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The Impact of Selling the Federal Helium Reserve
FIGURE 2.1 The storage facility at Cliffside gas field (courtesy of the Bureau of Land Management).
In addition to the reservoir, the facility possesses roughly 450 mi (720 km) of pipeline and associated hardware. The pipeline stretches through Kansas, Oklahoma, and Texas and connects 17 private crude helium production and refining plants to the federal reservoir (Figure 2.2). Many of these plants are extracting gas from the Hugoton gas field. The operating companies regularly deposit and extract their own supplies of crude helium to and from the reserve for either storage or final purification and sale, respectively. They are assessed fixed charges for contract administration and connections to the government pipeline. In addition, a company pays variable charges based on its crude helium activity.
It is important to stress three things about the Bush Dome reservoir. First, it is a unique facility. The long-term storage of crude helium would be very difficult without such a facility, and the long-term storage of both gaseous and liquefied refined helium is currently not feasible. The Bush Dome reservoir could be adapted for the storage of crude helium because of its recognized ability to contain natural gas with relatively high helium concentrations (about 1.86 percent). There is no comparable storage facility for helium anywhere else in the world. This is important, because other storage facilities will be required as the Hugoton gas field is drawn down and other fields become the primary sources of helium.