Federal Helium Reserve faces uncertainty amid global shortage

  • The Federal Helium Reserve circa 1943

    New Mexico Bureau of Land Management
 

While browsing the Bureau of Land Management’s website, I found an odd piece of trivia. True or False: Inhaling helium causes your vocal cords to constrict, raising the pitch of your voice.

I was surprised. What was the agency in charge of overseeing the dry husks of the West's open spaces doing with a colorless, odorless gas used for medical equipment, computer manufacturing, and NASA's rockets? Turns out they’re doing a lot: The BLM manages the Texas panhandle’s Federal Helium Reserve, which supplies a third of the world's helium, and just last week permitted the first ever helium-only well, in eastern Utah.

That well, it turns out, tells a story about the fascinating economics of helium extraction. It’s a story that ranges from Cold War-era paranoia to fracking, from air ships to party balloons. And, most importantly, the well is an indicator that the West is becoming a bigger player in this obscure but important industry, and could be on the verge of a helium boom.

Helium, the second-smallest element, is created by radioactive decay deep within the earth's crust, where it percolates upward and is trapped in certain pockets of natural gas. It first became a coveted resource during World War I, when the federal government needed a reliable supply to keep their airships, critical for national security, afloat. Helium was a safer alternative to flammable hydrogen, and could prevent disasters like the Hindenburg crash. The government set up a facility near Amarillo, Texas, to extract and refine the helium from a deposit of natural gas where it existed in high concentrations. From 1925 until 1960, the facility, operated by the Bureau of Mines, was the only domestic helium producer.

In the 1950s, airships had fallen out of fashion, but demand for helium increased as engineers discovered new applications like arc welding. Soon, researchers began using the noble gas in low-temperature physics experiments considered critical during the Cold War. To protect the strategic resource, in 1960 the feds borrowed $300 million from the U.S. Treasury to create a massive helium stockpile (today's Federal Helium Reserve). The BoM built a spider-like pipeline system to transport crude helium from natural gas wells across the Panhandle region and inject it into the underground pocket. The Reserve was to pay back the loaned money -- the "helium debt" -- by 1985 with proceeds from selling the gas to NASA and the Department of Defense. But the government didn't buy as much helium as it had planned, so the deadline for repayment was extended to 1995.

In the meantime, the Berlin Wall fell, and it no longer made sense to maintain a government stockpile of a Cold War-era resource that could be sold to private companies, where demand was building. The Helium Privatization Act of 1996 ordered the BLM -- which took over the facility from the BoM as that agency was phased out in the '90s -- to sell the stockpile off to private refineries at a rate sufficient to pay down the helium debt, which had ballooned to $1.3 billion. The Reserve is on track to repay its debt as early as a few months from now, and once that happens it will close -- despite still having a significant helium stockpile underground.

But in the years since 1996, demand for helium has exploded, mostly due to its use in computer and other high-tech manufacturing. World-wide supply hasn’t kept up: Helium plants in other countries are having mechanical problems, and a big plant being constructed in southwest Wyoming is behind schedule. The global shortage has caused prices to quadruple since 2000and is causing helium users, ranging from physicists to party balloon dealers, to worry.

Now many in the industry are questioning the wisdom of leaving so much helium underground when the Reserve closes. Politicians are also skeptical of that plan and have proposed a bill to sell the remaining helium stockpile at higher prices, making the government a profit.

You might be wondering: If helium is found with natural gas, and the natural gas industry is booming, how can there be a shortage? It turns out that shale gas, where most of the new drilling is happening, contains virtually no helium. And the glut created by the boom has driven down natural gas prices so much that it's been uneconomical to tap the lower-grade, impure natural gas pockets that do contain helium. But rising helium prices and new technology are now providing incentives for companies to tap wells for helium alone.

Even if the Federal Helium Reserve changes course and continues to sell its stockpile, the West's pockets of helium-rich natural gas are set to become an important part of the global supply. "The majority of helium produced in the United States, in 20 years, will be coming from those Western areas," says Joe Peterson, assistant field manager for helium resources at BLM's Amarillo Field Office.

Another bit of BLM trivia asks: What does helium mean? The answer is "sun." But in terms of the West's future, it could mean new wells and refineries plying the earth for an unexpected noble gas.

