BLM implemented several of the recommendations of the 2000 Report. It engaged a Denver-based company that specializes in reservoir evaluations, NITEC LLC, to assess its operation of the Bush Dome Reservoir. Around the same time, BLM negotiated and entered into a partnership with the four companies then owning helium refining facilities on the Helium Pipeline. The partnership, Cliffside Refiners LP, had as its principal objective the design, purchase, and installation of equipment to enrich and compress the crude helium in the Bush Dome Reservoir so that the helium could meet specifications required by the refining facilities.

As noted in the 2000 Report, the prices charged for privately owned crude helium immediately following enactment of the 1996 Act were significantly below the prices to be charged by BLM. However, during the years following enactment of the 1996 Act, at which point the price at which BLM would be selling significant amounts of federally owned helium had been established, the prices between private parties for crude helium began to rise, either under individual contract provisions that allowed for periodic negotiations of price openers or under conditions where contract expirations required renegotiation of the contract terms. In establishing crude helium prices, the private sector, both entities connected to the Helium Pipeline and those not connected, used the BLM crude price as a benchmark, particularly during the helium shortages of 2006 to 2007. The prices at which privately owned crude helium sold have increased accordingly such that at the time of this report they were, on average, at least equal to the BLM crude price and as much as 10 percent above that level. Many if not all of the contract adjustments also include escalation terms that maintain the premium over BLM set in the adjusted price terms of the renegotiated crude contracts (see Figure 1.4).11

As would be expected with such increases in crude helium prices, the price reported by BLM for standard retail (or Grade A) helium has also increased, more than doubling from 2002 through 2008 (see Figure 1.5).12

In 2008, the global economy underwent a significant slowdown. One consequence was that the demand for helium, principally in the industrial markets, dropped significantly. The best estimate available to members of the committee is


As mentioned earlier in this section and discussed in more detail in Chapter 5, crude helium prices are not publicly available. This assessment of the relative price levels of privately and BLM-sold helium is based upon the knowledge of members of the committee.


As part of its collection and reporting of data on the helium market, BLM annually reports the price of Grade A helium. According to information provided by BLM after the prepublication version of this report was released and as this report was being finalized, these reported prices are estimates, rather than a representative sampling. Further, retail prices for helium vary widely, given the range of costs associated with delivering helium to particular end users. However, the retail helium price increases reported by BLM are consistent with representative price increases obtained by committee members by sampling of scientific users of helium.

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