**BLM Helium Operations**

A Telecast Originating from the BLM National Training Center

February 25, 1999

This transcript is from the closed-captioning file produced during the
telecast.

It may contain errors and omissions in transcription.

Announcer: the Bureau of Land Management Satellite Network Presents Live
from the BLM National Training Center in Phoenix, Arizona ‑‑ \"BLM\'s
Helium Program. Its Past\... Its Present\... And its Future.\" And Now,
the Host of Your Program, Del Fortner.

Fortner: Good Morning. Glad You Could Join Us. We\'re Here Talking about
BLM\'s National Helium Program and We\'d Like to Thank You for Taking
Time to Join Us. We\'re Discussing the History, Current Role and Future
Mission Of BLM\'s National Helium Program. Before We Get Back to Our
Discussion, I Need to Let You in On a Few Thing. This Broadcast Is
Geared Towards All BLM Employees, but Especially Those Working in the
Oil and Gas Program. If You Have Any Questions Any Time During the
Broadcast, Please Fax Them to Us. Include Your Name, Organization And
Telephone Number Where You Can Be Reached. In the Event We Have Some
Questions for You. At the End of Our Discussion, You\'ll Be Able to Call
in Questions and Talk to Us. So We Need Your Participation Today. It\'s
Important for Us to Have a Record of Everyone Who Watches Today\'s Show.
BLM Downlink Coordinators Should Fax a Viewer Roster to NTC at The End
of Today\'s Broadcast or Can You Use NTC New Electronic Reporting System
as Website www.ntc.blm.gov/satnet. I Would like to Introduce Our Group.
We Have Michelle Chavez, New Mexico State Director. Thanks for
Participating Today.

Chavez: Thank You, Del. I Am Real Pleased to Be Here. You Know, Del, I
Have Been Hearing Around the Country That The Rumors about Helium and
the Helium Program, and Folks Have Been Asking Me Things Like, Well, I
Thought Helium Was Going To Disappear. How Come We\'re Still Talking
About Helium? I Think this Program Is Going to Give Us an Opportunity to
Tell That Message and Let People Understand a Little Bit Better What the
Helium Program Is All About.

Fortner: and I Think That Will Be Accomplished Today, Michelle. Tim
Spisak Joins Us from the Amarillo Field Office. Tim Is Team Leader,
Natural Gas Engineering. Welcome, Tim.

Spisak: Good Morning. To Paraphrase Mark Twain, the Reports of Helium\'s
Death Has Been Greatly Exaggerated. I Hope We\'re Able to Share Insight
into this New Program to BLM and Show How it Works.

Fortner: Jeanne Mccubbin Is Also from the Amarillo Field Office. Jeanne
Is Team Leader, Federal Leased Lands and Glad Could You Join Us Today.

Mccubbin: Hi! We\'re Awfully Excited about Being Able to Tell about Our
Helium Program Today and I\'d Also like to Take a Chance to Invite to
You Call in and Join Fuss Any Time You Feel You Need To Make a Comment
or Ask a Question.

Fortner: We Also Have Some Taped Opening Remarks from Pete Culp, the
Assistant Director for Minerals, Realty and Resource Protection. We Were
Just about to Watch it When You Joined Us. So Why Don\'t You Come in and
Watch it with Us.

Culp: Good Morning. In Just a Few Moments You Will Be Introduce to Do
BLM\'s Federal Helium Program. The Federal Government\'s Involvement in
Helium Production Had its Origins in 1917 with Attempts to Develop Uses
for This Lighter‑than‑air Element. Over the Years Congress Has Passed
Legislation to Shape and Reformulate the Program. Many of You Are Aware
That in 1996, Administrative Responsibility for the Program Was
Transferred to BLM. However, Some Have Assumed the Passage of the Helium
Privatization Act of That Year‑ended the Federal Helium Program. This
Broadcast Will Address Those Issues and Provide Some Insight into How
Personnel in The Field Offices May Be Impacted by the Program. In May
1998, Helium Operations Personnel Held a Commemorative Ceremony at the
Exell Helium Plant for the Helium Employees. Director Tom Fry Attended
the Event and Was Impressed by the Display of Employee Pride in the
Accomplishments and Achievements Of the Program. Today Most of Those
Employees Have Gone on to Face New and Challenging Careers. But Those
Employees That Remain Continue to Carry on this Legacy Of Outstanding
Customer Service, As Government Stewards. I Believe That Many of the
Functions and Responsibilities Inherent to the Federal Helium Program
Mesh Completely with the Mission of BLM. My Staff and I Are Committed to
The Program and to Making the Transition of Helium Operations Employees
into the Bureau a Positive Experience. Join Me Now as We Look More
Closely at the Federal Helium Program and its Role Within the Bureau.

Fortner: Michelle, Pete Just Told Us this Program Meshes with BLM\'s
Mission. How Is New Mexico BLM Implementing This?

