The ongoing helium-supply demand situation has been in focus again in recent weeks, after The Bureau of Land Management (BLM) raised the price of federal crude helium.
According to a statement by the BLM, revised pricing for crude helium will be offered during its 2013 Open Market Sale, effective October 2012. The Fiscal Year 2013 price will be $84.00 per Mcf, up from $75.75 per Mcf in Fiscal Year 2012.
There are suggestions that another dynamic could eventually have an impact on the market too, with the news that the US Senators Jeff Bingaman and John Barrasso have proposed new legislation which stipulates a responsible resource management strategy for the Federal Helium Reserve.
“…a BLM statement explains that the new price is the result of a revised methodology that relies partly on the Consumer Price Index (CPI), but incorporates other factors aimed at better capturing the costs of production and the increasing value of crude helium”
The bipartisan Helium Stewardship Act draws on recommendations from private helium refiners, retailers, end-users, BLM officials and the National Academy of Sciences to address the most pressing problems facing the USA’s helium industry.
Current US law orders essentially a ‘fire sale’ of existing Federal helium assets to repay a $1.3 billion debt to the US Treasury.
However, the current sales structure distorts the private helium market and is creating uncertainty for industrial, Federal, medical and scientific users of helium.
The Bingaman-Barrasso bill would remove this market distortion for the benefit of industry, private and Federal users
In terms of the newly revealed price increase, a BLM statement explains that the new price is the result of a revised methodology that relies partly on the Consumer Price Index (CPI), as in years past, but incorporates other factors aimed at better capturing the costs of production and the increasing value of crude helium.
These include an Enrichment Factor (essentially the cost of maintaining pressure and flow of gas from production zones), and a Conservation Factor (a calculation of the value of helium and methane lost during transportation, metering, and through production).
The new methodology is expected to encourage industry conservation of the resource.
Going forward, a BLM statement elucidates that the cost of helium sold for federal purposes will continue to be the minimum allowed by the Federal Helium Privatization Act of 1996. For Fiscal Year 2013 the pricing has been adjusted to $67.75 up from $65.50 in Fiscal Year 2012.
Meanwhile, a recognized expert in energy technologies - Dr William Nuttall of Cambridge Judge Business School - has co-authored a new book titled ‘The Future of Helium as a Natural Resource’ which is the first book to focus in detail on both its supply and demand.
Nuttall is predicting a healthy long-term future for the helium industry with the gas playing a major part in both nuclear fission and fusion.
The book was co-authored by Culham Centre for Fusion Energy (CCFE) Cryogenic Technologist Richard Clarke and Bartek Glowacki, who is a Professor in Materials Science and Metallurgy at Cambridge University.
Among the conclusions that the book offers, it says more gas will be needed, reserves will have to be conserved, and recycling must be prioritized.