Marshall Swearingen is an intern at High Country News.

Photo courtesy Flickr user cizauskas

High Country News Classifieds
  • ARKANSAS RIVER COMMUNITY PRESERVE LAND MANAGEMENT PLANNER
    Central Colorado Conservancy seeks a land management planner to facilitate the creation of a management plan for the Arkansas River Community (ARC) Preserve on a...
  • WATER ADVOCACY MANAGER
    Do you want to help shape the future of groundwater in the Grand Canyon region? The Grand Canyon Trust is hiring its first water advocacy...
  • EXECUTIVE DIRECTOR
    California Coalition for Rural Housing (CCRH) seeks a strategic and visionary Executive Director: View all job details here- https://bit.ly/CCRHED
  • MONTANA BLUES
    The new novel by Ray Ring, retired HCN senior editor, tackles racism in the wild, a story told by a rural White horsewoman and a...
  • DIGITAL ENGAGEMENT SPECIALIST
    Title: Digital Engagement Specialist Location: Salt Lake City Reports to: Communications Director Status, Salary & Benefits: Full-time, Non-Exempt. Salary & Benefits information below. Submission Deadline:...
  • CONSERVATION FIELD ORGANIZER
    Title: Conservation Field Organizer Reports to: Advocacy and Stewardship Director Location: Southwest Colorado Compensation: $45,000 - $50,000 DOE FLSA: Non-Exempt, salaried, termed 24-month Wyss Fellow...
  • UTAH STATE DIRECTOR
    Who We Are: The Nature Conservancy's mission is to protect the lands and waters upon which all life depends. As a science-based organization, we create...
  • EXECUTIVE DIRECTOR
    Apply by Oct 18. Seeking collaborative, hands-on ED to advance our work building community through fresh produce.
  • INDIGENOUS AFFAIRS EDITOR - HIGH COUNTRY NEWS
    High Country News is hiring an Indigenous Affairs Editor to help guide the magazine's journalism and produce stories that are important to Indigenous communities and...
  • STAFF ATTORNEY
    Staff Attorney The role of the Staff Attorney is to bring litigation on behalf of Western Watersheds Project, and at times our allies, in the...
  • ASSISTANT VICE PRESIDENT FOR DIVERSITY AND INCLUSION
    Northern Michigan University seeks an outstanding leader to serve as its next Assistant Vice President for Diversity and Inclusion. With new NMU President Dr. Brock...
  • EXECUTIVE DIRECTOR
    The Clark Fork Coalition seeks an exceptional leader to serve as its Executive Director. This position provides strategic vision and operational management while leading a...
  • GOOD NEIGHBOR AGREEMENT MANAGER
    Help uphold a groundbreaking legal agreement between a powerful mining corporation and the local communities impacted by the platinum and palladium mine in their backyard....
  • EXECUTIVE DIRECTOR
    The Feather River Land Trust (FRLT) is seeking a strategic and dynamic leader to advance our mission to "conserve the lands and waters of the...
  • COLORADO DIRECTOR
    COLORADO DIRECTOR Western Watersheds Project seeks a Colorado Director to continue and expand WWP's campaign to protect and restore public lands and wildlife in Colorado,...
  • ASSISTANT PROFESSOR OF HISTORY - INDIGENOUS HISTORIES OF THE NORTH AMERICAN WEST
    Whitman College seeks applicants for a tenure-track position in Indigenous Histories of the North American West, beginning August 2024, at the rank of Assistant Professor....
  • DAVE AND ME
    Dave and Me, by international racontuer and children's books author Rusty Austin, is a funny, profane and intense collection of short stories, essays, and poems...
  • CHIEF FINANCIAL OFFICER
    Rural Community Assistance Corporation is looking to hire a CFO. For more more information visit: https://www.rcac.org/careers/
  • EXECUTIVE DIRECTOR
    The Absaroka Beartooth Wilderness Foundation (ABWF) seeks a new Executive Director. Founded in 2008, the ABWF is a respected nonprofit whose mission is to support...
  • CANYONLANDS FIELD INSTITUTE
    Field seminars for adults in natural and human history of the northern Colorado Plateau, with lodge and base camp options. Small groups, guest experts.