Chavez: I Think That\'s True. There Are Already Someways Where The
Helium Program Meshes with What the BLM Is Traditionally Done. We Have,
of Course, Analysis of Reserves, Monitoring of Production, Auditing
Books for Royalties. But I Think the One Thing That We\'re Doing and
Started Doing Right Away Was Welcoming the Employees from Amarillo into
the BLM Family. We\'ve Been Having Folks Come to The Offices and Share
Their Experiences. We\'ve Also Had Two Presentations From Helium
Personnel, Experts, Give Talks to Our Management Team about the Helium
Program And Talks to Our Employees in Santa Fe about the Helium Program,
Which Is Really Helped Us to Understand This. You Know, I Was at That
Commemorative Ceremony in Amarillo, and I Have to Reiterate it Was
Really Exciting To See the Amount of Energy and Devotion to the Program
That We Have in Those Employees, and It\'s Really Exciting to Have Them
Come and Be a Part of Our Family. We Also Hope to Fill the Field Office
Manager Position in More Of a General Management Category, More in Line
with the BLM Managers and Recognizing That They Are a Part of Our
Family.

Fortner: Do You See Any Administrative Impacts to Your Organization?

Chavez: Absolutely. Right Now, of Course, We\'re in The Process of
Strategic Planning and Identifying Work Loads That Will Be Reported to
Congress, and We\'re Bringing Helium into That. That\'s a New Challenge
for Us. We\'re Also Trying to Streamline And Develop a Budgeting Process
That Makes Sense and We Want to Make Sure to Fold the Helium Budgeting
Process into That. I Think it More Importantly Is Program Advocacy
Itself, Making Sure That Those Who Need to Know And Those Who Are Making
Critical Decisions Understand The Helium Program and What Resources We
Need to Support That Program. Of Course, We\'re Providing Administrative
Support, Eeo, Human Resources Procurement and That Sort of Thing, and We
Hope That We Can Start to Provide the Best Service for Them in Those
Areas. I Think the Most Important Thing Is Understanding the Work
Processes and What Helium Does And the Process They Follow and Seeing
Where There Are Similarities in That Process as Well as Maybe the
Uniqueness of The Helium Processes. One Example We Have Just Been Facing
Is Appeals and How We Handle Appeals. You Know, We\'re Used to Using The
Interior Board of Land Appeals Process, and We\'ve Received Some Appeals
from Our Traditional Customers Dealing With Helium, and So Now We Have
To Figure Out, What Is the Process We Should Be Using for This?

Fortner: since this Is a National Program, How Will it Impact Other BLM
Offices?

Chavez: Well, Right Now the Folks in Amarillo Have Already Established
Somewhat of a Relationship with Other BLM Offices, Particularly Oil and
Gas Offices, Because They Are in The Process of Collecting Data That We
Have That\'s Important For Them to Do the Function They Do. And That
Relationship Will Continue. I Think Also, as We, You Know, Continually
Look at Process Changes, Changes in Regulations, We\'re Going to Be Able
to Take Advantage of the Experiences That the Amarillo Office Has and
Share Those Experiences.

Fortner: Ok.

Chavez: You Know, Del, I Think That Jeanne and Tim Have The Expertise to
Answer Those Questions a Lot Better than I Do. But Before We Do That, I
Think It Would Be Worthwhile for Us to Better Understand Just What
Helium Is and What the Uses Are. Tim, Do You Think Could You Share with
Us Some of the Uniqueness of Helium and How It\'s Being Used?

Spisak: Certainly. There Are Many ‑‑ Helium Has a Unique Combination of
Properties That Make it Very Special. It Is Odorless, Colorless,
Tasteless and Chemically Inert. This Makes it Ideal Use for Purging
Rocket Engines after Testing or as a Shielding Agent Needed for High
Quality Welding In Aircraft Construction or for Pressurizing Fuel Tanks
During Rocket Launches. Being the Second Lightest He Element and
Smallest, it Makes It Also an Ideal Lifting Gas as Used by the Air Force
Patrolling Our Southern Borders. And as a Leak Detection Medium Which
Helium Can Leak Through, If Anything Is Not Totally Sealed. Helium Also
Liquifies at minus 450 Degrees Fahrenheit. That\'s Just a Couple Degrees
Above Absolute Zero. At That Low Temperature, Superconducting Materials
Allow Scientists to Conduct Cryogenic Research Such as Pictured at the
Fermi Lab.

Mccubbin: and I Would like to Add People Are Most Familiar With Mris or
Magnetic Resonance Imaging and Helium Is Used to Cool Them. Because
Helium Cannot React Inside the Body, It\'s Given in Breathing Mixtures
Given to Deep Sea Divers, Used in Asthma Patients and Also Used in
Diluting Anesthetic ‑‑ Anesthetic Mixtures. The Department of Defense
Uses It in the Weapons System Program And the Department of Energy Uses
it in Nuclear Research. Bags That Are Filled with Helium Enable the
Scientist to Measure The Simulated Shockwaves That Initially Occur
During a Nuclear Blast. That Gives a Few More Examples And I Think
People Are Usually Surprised at the Broad Uses of Helium.

Fortner: How Much Helium Is Used Annually?

Mccubbin: the Annual U.s. Consumption Is Estimated at About 2.4 Billion
Cubic Feet. Or Approximately 1% of the Total Measured Helium Reserve.
The Major Uses of Helium Ranked By Percentage Are Cry Cryogenics 24%,
Welding 20%, Pressure and Purge Uses, 19, Atmosphere Control 11%, Leak
Detection 5%, Breathing Mixtures 3%, and the Remaining 18% Includes All
Other Uses.

Fortner: Tim, When I Visited Your Office Last Year, I Found The History
of the Helium Program to Be Really Fascinating. Could You Give Us a
Little History Lesson?

