The Impact of Selling the Federal Helium Reserve (2000) / Chapter Skim
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6 Impact of the Implementation of the Helium Privatization Act
6 Impact of the Implementation of the Helium Privatization Act
Pages 55-60
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From page 55... ...
All helium refiners on the BLM pipeline have long-term take-or-pay contracts that require them to buy a negotiated quantity of helium from natural gas producers each year, regardless of whether they store it, refine it, or vent it. Because of these long-term contracts, it is highly unlikely that the refining industry will buy and use gas from the Federal Helium Reserve rather than from private stockpiles or cheaper commercial suppliers.
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From page 56... ...
As the HugotonPanhandle gas fields are depleted and the Federal Helium Reserve is exploited, the price of crude helium will rise to the congressionally mandated price. A large portion of the price of refined helium comes from the cost of purifying and transporting the pure gas, however, so a rise of 25 percent in the price of crude helium would probably increase the price of pure helium by only ~ to 10 percent, which is not likely to have a dramatic impact on helium users.
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From page 57... ...
Enacting legislation to reduce the price of crude helium below commercial levels or to sell it in lots at auction could seriously destabilize the helium market by increasing the probability that a single company or individual will purchase all or most of the helium in the reserve, thus creating a helium refining monopoly; · The total supply of helium produced from wells would diminish if part of the reserve were sold before it was needed to meet the demand for helium. Under such circumstances, suppliers whose principal economic interest is methane would continue that production, forgoing the desirable conservation and storage options currently available.
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From page 58... ...
The addition of new low-cost sources of helium would serve to extend the life of the Federal Helium Reserve and provide more time to find additional sources and develop technological alternatives. The Helium Privatization Act of 1996 mandates that its impact should be reassessed in 2015.
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From page 59... ...
· Report helium reserves using the natural gas industry's classification scheme. The Helium Privatization Act of 1996 stipulates that the Federal Helium Reserve eventually stabilize at 0.6 billion scf (17 million scary)
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From page 60... ...
Identify potential sites for natural storage facilities to permit the establishment of new facilities near future major helium producers and to allow an increase in the storage and conservation capabilities of helium users.
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