Figure 4.1 shows the helium sales data for the past 20 years along with curves depicting -1 percent, 0 percent, 1 percent, 3 percent, and 5 percent annual growth in helium sales.2 Although helium sales more than doubled between 1985 and 1995, the rate of increase has varied and appears to be declining. Thus, although helium consumption will probably continue to rise in the short term, it may flatten out at a level close to the current level or even decline.
For the purposes of this exercise, the committee assumed that no new sources of helium would be discovered. The solid curve in Figure 4.2a depicts this worst-case scenario of helium production vs. time based on current production trends and capacity. The peak in this curve is due to the increase in helium production at LaBarge. The overall decline in helium production is due to the depletion of the fields connected to the Hugoton-Panhandle complex. The other lines in the figure reproduce the consumption scenarios depicted in Figure 4.1.
Figure 4.2b indicates the total amount of helium in the reserve facility (top curves) and the amount of helium in the privately owned reserve (bottom curves), assuming the supply and demand scenarios shown in Figure 4.2a. If helium demand remains constant at the 1998 level, the curves indicate that there will be a net storage of helium until about 2004. At that time, helium suppliers will begin to draw down their private stores, which will be exhausted in about 2015. If helium use increases at 1 percent, 3 percent, or 5 percent per year, the private reserves will be exhausted in about 2010, 2007, or 2005 respectively. If helium use decreases at 1 percent per year, the private reserves will not be exhausted until after 2020. If the amount of helium available is greater than the worst-case estimate used in these scenarios, the private reserve will be exhausted even later.
In scenarios where helium consumption grows less than 3 percent per year, the amount of helium private industry will need to purchase from the government to meet demand will be less than the amount the Department of the Interior is required to offer for sale. In some scenarios the difference is substantial, and it is even larger if more helium becomes available than the committee had assumed.
One might well wonder what additional volumes of helium would become available if more helium-bearing natural gas is discovered. To address this issue, several things need to be taken into consideration. First, the U.S. helium-supply commercial industry is still young, having existed only since about 1960. Second, the industry has primarily been based on sources that were discovered and exploited for other gases (i.e., the Hugoton-Panhandle and LaBarge gas fields). Although helium may play a role in gas field development decisions, companies do not specifically target exploration for helium because its economic status is that of a minor byproduct. As a result, the geological characteristics and processes that form helium-rich gas deposits are not well known, making deliberate exploration for helium difficult. Natural gas producers and operators of natural gas processing plants are becoming increasingly aware of the economic rewards of helium extraction, however. BLM conservation and storage programs have played a large role in getting this industry going and in stimulating interest in extraction. As future uses of helium grow, the awareness of helium extraction is likely to grow, perhaps resulting in a larger percentage of helium being extracted from available natural gas streams or even in deliberate exploration for new sources of helium.
It is estimated that the total U.S. potential resource base of natural gas is an additional 1,100 to 1,900 trillion scf (31 to 53 trillion scm) over the proved reserve base (as of December 31, 1993). With this potential available in the United States, exploration for natural gas is likely to continue for a very long time. As stated above, the reserves/production ratio for U.S. helium is over 35