Spisak: Well, I Think It\'s Important to Get a Historical Perspective of
Why the Government Got Involved in the Helium Program. It Was Discovered
on the Sun in 1868 and on Earth in 1895 and in Natural Gas in 1905.
Helium Separation Technology Sponsored by the Bureau of Mines And War
Department Was Put into Use at the First Experimental Plant Built near
Ft. Worth, Texas, in 1918. Both the Bureau of Mines and Private
Companies Collaborated To Improve Separation Technologies and Develop
Helium As a Lifting Gas for Observational Blimps. During this Time for
Security Reasons, Helium Was Referred to As Gas X or Even Argon So as to
Deflect Attentions from the Military Uses. Next the Helium Act of 1925
Was Passed, Which Transferred the Administrative Authority to the
Federal Helium Program. With the Bureau of Mines. As the Ft. Worth Field
Reserves Began to Run Out, New Sources of Helium Were Identified near
Amarillo, Texas. The Bureau of Mines Retained the Rights to the
Cliffside Field And Built the Amarillo Plant Which Went into Operation
in 1929. Production Continued at the Amarillo Plant Between the World
Wars. When Wartime Demands Increased Dramatically the Bureau of Mines
Built Four New Plants, the Exell Plant in Texas, the Otis Plant In
Kansas, the Cunningham Plant Also in Kansas, and the Navajo Plant
Located in New Mexico. This Increased the Supply That Was Need to Do
Meet in the Creasing Wartime Demands Primarily Air Ship Patrols. In Fact
During World War Ii it Was Reported That over 89,000 Convoy Ships Were
Escorted by Navy Blimps Without a Loss of a Single Ship. Changing Helium
Demand During The Late \'40s and \'50s Led to Several Plants Being
Dismantled Or Permanently ‑‑ or Shut down On Standby. This Led to Helium
Shortages in The Later \'50s. As the New Demands of the Space Race Began
to Take Hold. To Address These Helium Shortages, the Congress Passed The
Helium Act Amendments of 1960. The Conservation Program. The Act
Authorized Private Companies to Build Extraction Facilities to Remove
the Helium From the Gas and Sell it to the Government. Otherwise it
Would Have Been Wasted. The Bureau of Mines Also Purchased Helium from
Private Companies and Processing Helium Bearing Gas from the Fields in
Kansas, Oklahoma and Texas. They Then Constructed a 425 Mile Pipeline to
Deliver this Purchased Crude Helium from the Private Plants to the
Storage Field near Amarillo. The Two Major Goals of the Act Were to
Conserve Helium, a New Renewable and Strategic Resource And to Foster
the Development of Private Helium Refining and Marketing Capabilities.
Del, That Kind of Generally Sums Up the History Behind the Program.

Fortner: That Kind of Brings Us up to the Present. Jeanne What Are the
Present Authorities the Helium Operates Under?

Mccubbin: There Are Presently Three Programs. The Minerals Lands Leasing
Act Of 1920 Excluded Helium and Exclusively Reserved it to the Federal
Government When Federal Mineral Leases Are Issued. The 1960 Amendments
to the Helium Act Mandated Helium Monies Be Collected and Deposited into
the Helium Production Fund. This Fund Is a Nonappropriated Resolving
Fund Used to Cover the Costs of Operations of the Helium Program and to
Repay the Debt That Was Incurred by the Establishment of the
Conservation Program Tim Just Told Us about and to Foster Development of
the Private Helium Industry. The Helium Privatization Act of 1996 Covers
Several Points. It Called for the Shutdown of The Refining and Marketing
Operations Effective in April of 1998. And for Disposal of All Personal
And Real Properties Not Needed For Continuing Operations. These
Functions Are Currently Being Performed by 27 Employees On Our Closure
Team and They Have Been Charged with Completing These Tasks No Later
Than April of 2000. That Act Also Requires That Suppliers of Selling
Refined Helium to Any Federal Agency Be Required to Buy an Equivalent
Amount from the Federal Helium Reserve. Also the Act Called for a
Program of Long‑term Sale to Reduce the Helium Reserve to a Level of
600,000 Mcf. And the National Academy of Sciences Has Been Directed to
Determine the Feasibility of That Reduction of the Reserve. The Final
Point Is the ‑‑ Authorizes the Continuation of Four Remaining Helium
Functions. There Are Also Two Legislative Authorities Governing Helium
Contracts. 43 Cfr 16 Governs Contracts for Helium Extracted from Federal
Leased Lands and 43 Cfr 3195 Covers Our in Kind Crude Helium Contracts.
That Pretty Well Sums up What Our Authorities Are to Date.

Fortner: Well, Thank You. I Think That Probably Clarifies A Lot of
Things for the Viewers Out There. Before We Continue, I\'d like to
Remind the Viewers That We Will Be Starting Our Question‑and‑answer
Session in About 15 Minutes. Now Would Be a Good Time to Fax In Your
Questions or Give Us a Call. The Helium Program Has a Very Interesting
Mission, Michelle. You Want to Tell Us a Little Bit About That Mission?

