that, at the time this report was written, demand for refined helium had dropped approximately 10 percent from the peak demand in 2007. However, prices for refined helium have remained substantially at the levels reached in 2007. In the judgment of the committee, the (eventual) recovery of the global economy from the 2008-2009 economic downturn is likely to result in continued growth in foreign demand for refined helium, as well as more growth of foreign supplies of crude helium.
One of the charges to this committee is to determine the reasons for differences between the projected expectations of the 2000 Report and the actual outcomes. That charge is addressed in this section. The 2000 Report concluded as follows:
The price of helium will probably remain stable through at least 2010. The price established by the Helium Privatization Act for sales from the Federal Helium Reserve is approximately 25 percent above the current commercial price for crude helium. For this reason and because all helium refiners on the BLM pipeline have long-term take-or-pay contracts with producers of crude helium, it is highly unlikely that the refining industry will buy and use gas from the Federal Helium Reserve rather than from private stockpiles of cheaper commercial suppliers. (p. 2)
The price of both crude and refined helium did not, however, remain stable through 2010 but rose steadily in the years following the issuance of the 2000 Report, as shown in Figures 1.4 and 1.5. By 2008, private industry crude prices became approximately the same as prices established by the BLM for the crude helium in the Bush Dome Reservoir. This has led to significantly greater withdrawals by refiners on the Helium Pipeline than the 2000 Report anticipated (see Figure 1.6).
The 2000 Report made no attempt to project future demand for refined or crude helium, presumably in part because of the poor quality of data on helium uses collected by the federal government. It also did not discuss foreign demand for helium in any detail, which may have further undermined the accuracy of its predictions of stable demand. As mentioned in the preceding section, one of the main changes in the helium market since 2000 has been a surge in foreign demand for helium, combined with a decline in U.S. demand (see Figures 1.1 and 1.2).
Much of this shift in the relative growth of domestic and foreign demand appears to be linked to the slow growth or reductions in helium consumption in U.S.-based semiconductor and fiberoptic manufacturing. Both of these manufacturing-related uses of helium grew significantly since 2000 in Asia, reflecting the expansion of production of fiberoptic cable and semiconductors within the region. Asian demand is projected to grow faster than U.S. or European demand (see Figure 1.1).
Commerce Department data indicate that U.S. domestic consumption of