.”

 

[BLM disclaimer: Inhaling helium is not a good idea.  Because helium is less dense than air, inhaling it creates the potential for collapsed lungs.  Really.]

 

Besides its use in party balloons, helium is essential for things that require its unique properties – its inertness, its incredibly low "boiling point" and its high thermal conductivity.  Helium is used to pressurize liquid propellants used by the space shuttle and in the semiconductor/computer chip manufacturing process.  Liquid helium is used to cool magnets used in MRI (Magnetic Resonance Imaging) equipment.

 

Sounds boring until you need it.

 

Helium was pretty much unknown before the twentieth century.  It was first discovered in natural gas in 1903 when an exploratory well in Kansas produced a gas that "refused" to burn. The only economical source of helium is from natural gas, and some of the richest sources are under the Panhandle of Texas. 
Photo of BLM's Crude Helium Enrichment Plant
BLM's Crude Helium Enrichment Facility near Amarillo, Texas. The facility provides crude helium to refiners that suply about about 40% of U.S. helium production.

 

A federal helium program was created in 1925 to ensure that the gas would be available to the government for defense needs. Over time, it evolved into a program to supply the government with refined helium for research and aerospace uses. 

By the 1990s, the demand for helium by the private sector was ballooning and far surpassed government needs.  Congress decided that the feds didn’t need to be in the business of supplying refined helium to U.S. users.  

The Helium Privatization Act of 1996 redefined the program’s mission as operating a crude helium storage reservoir and pipeline system, and providing crude helium (enriched to about 80 percent helium) to private refiners.

So why is the United States facing supply disruptions and temporary shortages?

 

The short answer is that demand is up and several overseas helium plants that were expected to be up and running in 2006 were delayed and down.  Throw in things like the New Year’s storm in Kansas and Oklahoma that damaged power lines to two major refiners, and scheduled plant maintenance at other U.S. helium facilities, and Houston, we have a problem.

 

So what about the BLM – are we holding up our end of the bargain?

 

Our Cliffside Gas Field, 15 miles northwest of Amarillo, serves as the government’s reserve for helium.  The field and BLM’s helium enrichment plant supply crude helium used in about 40 percent of U.S. helium production – and almost 35 percent of the world’s helium production. 

 

The BLM is selling and delivering more helium than ever before but supplies remain tight.  We took our helium enrichment plant down for several days last summer when a compressor failed, and 10 days for annual plant maintenance in November, temporarily reducing deliveries of crude helium to refiners on the pipeline.   BLM also had to reduce deliveries of crude helium during the week of January 15, 2007, when its plant experienced an unexpected shut down due to severe weather.

 

However, for 350 days last year, the BLM’s crude helium enrichment facility was operating at full capacity, supplying more than 6 million cubic feet a day or 2.1 billion cubic feet per year.  We can’t increase production because this would result in adverse impacts to the gas field, wells, compressors and other equipment.

 

The amount of helium offered for sale by the BLM to private industry over the past four years was 2.1 billion cubic feet (bcf) each year.  The amount of helium purchased ranged from 0.7 bcf in 2004 to 1.6 bcf in 2006.  The BLM delivers crude helium to refiners along the Helium Conservation Pipeline; deliveries ranged from 1.3 bcf in 2003 to 2.1 bcf in 2006 (including reserves from previous years).

 

The bottom line in terms of helium supply is that there is very little excess helium refining capacity, and domestic supplies of crude helium are growing ever tighter.  Until overseas plants are fully online and/or additional plants are built, we’re potentially facing additional supply disruptions, if not shortages.  

 

The Bureau of Land Management is committed to providing its share of crude helium to the marketplace, and will continue to do so.  


 

More information about helium:

 

BLM Federal Helium Program--Includes Frequently Asked Questions, Maps, and legislation

 

BLM Amarillo Field Office--Includes storage and pipeline information and sales statistics.

 

Plants and Pipelines--Map of Kansas, Oklahoma, and Texas showing fields and facilities.