More helium is on the way | July 24, 2017 Issue - Vol. 95 Issue 30 | Chemical & Engineering News
Volume 95 Issue 30 | pp. 22-23 | Latest News
Web Date: July 19, 2017

More helium is on the way

Entrepreneurs forge ahead with new, on-purpose wells, but they need Congress to clarify lease terms
Department: Business
Keywords: analytical chemistry, helium, scientific instruments, shortages
[+]Enlarge
IACX started producing on-purpose helium in 2013 at the Harley Dome field in Utah.
Credit: IACX
Helium separation and storage units surrounded by a chain link fence.
 
IACX started producing on-purpose helium in 2013 at the Harley Dome field in Utah.
Credit: IACX

Changing a few words in a U.S. law governing mineral resources could help ensure more domestic helium for cutting-edge science.

Late last month, the U.S. House Subcommittee on Energy & Mineral Resources held a hearing on the proposed Helium Extraction Act of 2017. It would update the Mineral Leasing Act of 1920 and allow drillers to push wells into underground caverns on federal lands solely to extract the element.

[+]Enlarge
Helium homes
The U.S. has the world’s largest helium reserves. Sources: IHS Markit.
A pie chart breaking out countries with large helium reserves. The U.S. has 35% of world reserves.
 
Helium homes
The U.S. has the world’s largest helium reserves. Sources: IHS Markit.

Under the existing law, well operators can lose their leases if they aren’t producing oil or natural gas along with the helium.

That arrangement was fine when helium prices for scientific users were in the low-single-digit dollars per liter and producers recovered the element only as a by-product of extracting natural gas. A result of uranium and thorium disintegration, helium is found in some gas wells at concentrations ranging from 0.2 to 7% by volume.

But shortages in the past few years have sent helium prices ballooning to the teens. Market jitters over the long-term availability of a domestic source of the commodity have also kept prices high.

Now, with prices for helium staying buoyant, the economics of developing wells solely for their helium is suddenly attractive. A number of those on-purpose helium wells are up and running, and developers promise more of them are on the way—provided they can get good lease terms.

Scientists use helium as a coolant for nuclear magnetic resonance magnets and as a carrier gas for gas chromatography and mass spectrometry. It’s prized because it is chemically inert and is a liquid at temperatures near absolute zero. Helium is also used for welding, medical imaging, and making semiconductors.

Helium is largely extracted by energy companies such as ExxonMobil and refined by Air Products, Linde, and other industrial gas firms. Over the past decade, most big helium projects have been in places such as Qatar and Algeria that are plagued by geopolitical uncertainty. Russia, often at odds with the U.S., plans to bring a large helium plant on-line in 2021. Meanwhile, helium development in the U.S. has been less aggressive.

“Without a domestic source of helium, American industries will be forced to rely on foreign-sourced helium,” noted Paul Gosar (R-Ariz.), chairperson of the House subcommittee considering the new helium act.

The recent blockade of shipments from Qatar and the looming end to U.S. government sales of excess helium inventories further highlight the precariousness of the helium supply situation.

Because of a political dispute, Saudi Arabia cut off helium shipments from Qatar to the Port of Jebel Ali in Dubai, United Arab Emirates, in June. Qatar then shut down units that separate helium from natural gas, severing about 30% of global helium production. Users braced themselves for a shortage, but earlier this month, helium began flowing again when regular shipments of the element resumed from a port not subject to the blockade.

While the Qatari situation appears to be resolved for now, shortfalls are likely to occur again after the U.S. government conducts its last sale of excess helium inventory in the summer of 2018. Sales from the helium stockpile annually add more than 20 million m3 of helium to the market.

The government helium, together with helium from private sources, brings annual U.S. output to about 80 million m3. The U.S. produced 53% of global helium supply in 2015, consumed 42%, and exported the balance, according to Bala Suresh, industrial gases research director at consulting firm IHS Markit. Without the annual government helium sales, Suresh says, the U.S. will need to import helium or develop more untapped resources on its own.