Chavez: Well, I\'m Learning About it Myself, as a Matter of Fact. You
Know, Hearing Tim Talk about Blimps Being Used During World War Ii and
the Amount of Success That We Gained from the Fact That They Had Helium
There and Could Use it Was ‑‑ I Don\'t Know How Many People Are Even
Aware That Helium Played Such a Significant Role in That War. That Was
Fascinating. As a Matter of Fact, it Seems Like Every Time We Get a
Briefing on Helium There\'s Some New Little Tidbit That I Learn About
It. For Instance, Tim Mentioned That Helium Was Discovered on the Sun To
Begin with and I Understand That it Was Discovered Because It\'s in the
Yellow Band of the Color Spectrum and I Think It\'s Kind of Interesting
That We Have Our Helium Office in Amarillo, Texas, Which, of Course, Is
the Spanish Word for \"Yellow.\" So There Is a Tidbit to Add to Our List
When We Start to Put Together the First Edition of \"BLM Trivial
Pursuit.\" The BLM Is Learning about this New Mission, and I Think That
What We\'ve Discovered Is There Are Four Primary Parts to What The
Helium Program Is Involved With When it Comes to the Federal Role.
There\'s Storage and Transmission, and That\'s Dealing With the
Reservoir, How Much Is Enough in There, Dealing with Our Customers There
and the Sale And Charging for the Services We Provide, the Pipelines,
the Railways, Transporting It, Liquid or Gaseous Form, Those Sorts of
Things. There\'s Also Crude Helium Sales, And That Is in Kind Sales to
Private Refiners and Then the Process They Use to Sell it Back To
Federal Agencies. We Also Have Helium Resource Evaluation, and I Think
That\'s ‑‑ We\'re Getting Closer and Closer to Functions That Are
Similar to the BLM, Identifying And Reporting the Reserves, Estimating
and Assess the Sources, That Kind of Information Gathering. And Then the
Last One, Which I Think Is Even Closer to What We Traditionally Have
Done in the Bureau, or with Minerals Management Services, Helium
Production on Federal Lands. This Is Where We Monitor the Production,
Audit the Books and Make Sure That Everyone Has the Same Information.
But, You Know, I Think, Again, That Tim and Jeanne Have a Lot More
Information about These. Tim, Do You Think Could You Elaborate on Some
of These Parts Of Our Mission with the Helium Program?

Spisak: Sure. I\'ll Go over the First Two Functions That We Have. The
Pictured Map Shows the Crude Helium Pipeline or Cpl Networking ‑‑
Network Connecting Private and Government Facilities to a Storage Field.
This Is Superimposed over the Panhandle Field. The Blue Circles on the
Map Are The 11 Private Crude Helium Extraction Facilities, Including The
Original Five Plants of the Conservation Program. The Green Triangles on
the Map Are the Six Private Helium Refining Facilities, Frequently
Located near a Crude Helium Extraction Plant. The Large Marked Red
Square on The Map Indicates Where the Government Owns Satanta Station Is
Located. This Facility Houses Two Meter Mechanics That Witness Monthly
Meter Checks in Kansas. They Also Provide Various Maintenance Functions
to the Cpl And Mark the Pipeline for the Many Possible Pipeline
Crossings That Occur Every Month. The next Large Red Square on the Map
Indicates Where the Exell Helium Plant Is Located. The Exell Plant Was
the Primary Government‑owned Helium Refinery During the Later
Operations. The Plant Was Decommissioned in April 1998 and Is Undergoing
Dismantling Procedures Now. The next Large Red Square on the Map
Indicates Where the Amarillo Helium Plant Is Located. The Amarillo Plant
Has More Recently Served as a Helium Trailer Maintenance and Filling
Facility. It Also Housed Our Technical Services Group. The Facility Is
Also Undergoing Proper Disposal Procedures. The next Red Square
Indicates Where the Cliffside Field Is Located. The Cliffside Field Is
at the Heart of the Storage Operation, A Gas Field Operations Manager,
Two Meter Mechanics, a Heavy Equipment Operator, Welder and Three Helium
Plant Helpers Conduct the Operation and Maintenance of the Field and Cpl
Located in Oklahoma and Texas. Additionally, the Storage Operations Are
Supported by Three Engineers, Petroleum and Mechanical and an
Engineering Technician. BLM Now Administers about 50,000 Acres with
Varying Interests. We Own the Gas Rights in All of The Highlighted
Property. The Light Blue Region Is Nearly 14,000 Acres Where We Also Own
The Storage Rights. The Light Red Region Is Nearly 12,000 Acres Where We
Own the Surface and Mineral Rights Except for the Oil Rights. The
Storage Reservoir Is a Partially Depleted Dome Structure Capped by an
Anhydryte. Of Course, Natural Gas Production Is Very Sick Lick. During
Winter Months, Natural Production Is Higher. During the Summer it Goes
Down. The Helium That\'s Produced, Associated Witness, like in the Gas
Field, That Helium Would Be Produced More in the Winter and Less in the
Summer. Well, Helium Demand Is Fairly Steady Throughout the Year. So
What Would Happen Is We Would Have Too Much Helium Produced in The
Wintertime and Not Enough in The Summertime. Well, the Cliffside Field
Acts As a Flywheel for Industry. It Serves to Store Excess Helium
Produced During Winter Months And Acts to Produce Helium out Of the
Field to Make up for Demand as Time Goes On. One of the Things We Do to
Monitor the Field Is Track the Helium Cloud Study. The Helium Cloud by
Periodically Sampling the Helium Content of The Gas Wells. By Plotting
the Contained Helium Percentages, We\'re Able to Devise Production
Strategies That Assure Stored Helium Is as Consolidated as Possible
Within The Center of the Field. The Native Helium Percent Is About 2%.
However, Stored Crude Helium Goes as High as 70‑plus‑percent Helium.
When the 1960 Act Was Passed, Emphasis Was Placed on Conservation of
Helium. To That End, the Government Started Storing Large Quantities Of
Crude Helium Produced by Private Helium Extractors. From 1962 to 1973,
the Government Bought 32 Billion Cubic Feet of Helium in Crude Form and
Stored it at Cliffside. The Green Line Indicates Total Helium Recovery
in the U.s. The Red Line Indicates Sales of U.s.‑produced Helium. The
Effects of the Helium Conservation Program Are Evident In the Large
Bubble in the 1960s. Helium Recovery Waned During the Late \'70s but
Started to Increase as Demand for Helium Began to Skyrocket and the
Price Of Refined Helium Increased in The \'90s. When the Bureau of Mines
Raised The Price of Refined Helium in 1991, it Was More Profitable for
Private Companies to Recover Helium from Helium Bearing Gas Streams and
Store it If There Was Not Immediate Demand for It. The Run up of Private
Helium and Storage Is Directly Attributable To this Event and Would Not
Have Been Possible Without the Cliffside Storage Field. Private
Companies Have Been Storing Their Own Helium in Cliffside since 1975.
The Old Contracts Applied Storage Charges Based on an Mcf Basis but
These Charges Never Fully Recovered the Cost to Store Private Helium. In
Effect the Government Was Providing a Subsidy for this Service to
Encourage Private Helium Storage. The New Helium Storage Contract
Started in 1995 and Increased The Storage Charges to the Private Sector
by about a Factor Of Three. A Helium Storage Specialist Works Full Time
on Administration of These Contracts. The New Contracts Prorate the
Annual Budgeted Cost for the Storage and Transmission Function to All
Private Storers By Contract Specified Formula. This Year the Private
Companies Are Paying about 94% of the Storage Functions Expected Costs.
Fixed Charges Are Assessed at The Beginning of the Fiscal Year To Cover
Contract Administration Fees at \$12,000 per Contract and Connection
Fees at \$20,000 per Connection to the Pipeline. These Fees Are Based on
the Estimated Costs to Manage These Parts of the Contract. The Remaining
Budgeted Expense Is Collected by Variable Charges. The Variable Charges
Are Determined by the Amount of Helium Acceptance, Redelivery And
Storage Activity by Each Company Compared to the Total System Activity.
These Charges Are Billed Throughout the Year and Are Generated about 2
to 2 1/2 Billion Years ‑‑ Dollars a Year In Revenues. The Crude Helium
Sales Are the New Kid on the Block. They Have Replaced Refined Helium
Sales We Were Making Until this past March. Open Crude Helium Sales Are
Expected to Commence No Later Than 2005 to Reduce the Helium Reserve. As
We\'ve Mentioned, the National Academies of Sciences Is Undergoing a
Study Now to Determine the Long‑term Feasibility of These Types of
Sales.

