those years. It is expected that under the current drawdown schedule for the Bush Dome Reservoir and with the depletion of several of the domestic helium sources, the United States will become a net importer of helium in the near future.

Several other points are important as well. The slight surplus in refining capacity from 2005 to 2007 did not allow supply to keep up with actual demand, as a surplus in capacity of at least 10 percent is normally needed to accommodate seasonal and month-to-month fluctuations in demand. During the last half of 2008, U.S. and worldwide demand began to slip against a relatively flat supply, so that there was a surplus of at least 10 percent of demand, permitting a much more reliable supply.

By 2012, after planned refining facilities come online, foreign capacity is expected to be able to supply virtually all of foreign demand, at least when based on annualized capacity. Should world demand continue to grow as forecast beyond 2016, world capacity would have to increase faster than current expectations. If it fails to do so, the price of helium will increase, which would probably constrain demand, jeopardizing the world’s helium demand/supply balance as in 2005 through 2007. This is where additional capacity in Algeria, Qatar, and the Russian Far East could come into play.

AN ALTERNATIVE ROLE FOR THE FEDERAL HELIUM RESERVE

As shown in Figure 4.5, reductions in world demand for the next several years as a result of the economic downturn and the start-up of helium extraction and refining facilities thereafter will result in substantial excesses in helium production capacity through approximately 2015 (Case A). This would be an opportunity for the Federal Helium Reserve to depart from its current role as the source of first resort for crude helium and take on a new role as a source of last resort, thereby allowing BLM to provide helium for domestic use for a significantly longer time than is currently projected.

As a source of last resort, helium would be drawn from the Federal Helium Reserve only to make up for shortfalls in all other supply sources (Figure 4.6, blue). Note that in this scenario, called Case B, very little federally owned crude helium would be required to meet world demand from 2012 to 2017.

As shown in Figure 4.7, the net effect of reducing BLM withdrawal rates under this alternative model would be to greatly increase the amount of federally owned helium at critical points in the supply and demand forecasts to 2020, allowing BLM to better provide for the long-term helium needs of the United States.



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