Several significant uncertainties and challenges remain for BLM’s management of the Bush Dome Reservoir, according to information presented by NITEC (Weinstein, 2003, 2008). The accuracy of the reservoir description that is the basis for the NITEC model is uncertain. Because only older seismic and geophysical log data were available, NITEC had to at first base critical parts of its reservoir description on matches of observed pressures and helium concentrations in producing wells. Now, however, NITEC has obtained an equally good alternative match and associated reservoir description in which the distribution of helium in the reservoir differs substantially from that in the earlier reservoir description. Thus, predictions using the model are uncertain, and the uncertainties will only increase as the amount of helium remaining in the reservoir diminishes. These uncertainties are compounded by not knowing the degree of vertical conductivity of fluids within the reservoir. Does helium injected in lower parts of the reservoir rise toward the top or does it remain in the reservoir layers near the point where it was injected?

There are additional possibilities that might be considered for increasing the production capacity of the reservoir not proposed by NITEC. For example, horizontal wells might be able to increase production (and injection) capacity substantially at any given pressure difference between the surface and the reservoir. Fewer horizontal wells, placed strategically, could be a better alternative from the standpoint of both economics and dependable spare capacity in the Bush Dome Reservoir. Nor do NITEC’s proposals provide any spare capacity, which could be needed if old wells in the field have mechanical problems, if water influx increases and causes productivity problems, or if the forecasts are simply overoptimistic because of incorrect details in the reservoir description.

STRAIGHT-LINE EXTRACTION MANDATE FOR BUSH DOME CRUDE HELIUM

This section evaluates the consequences, from a resource-management perspective, of the mandate in the 1996 Act that substantially all of the helium in the Federal Helium Reserve must be sold off on a straight-line basis by 2015. This is not a realistic production plan, because it is not feasible to continue to add wells and/or compression to the field. Reservoir pressure is declining, and maintaining a straight-line drawdown will become increasingly cost-prohibitive and, eventually, physically impossible. This can be seen from the reservoir simulations that have been done on the field (see, for example, Figures 5.5 and 5.6). Additionally, the aggressive production strategy could degrade reservoir properties, making it even more difficult to follow the strategy (Weinstein, 2008).

Best practices for economically efficient resource extraction (Chermak et al., 1999) include extraction rates that vary, usually declining over the economic life of a deposit. This approach avoids unnecessary pollution of the deposit by other



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