Chavez: Tim, I\'m Really Fascinated with the Partnership We\'re
Developing with the National Academy of Sciences in This Regard. I Had
the Pleasure of Sitting in On a Couple of Their Meetings, And I Was
Really Impressed by The Energy and the Interest at The Scientific Level
on this Study. They\'re Specifically Charged With Analyzing the Impacts
of How We Manage this Reservoir?

Spisak: Not Specifically How We Manage the Reservoir, but It\'s More, Is
There Enough Helium in Place? Does the Government Need to Maintain a
Larger Reserve? Could There Possibly Be Some Other Replacements for
Helium, Other Gases May Be Able to Be Used Instead of Helium. They Are
Looking at That. But Their Main Focus Is the Reserve as It\'s Specified
in the Legislation, Should it Be Disposed of in That Manner, How Will it
Affect Private Industry? And What Should Be Changed, If Anything?

Chavez: I See.

Fortner: Tim, Is Helium a Scarce Commodity, Then?

Spisak: Well, Generally So. I Mean, Certainly It\'s a Strategic
Material. Certainly in the \'60s When the Conservation Program Was
Enacted The Thought Was it Would Be ‑‑ The Field Would Be ‑‑ You Could
‑‑ the Gas Field Primarily Which Was the Main Source of the Helium, They
Thought it Would Be Produced by 1985, but its Production as Other
Natural Gas Fields Were Found, its Production Was Stretched out and That
Didn\'t Become a Reality. But It\'s Very Useful. It Doesn\'t Have an
Easy Replacement in a Lot of Things. And Once It\'s Gone, It\'s Gone.
It\'s a Lot More Expensive to Try To Extract it out of the Air, Which
Can Be Done, but You\'re Talking about Thousands of Dollars per Mcf
Compared to less Than a Hundred Now.

Chavez: and Now We\'re Shifting from Refining it to Dealing with Crude
Helium Sales?