But on-purpose helium production won’t take up the slack right away, and it’s not clear if it will ever completely replace helium now sold from the U.S. reserves, says Phil Kornbluth, a consultant who previously ran the helium operations of Matheson Tri-Gas. Wells producing helium alone put out less than 5 million m3 of the element annually, he says.

Testifying before the House Subcommittee on Energy & Mineral Resources last month, Jason Demers said, “The United States is blessed with abundant helium resources.” Demers, president of Tacitus Ventures, an Alberta-based helium exploration firm, is now working to lease land in the central Colorado Plateau, where he hopes to produce the noble gas in 2019.

Many helium resources, Demers told the subcommittee, “have been left largely undeveloped, as the helium has often been found in its highest concentrations within subsurface gas deposits that are regarded as noncommercial.” Demers tells C&EN that land his company is considering for lease, including federal lands, contains between 83 million and 195 million m3 of the element.

Projects that Tacitus is considering would yield high-purity helium gas. Industrial gas companies could further process and cool the gas into liquid helium used, for instance, by operators of nuclear magnetic resonance spectrometers.

“You can’t just snap your fingers and get new helium. It takes years to develop from concept to plant,” points out Scott Sears, upstream helium production president at IACX Energy, a Dallas-based helium processor and producer. In 2013, the firm started helium production at the Harley Dome field in Utah.

The Harley Dome, designated a federal helium reserve in 1934, contains a mixture of nitrogen and 7% helium. A workaround with the federal government now allows IACX to produce helium from the reserve, Sears says, “but we need congressional action” to clarify leasing arrangements for IACX and others.

The firm is developing a second helium-only site at the Woodside Dome field, also in Utah. Another federal helium reserve, the dome contains largely nitrogen and about 1.4% helium.

Though the concentration is lower, the Woodside reserve actually contains more helium overall, Sears says. The company plans to start the facility in 2018.

The Woodside and Harley Dome projects are relatively small, Sears says. “There’s no way we’re in the same echelon as ExxonMobil,” which produces about 20% of the world’s helium at a gas processing plant in Wyoming.

But Sears sees no reason why IACX can’t become a large helium producer in time. “You’ve got to crawl before you walk and then walk before you run,” he says.

Even Canada, which didn’t produce helium for more than 40 years, is once again a source of the noble gas. For example, Weil Group, a Richmond, Va.-based natural resources exploration firm, opened two helium wells in Mankota, Saskatchewan, in 2016.

Using a pressure swing adsorption unit designed by Linde, Weil’s processing plant separates helium from other gases in the well and is capable of producing 1.1 million m3 of ultrapure helium annually, says Scott Cardozo, chief financial officer.

Leasing government lands for helium extraction is more straightforward in Canada than in the U.S., Cardozo says. He notes that Weil has helium prospects in the U.S., but—as is the case for projects being considered by Tacitus and IACX—the decision to move forward will depend on federal leasing terms.

Clearer terms will help all on-purpose helium projects move ahead, Cardozo says.

 
Chemical & Engineering News
ISSN 0009-2347
Copyright © American Chemical Society
Comments
Rafael Santos (Wed Jul 19 15:26:08 EDT 2017)
The story did not mention any environmental impact that may result from the exploration of on-purpose helium wells, more specifically the release of greenhouse gases. If these wells also contain natural gas, does that gas get captured/separated and sold as natural gas, does it get vented into the atmosphere, does it get combusted and then vented into the atmosphere, or is there any other fate for this by-product?
When a well is explored for natural gas, and helium is a by-product, I assume most of the natural gas is commercialized (where it will eventually be combusted, but while performing a useful service). What about when the well does not have enough natural gas to make that its main economic driver, does the gas still get used or is it just disposed of? Could that be a reason why it has been required that helium not be the primary product of a well?
I would appreciate any insight on this.
Reply »

Leave A Comment

*Required to comment