User:J. A. Buitendijk/sandbox

Development of the Helium Industry
Ideas about potential applications of helium first surfaced in 1914 within the context of the first world war as a replacement for hydrogen balloons [4]. Interest in helium for use in airships primarily came from the British and United States militaries [4].

The first major development in Helium production was the The Helium Conservation Act of March 3, 1925. It established a production and sales program under the control of a centralized entity, the Bureau of Mines [1]. Around this time, it was discovered that helium enabled divers to stay underwater longer and ascend in a shorter time, presenting another application for helium. In reaction to depleting helium sources, the Helium Act of March 3, 1927 was established to prohibit the sale of helium to foreign countries and non-governmental domestic use [4].

By 1937, a number of factors collided to move the United States government to revise its helium policy and create the Helium Act of September 1, 1937. New uses for helium were appearing and the U.S. Army and Navy did not require anywhere near the national output. A final impetus was given by the Hindenburg disaster, which may have been prevented, had the Germans had access to helium [4]. The act authorized the sale of helium gas not needed by the U. S. government. It ultimately led to an explosion in helium usage across many scientific and commercial industries as the Bureau of Mines now also supplied helium to private parties. The passage of this act also allowed non-hostile foreign governments to purchase helium for their own commercial use. When Nazi Germany applied for 18 million cubic feet of helium, intended for public airship travel, this sparked a debate in the U.S. that ended in a refusal [4].

Throughout the second world war, government demand still significantly outweighed private use and was sufficient to supply government use (230 million cubic feet 1942) [4]. By the end of the war, demand for helium had dropped precipitously thus ceasing the operation of most plants. This led the Bureau of Mines to begin a helium conservation program in January 1945 by injecting surplus helium into the Cliffside field [4].

Creation of the US National Helium Reserve
From 1917 to 1962, the Bureau of Mines was the primary producer of helium and it stayed the sole purifier of helium until 1963 [1],[2]. Leading up to the early 1960s, there was a rapid growth in government demand in the United States for helium fuelled by the military, especially for aerospace applications such as liquid fuel rockets for defense and space exploration [1],[5],[2]. The amount of stored helium before 1962 was very small and by consequence the amount of available helium was essentially determined by the production of natural gas, from which it is separated as a side product, rather than market forces [2],[8]. In the early 1960s, all this changed with the creation of the United States National Helium Reserve [5]. At this time, the Bureau of Mines negotiated long-term contracts with four private companies for the first time to purchase and store large amounts of helium and established an underground reservoir in the Cliffside field near Amarillo, Texas [1],[5],[2]. The original purpose of this reserve was to store helium in the 1960s for government use in the 1970s [5]. To ensure that the revenue from future sales would amortize the cost, the Secretary of the Interior raised the price of high purity helium from $12 per thousand cubic feet to $ 35 [1],[8]. This price jump incentivised private companies to enter the market and sell helium at lower prices [1],[5],[8]. By 1970, it also became evident that the projected increase in government demand did not occur and that the helium stored in the Cliffside field would last for decades. The combination of lower-than-projected demand and private competition resulted in sustained losses for the Helium Reserve. In reaction, the government cancelled its contracts in 1973 [1],[5]. As a consequence, the industrial capacity utilization rate for helium production dropped from 104% in 1966 to 41.7% in 1974. The helium companies involved in the operation proceeded to sue the United States government for breach of contract. The owners of the land containing the natural gas from which helium is captured as a side-product sued the government for the value of the helium as they did not sell this to third parties [5]. In the 1970s the Bureau of Mines changed its policy to allow private companies to store helium in the Cliffside field. This had a profound impact on the industry: prior to this decision, roughly two billion cubic feet of helium were separated from natural gas annually and 0.6 billion cubic feet were sold. Three years after the decision, 0.88 billion cubic feet were sold, 0.54 were store and 0.98 were separated and vented. At the same time, roughly 4.74 billion cubic feet were not separated from natural gas [5].

Helium Privatisation Act
In the 1990s there was a rapid growth in demand due to the development of the electronics and MRI industries and this growth continued at a slower pace until today with the exception of 2008-2009 [8],[4]. Federal Helium Reserve sales led to fluctuations in both pricing and supply [8]. Within this context, the Helium Privatisation Act was passed in the United States in 1996. The Bureau of Land Management was given responsibility for operating the Reserve and charged with recouping the taxpayers’ investment by selling its crude helium to private vendors [4],[8]. More recent legislation aimed at fully privatising the helium market requires that the Bureau of Land Management sell off the vast majority of the Reserve during the next several years and cease its operations by 2021 [8]. After problems with the helium-supply in 2012-2013, the United States Congress acted to extend the life of the federal helium reserve [4],[6].

New Producers
While formerly most of the helium production came out of the United States, diversification in producing countries is slowly coming. Qatar, Canada, Algeria and Russia are now producers of Helium [3],[6],[8],[4]. In 2015, this new production even resulted in a surplus of supply over demand [8]. The United States, which has historically been an exporter of helium, will soon become an importer for the first time in its history [4]. Even the largest helium hub in the world is no longer located in the United States of America but in Qatar since 2013, producing 1.3 billion cubic feet of helium per year from a single project and supplying 25% of global demand [4]. One challenge related to bringing new helium sources onto the market is that this usually takes risk capital [4]. Another challenge is that the current selling price of US Cliffside helium low enough to discourage more new producers to enter the field [4].