Spisak: That\'s Right. The next Function Is the Crude Helium Sales. The
Sales ‑‑ the Only Kind We\'ve Had So Far Are the in Kind Sales. This Is
Where We Sell Crude Helium to Private Helium Refiners That Sell Refined
Helium To Government Agencies. Additionally the 1996 Act Mandates a
Price That\'s about Twice the Current Price for Crude Helium. The
Artificially High Price Will Ensure That the Helium Reserve Is Used as a
Last Resort Except Where Mandated To. Implemented the in Kind Helium
Sales, a Three‑way Relationship Had to Be Developed. One Side of this
Relationship Is The Federal Helium Users and Private Helium Refiners.
The Second Side Is the Relationship Between the Federal Users and BLM.
And the Third Side Is the Private Helium Refiners and BLM. The New
Regulations Govern How This Three‑sided Relationship Works. These
Regulations Have Just Been Implemented as a Final Rule in December and
Are Found in 43 Cfr 3195 as Jeanne Mentioned Earlier. All Federal
Agencies and Their Contractors That Use a Major Requirement of Helium
must Purchase Their Helium Refined Needs from an Authorized Private
Supplier. The Federal Users must Report Their Quarterly Usage to Our
Office. This Reporting Represents a New Administrative Burden to Those
Federal Agencies. However, Because of the 1996 Act Crude Helium Pricing
Mechanism, We must Have this Information So That We Can Effectively
Monitor The Private Refiner Sales Reports. The Regulations Directly
Reference the in Kind Crude Helium Sales Contracts That Are Used to
Comply with Portions of The 1996 Act. These in Kind Contracts More Fully
Define the Relationship Between the Private Helium Refiners and the BLM.
The 14 in Kind Contracts That Are Now in Effect Replace the 70‑plus
Helium Distribution Contracts That We Used Before The Helium Refining
Operation Ceased. The Definition of a Major Helium Requirement Has Been
Revised Upward to 200,000 Cubic Feet per Year to a Given Helium Use
Location W this New Definition, About 20% of the Federal Helium Users
Account for about 90% of The Helium Used by Federal Missions. The
Remaining 80% of the Users Do Not Need to Purchase from the Authorized
Private Helium Refiners or Need to Report Their Helium Use. Purchases by
Federal Agencies Are Matched with Reported Sales By Private Helium
Refiners and Refiners Are Billed Quarterly For an Equivalent Amount of
Helium. In the Kind Purchase Is Then Transferred into an Appropriate
Storage Account, Basically a Paper Transaction. A Crude Helium Sales
Specialist Administers These Contracts Full Time and for the First Nine
Months of 1998, We ‑‑ in Kind Sales Amounted to over \$5 Million.
Overall These Two Functions, Storage and Transmission and Crude Helium
Sales, Will Require General Managerial and Administrative Support from
BLM. In Keeping with That, We Have Four Persons on Our Administrative
Staff That Are Forging Working Relationships With the ‑‑ with Their New
Mexico Counterparts. Their Role Will Be to Act as a Liaisons to the
Appropriate Staff at the State Level. Now Jeanne Will Continue with The
Explanation of the next Two Functions.

