Significance of U.S. Bureau of Land Management (BLM)

 

 holbrook-basin-helium-project-5-02-039

FEDERAL HELIUM PROGRAM

  • Historically, helium produced in the US was, in essence, sold to, and stockpiled by, the federal Government
  • Helium produced as a byproduct of natural gas in the Hugoton stored in a reservoir north of Amarillo via a 400 mile pipeline running between Cliffside and Bushton
  • Helium Privatization Act of 1996
  • Currently six crude helium plants and six refineries along BLM pipeline
  • Refineries liquefy helium sold by the BLM, as well as native gas produced by Hugoton Fields
  • Pricing prior to 2015 determined solely based on formula established within HPA to recover govt’s cost of capital for helium program
  • Not a true representation of market value
  • Auction format has recently been implemented for a portion of federal helium sold each year
  • Very little price transparency; minimal value ultimately passed through to producers
  • Capacity of market and low realized value has unsurprisingly have hindered helium development