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The Impact of Selling the Federal Helium Reserve
TABLE 4.2 Estimate of Proved Reserves of Helium in the United States (bscf)
Estimated Proved Reserves
Hugoton-Panhandle complex (except Cliffside)
Native gas at Cliffside
BLM storage at Cliffside
Private storage at Cliffside
Total Hugoton-Panhandle complex
LaBarge field (ExxonMobil)
At current usage of around 4 billion scf (110 million scm) per year, this reserve represents a reserve/production ratio of over 35 years. Several factors, however, could alter the situation. First, although the Hugoton-Panhandle field is rapidly depleting, operators are initiating programs (e.g., compression) to slow field decline. Such efforts could lead to future increases in natural gas production and thus to increased helium reserves. Second, there is evidence that an increasing fraction of Hugoton-Panhandle gas is being processed for helium. Plans for helium processing plant capacity increases on the storage pipeline suggest that this trend will probably continue. Third, there is evidence that natural gas processors in areas other than the Hugoton-Panhandle are becoming more interested in processing natural gas for helium, where feasible. All of these trends could act to increase helium reserves beyond those indicated above.
Future Helium Supply
A reasonable estimate of future production can be developed from the following observations. First, ExxonMobil is currently producing approximately 1 billion scf (28 million scm) per year from LaBarge, with this quantity anticipated to increase to perhaps 1.4 billion scf (39 million scm) per year in the near future. Further production from this facility is constrained by plant capacity, which is not expected to be increased further. However, such rates should be sustainable for the 50-year anticipated lifetime of the production and processing equipment.
Second, production from fields in the Hugoton-Panhandle complex is expected to decline. However, if it is assumed that the gas currently available at Cliffside (private storage plus public storage plus native gas) is eventually made available, then the lifetime of the helium processing facilities would suggest that production at current rates of around 3 billion scf (83 million scm) per year could be sustained for another 25 years.
Third, production from sources other than the Hugoton-Panhandle complex and LaBarge currently amount to only around 0.2 billion scf per year (5.5 million scm). Plants that are anticipated to come on stream in the near future are expected to approximately double this figure. Although this volume of helium would not make production from outside plants a major source, new plants in the longer-term future could make such outside production far more important.