Mccubbin: Another Area ‑‑ Excuse Me ‑‑ Another of the Remaining
Functional Areas Is That of Our Resources Evaluation. The Helium
Resources Evaluation Team Is Made up of a Chemical Engineer, a
Geologist, a Petroleum Engineer and a Technical Support Position That\'s
Shared with the Federal Lands Team. The Resources Evaluation Team
Identifies Occurrences of Helium Resources Within the United States and
Throughout the World. The Mission of the Resources Evaluation Team Is to
Identify And to Report Occurrences of All Helium Resources, Primarily
Within the United States, but They\'re Also Tasked with Identification
of Worldwide Resources and How These May Impact the U.s. Market. To Date
We Have a Database of Approximately 23,000 Helium Samples from Wells
Throughout The United States Which Have Been Analyzed by Our Own Gas
Analysis Team Comprised of Three Employees. Information from the
Database Is Used to Estimate Helium Reserves Of the States. Natural Gas
Containing Greater Than.3% Are Considered to Be Measured Reserves. From
.05 to .3%, They\'re Minimal Or Marginal. And If They\'re less than .05%
Helium Content, They\'re Considered to Be Subeconomic Reserves. These
Helium Estimates Are Then Compiled and Published in Two Publications
Which Come out Every Other Year. Those Are the Natural Gas Analyses and
the Helium Resources of the U.s. In Addition to These Publications,
Other Statistical Information on Helium Production Are Assembled So We
Can Meet Our Annual Reporting Requirements. For Example, in Our Annual
Report to Congress, the Total U.s. Helium Market Sales Are ‑‑ Including
Exports Reported in 1997 Is 3.8 Billion Cubic Feet. That Brings Us to
Our Fourth Functional Area, That of Covering the Helium Extracted From
Federal Acreages. It\'s Probably Best to Begin this Area by Explaining a
Little Bit Of History. Tim Told Us Earlier about the Purchase of Private
Helium During the Early \'60s. When the Purchase Contracts Were
Terminated, it Initiated Class Action Lawsuits in the Federal District
Court of Kansas. When Those Were Finally Closed And Settled in the Late
\'80s, We Began to Have Monies Trickle Into the Helium Office. The
Federal Lands Lease Team Was Formed in June of 1991 and We Began to
Monitor and Administer That Revenue Collection Program. One of the First
Steps We Did Was to Begin to Benchmark the Systems and Procedures That
Were Already in Place with the Minerals Management Service and The
Bureau of Land Management. In December of 1991, We Had a Meeting in
Denver, Colorado, With Mms and BLM Officials to Present Our Mission to
Them and To Identify and Seek Resources Or Information That We Could
Gain to Implement Our Own Procedures and Systems. The Five Employees of
the Federal Leased Lands Team Are Charged with Identification and
Collection of All Revenues from Extracted Federal Helium, and at This
Point People a Lot of Times Become Excited by the Impact or The
Massiveness of Such a Mission. But I\'d like to Remind Everybody That
Helium Is Not a ‑‑ Federal Helium from All Wells Is Not Extracted.
Extracted Helium must Have Access to an Extraction Plant. The Helium
Industry Is Small and Contained. The Main Geographic Sources Are From
the Field That under Lies Kansas and the Oklahoma and Texas Panhandles.
Other States with Helium Rich Natural Gas Resources Include Colorado,
New Mexico, Arizona, Montana, South Dakota and Even Alaska. The Work of
the Federal Leased Lands Team Can Be Best Described If We Divide it into
Four Areas, And the First One Is Identification. Once We Have Identified
the Federal Wells That Have Potential for Extracting Helium From
Leaseholds, We Notify Our Potential Clients with a Letter Which We Call
Our Greetings Letter and Tell Them Who We Are, What We\'re about and How
We Impact Their Lives. We Give Them Information about How to Make Their
Payments Accurately and Timely. Our next Area Is Our Adjudication. We
Use Mineral Acreage Documentation and BLM Records to Assist Us in Our
Adjudication Process. We Supplement Case Recordation, The Afms Database
and Mineral Ownership Documentation. Any Discrepancies We Note During
Our Adjudication Process, as a Lot of You Know, We Have Called Or
Notified the Appropriate Administrative Offices So That You Can Check it
out and Make The Changes If It\'s Appropriate. We Calculate the
Government Ownership Decimal for Helium Using Federal Leases and the
Agreements as Our Guides, and Also Applying Federal Mineral Ownership.
Confirmation of Our Calculated Government Ownership Decimals Are Then
Provided to the Clients For Their Confirmation So That They\'re in
Agreement with What We Think They Should Be Paying Us For. At this Point
I\'d like to Point Out the Impact of the Helium Settlement upon Our
Revenues. There Are Three Criteria That Must Be Met Before Settlement Is
Applied. If Any One of Those Is Absent, Settlement Is Not Applied. But
the Importance of this Is When Settlement Is Applied to Helium Proceeds,
the Maximum That the Government Ever Receives from Those Is 6% of the
Net Proceeds from Production. This Brings Us to the Third Work Area, Our
Collections. Helium Revenues Are Based upon The Helium Content of the
Natural Gas Metered or Measured At the Wellhead. This Is Quite Different
from Oil And Gas. Our Helium Payors Are Categorized Into Two Types,
Independent Payors and Our Contracts. When Contracts with Our Extraction
Plants Do Not Exist, Our Lessees Are Held Responsible For Proper Payment
of Helium Production. When Criteria Is Not Met for Settlement and We
Don\'t Apply It, That\'s When We Make Every Attempt to Jump out There
and Make Contracts with the Extraction Plants So That We Can Increase
the Revenue Position of The Federal Government. We Have Two Types of
Revenue Sources, Our Fees and Royalties. Fees Are Collected from
Extracted Helium, Which Is Reserved to the Federal Government as a
Result of the Minerals Lands Leasing Act, and Royalties Are Collected
from Leaseholds Producing from Those Old Federal Farm Mortgage
Corporation Leases. Those Usually Stress ‑‑ Are Mentioned ‑‑ the Rate in
Them Is 1/8 Royalty Rate. Our Revenues Range from 3.5 to 5 Million a
Year. And Our Last Area Is Audit. We Do Not Require Standardized Form
for ‑‑ Such as the 2014 Used by Mms. Instead, We Require a ‑‑ the
Third‑party Documentation in Support of Payments. This Provides Us with
the Total Gas Feeding the Plant, the Helium Content, Payment Rate Given
That Month and Any Other Data That We Might Need So That We Can
Accurately Audit from Our Desks at the Amarillo Office. At Present, We
Probably Have About 85% of Our Payors Audit ‑‑ In Some Type of Audit
Cycle Which Ranges Between One and Six‑year Period. By Now Most of You,
If You Don\'t Already Know the Impact of Our Work upon Your Jobs and
Your Everyday Life, You Might Have Picked up on a Few Other Points
Through the Things We\'ve Discussed, but I Would like to Mention or Go
over Two or Three Of Them Now. We Do Require, and Probable Eat Greatest
Impact on You, Is When We Request Information from You Such as Hard
Copies of the Leases and Agreements, Deeds, Patents, Mineral Plats and
That Type of Thing, We Also Request Microfiche When It\'s Available. One
Area You Might Not Have Realized but Some of You Do Express Concern, Is
When We Request Information for Areas That Have Been Identified as Low
Priority for Oil and Gas Production, but If You\'ll Remember Us Telling
You, Helium Is Based on the Helium Content Of the Gas Stream. In Those
Cases It\'s Probably That the Helium Content Is of a Level That it Is
Economic for Us. So in Those Cases We Do Appreciate Your Assisting Us in
Helping Us to Meet Our Time Deadlines. Last, Within the next Few Months
We Are Plan to Go Initiate the Writing of Regulatory Procedures To
Govern Our Helium Program. We\'re Hoping to Draw upon the Expertise of
the BLM Oil and Gas People to Help Us to Assure That The Guidance We
Establish for Helium Does Not Adversely Impact The Federal Oil and Gas
Lessees. Over the Last Eight Years, Many Of You Have Had Opportunities
to Talk with the Federal Leased Lands Folks and We Want to Express Our
Thanks to You for Your Help and Assistance. I Recently Became a Member
of New Mexico\'s Work Force Enrichment Team, and by Working In That
Capacity, It\'s Only Heightened the Realization of The Broad Diversity
of the Talents and Capabilities of BLM Employees. That Also Heightened
or Made Me Realize Even More That the Addition of the Federal Helium
Program to BLM, or Bringing in of That to BLM, Only Broadens the
Diversity of the Natural Resources Mission of BLM, and I Guess to Phrase
it Best, We Feel We\'re Home.

