In addition to the reservoir, the facility possesses roughly 450 mi (720 km) of pipeline and associated surface facilities. The pipeline stretches through Kansas, Oklahoma, and Texas and connects 17 private crude-helium production and refining plants to the federal reservoir. These plants are primarily extracting gas from the Hugoton-Panhandle gas field complex. The operating companies regularly deposit and extract their supplies of crude helium to and from the reserve for either storage or final purification and sale, respectively. These companies are assessed fixed charges for contract administration and connections to the government pipeline. In addition, they are assessed variable charges based on their crude helium activity. The rates for the fixed and variable charges assessed private industry for the storage of helium at the Cliffside facility are calculated to exactly offset the operating expenses of the facility.

Fourteen private companies owned a total of 20 plants in 1996. Of those plants, 13 engaged in helium extraction, 11 (with some duplications) in purification, and 8 also liquefied helium. Approximately 2.8 billion scf (78 million scm) of helium were produced from the Hugoton-Panhandle complex in 1996, 2.2 billion scf (61 million scm) of which was sold and 0.6 billion scf (17 million scm) of which was stored in the Bush Dome reservoir.

ExxonMobil's Shute Creek processing plant in the Rocky Mountain region produced approximately 1.0 billion scf (28 million scm) from the LaBarge field, with an additional 0.2 billion scf (5.5 million scm) coming from other facilities in Colorado and Utah. The Rocky Mountain gas fields do not enjoy access to the helium pipeline, so they cannot store crude gas.

The private refiners in the Hugoton-Panhandle complex that are on the federal pipeline rely on the Cliffside facility to act as a flywheel. Natural gas extraction companies generally sell crude helium to helium refiners on the basis of long-term (e.g., 20-year) take-or-pay contracts, which stipulate that the refiners must buy a negotiated quantity of helium per year from natural-gas producers for an extended period of time regardless of whether they store it, refine it, or vent it. The refiners with access to the pipeline store all of their crude helium in the Cliffside facility and remove and refine it as necessary. Any crude helium in excess of current market demand will thus remain in the Cliffside facility and become part of the company's private stockpile. The amount of helium ultimately produced from the Hugoton-Panhandle complex would certainly be less if the Cliffside facility were not available.

Helium is also produced in small quantities outside the United States. Although there is currently some helium production in Russia and Poland and small amounts in China and some African countries, the most significant helium production outside the United States is currently in Algeria. Although the helium content of the native gas produced at the Algerian facility is only 0.17 percent, economics are favorable since the gas is being liquefied to LNG for shipping, resulting in a stream more highly concentrated in helium. Algerian helium principally enters the European market.

Evaluating U.S. helium reserves and resources is the responsibility of BLM. BLM has constructed a 19,000-sample database of helium concentrations, with much of the measurement having been done at its own laboratory in Amarillo. It also uses data from a variety of sources for its analyses, including Potential Gas Committee reports (see, for example, Colorado School of Mines, 1995) and data from private producers of helium-rich natural gas.

BLM categorizes helium reserves using a U.S. Geological Survey classification system that considers both physical uncertainty and economic viability (see Box OV.1). This nonstandard terminology makes it difficult to understand how much helium is potentially available. The classification scheme used by the natural gas industry is clearer, and all new helium resources are coming from that industry.

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