"How is Helium produced?"

Production: Although Helium is one of the most common elements in the
universe it is a rare gas on earth. It exists in the atmosphere in such
small quantities (less than five parts per million) that recovering it
from the air is uneconomical. Helium is produced as a by-product of the
refining of natural gas, which is carried out on a commercial scale in the
USA and Poland. In these areas natural gas contains a relatively high
concentration of Helium which has accumulated as a result of radioactive
decay of heavy elements within the earth's crust. Helium is supplied to
distribution centres throughout the world in liquid form in large cryogenic
containers. The Helium is filled into liquid containers, gas cylinders and
cylinder packs as necessary.

History of Helium Production: Government involvement in helium conservation
dates to the Helium Act of 1925 which authorized the Bureau of Mines to build
and operate a large-scale helium extraction and purification plant. From 1929
until 1960 the federal government was the only domestic helium producer. In
1960, Congress amended the Helium Act to provide incentives to natural gas
producers for stripping natural gas of its helium, for purchase of the
separated helium by the government, and for its long-term storage. With
over 960 million cubic meters (34.6 billion cubic feet) of helium in
government storage and a large private helium recovery industry, questions
arise as to the need for either the federal helium extraction program or the
federally maintained helium stockpile.

In a move which would take the federal government out of the helium business,
Congress passed the Helium Privatization Act (H.R. 873) as part of the
Seven-Year Balanced Budget Reconciliation Act of 1995 (H.R. 2491). Although
the measure died when the President vetoed the Budget Act on December 6, 1995,
the Administration has made a goal the privatization of the federal helium
program. On April 30, 1996, the House suspended the rules and passed H.R.
3008, the Helium Privatization Act as agreed to in the House-Senate conference
on the Budget Act. Subsequently, the Senate Energy and Natural Resources
Committee amended the bill to provide for the National Academy of Sciences
to study how best to dispose of the helium reserve. On September 26, 1996,
with limited time remaining for the 104th Congress, the House again suspended
the rules and passed H.R. 4168, a new bill containing the Senate Committee
language. This would avoid the need for a conference if the Senate would
also pass the same bill. The Senate did so on September 28, 1996. This report
reviews the origin and development of the Federal Helium Program; analyzes
the choices that Congress faced in terminating the program; reviews the
issues that the National Academy of Sciences will study, and summarizes
H.R. 4168.

Federal interest in helium began with World War I when its military value as
an inert lifting gas was recognized by the Army and Navy. The Bureau of
Mines' involvement in the Helium Program dates back to passage of the Helium
Act of 1925 under which the Bureau was authorized to build and operate a
large-scale helium extraction and purification plant. This plant went into
operation in 1929 at Amarillo, Texas. Demand increased significantly during
World War II and four more plants were built, including the Exell, Texas
plant, which is now the Bureau's only operating plant. Private helium
operations followed passage of the Helium Act Amendments of 1960 (P.L. 86-777)
which authorized the Secretary of the Interior (authority delegated to the
Bureau of Mines) to enter into long-term contracts for the acquisition and
conservation of helium to be stored in the Cliffside Reservoir near Amarillo,
Texas. The Act directed the Secretary of the Interior to operate and maintain
helium production and purification plants and related storage, transmission,
and shipping facilities. The Act also authorized the Secretary to borrow from
the Treasury up to $47.5 million per year, at compound interest, to purchase
helium in lieu of direct appropriations. The 1960 Act required the Secretary
of the Interior to determine the net worth of assets of the Helium Program
acquired prior to 1960 ($40 million) and establish this as debt in the Helium
Fund to which subsequent borrowing would be added. The Act stipulated that the
Bureau of Mines set prices that would cover all of the program's costs,
including debt and interest, and provided a period of 25 years to pay back the
debt (with a 10-year extension to 1995). In addition, federal agencies and
contractors were required to buy helium from the Bureau of Mines.

As a result of the 1960 Act, four private natural gas producing companies
built five helium extraction facilities and entered into 22-year contracts
with the Bureau of Mines. Because demand for helium did not meet the forecast
of the late 1950s, the Bureau of Mines began to borrow from the Treasury as
authorized to pay for helium purchases. In 1973, the government had 970
million cubic meters (35 billion cubic feet) of helium in storage, which was
far in excess of projected government needs, and canceled the purchase
contracts. This led to several years of litigation during which most private
helium extraction plants remained idle.

Where is Helium Produced: World helium resources exclusive of the United
States are estimated at 18 billion cubic meters (650 billion cubic feet) of
which 9.2 billion cubic meters are in the former Soviet Union, mostly in
Russia. Other helium resources are located in Algeria, 2.1 billion cubic
meters; Canada, 2.1 billion cubic meters; China, 1.1 billion cubic meters;
Poland, 0.8 billion cubic meters; and the Netherlands, 0.7 billion cubic
meters.

The helium resources of the United States are estimated to be about 13
billion cubic meters (470 billion cubic feet). This includes 1.0 billion
cubic meters (34 billion cubic feet) in storage in the government stockpile,
6.8 billion cubic meters (250 billion cubic feet) in helium-rich natural gas
(0.3% helium or more), and 5.2 billion cubic meters (190 billion cubic feet)
in helium-lean natural gas (less than 0.3% helium). Other than the two major
helium-rich natural gas fields (Riley Ridge in southwestern Wyoming and
Hugoton extending from southwest Kansas through the Oklahoma and Texas
Panhandles), most of the helium-rich natural gas fields in the United States
will be exhausted by the year 2000. As these fields deplete, future
production will probably shift to extracting helium from helium-rich natural
gas with little fuel value and from helium-lean resources.

Uses of Helium: Liquid Helium is used for several things, including
Chilling powerful magnets in Magnetic Resonance Imaging and Spectroscopy
Cryogenic Research. Gaseous Helium is used for Gas Chromatography, Leak
Detection, Scuba Diving, Medical Therapy, Controlled/Modified Atmospheres
Balloons (including the ones in the Macy's Parade) and Airships. It is
also used in Welding, and as a heat transfer medium. Liquid Helium is an
ideal source of cold for superconductivity and for low temperature
applications. In particular liquid Helium enables the development of the
high strength magnetic fields required in NMR (Nuclear Magnetic Resonance
Imagery) Spectroscopy and MRI (Magnetic Resonance Imagery) medical body
scanners. Liquid Helium is also used extensively in low temperature research.

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