Chavez: Well, That\'s Really Wonderful to Hear, Jeanne, Because
Certainly It\'s Been Our Goal to Make Sure That the Employees in the
Amarillo Field Office Do Feel at Home. As a Matter of Fact, One of the
Exciting Things about Picking up The Helium Program and the Amarillo
Field Office Was That, You Know, I Have Responsibility Or Jurisdiction
for Four States, Kansas, Oklahoma, Texas and New Mexico and in the past
We\'ve Had Employees in Oklahoma and New Mexico, and Now We Have
Employees in All Four States Because We Have the Pipeline Maintenance
Crew in Kansas as Well. So We Really Do Feel like We\'re A Family and a
Region as Well. It\'s Very Exciting. You Know, I Think That Hearing What
the Helium Program Is About, a Little Bit of the History, We Can Also
Start to See Where We\'re Going with the Helium Program. I Think Our
Partnership with the National Academy of Sciences and The Work That
They\'re Doing for Us Right Now Is Going to Foster A Continued
Relationship with The Scientific Community, and Even If They Finish with
this Project, I See this Being a Real Nice Link with Our Scientific
Community, and That\'s Going to Be Exciting. There\'s No Doubt in My
Mind That We\'re Going to See New and an Interesting Uses Developed for
Helium. It Has Such Unique Characteristics That I Think ‑‑ Particularly,
like You Say, in Cryogenics, We\'re Going to ‑‑ They\'re ‑‑ There Are
Going to Be More and More Uses Developed for Helium and Some of Them
Very Likely Will Be Strategic in Nature for Our National Security. So
We\'ll Be Involved in the Process of Assessing What the Federal Role
Will Be in Terms of How Those Uses Will Be Managed In the Future.

Spisak: I Suspect Back in 1918 When They Were ‑‑ We Were Producing
Helium for Blimps and What Not, They Never Thought That Helium and
Liquid Helium Would Be Used in Cryogenic Research and Some of the
High‑tech Applications, Fiberoptic Fabrication. I Think You\'re Right,
There Are A Lot of Places Helium Will Go And Is Going Now. I Think
That\'s a Good Point.

Chavez: It\'s Going to Be an Exciting Time. It\'s Kind of Fun to Think
about Adding a New Portion to Our Concept of Multiple Use. That\'s
Exactly What this Does. It Validates the Concept of Multiple Use, and
the BLM Has Been a Dynamic Organization. We Are in the Mode of
Redefining What Multiple Use Is and Redefining Our Role in Those Uses,
and Learning as We Go, Picking up New Programs, Sending New Programs on
Their Way, Putting Them to Bed, and I Think That\'s What Makes Working
for The BLM So Exciting. We Are Always in a Learning Mode. We\'re Always
in a Point Where We Can Share Our Experiences and Our Expertise, and
Also Bring in New Perspectives. I See Things Differently in Certain
Regards Having Now Had a Little Bit of Exposure to What The Helium
Program Is All About. I Hope, Del, We\'ve Piqued Some Interest out in
Our Audience as Well. Did We Have Any Questions Coming In?

Fortner: Well, I Hope It\'s Piqued Interest as Well. We\'re Just Now
Starting Our Question‑and‑answer Session. If You Have Questions, Now
Would Be a Great Time to Send Those in Or Give Us a Call. Before We Get
Started Answering The First Question, I Have a Follow‑up Question for
Jeanne That I Wanted to Pass On. Hopefully the Viewers Have this
Question as Well. Will Mms Take over Collection of Royal Tease for
Helium like They Did Do for the Oil and Gas Leases?

Mccubbin: That Might Be an Option. Because We Are a New Program to The
Bureau of Land Management, There Will Be a Period of Time Where ‑‑ a
Learning Period. BLM Will Be Looking at Our Programs and as We Develop
Our Guidance Procedures Within the Next ‑‑ over the next Period, That
Will Be Looked At. The Feasibility, If All Four Areas of the Federal
Leased Lands Area, If the BLM Side of That Picture Is the Place for That
to Be.

Chavez: You Know, I Think We Should Also Be Very Cautious About
Something like This, Because We Want to Be Careful That We\'re, in Fact,
Comparing Apples to Apples, and Making Sure That the Processes Are, in
Fact, Similar Enough That it Makes Sense to Do That. I Think We Should
Assess That Kind of Thing Very Carefully and Make Sure That We\'re
Making a Good Business Decision If We Go That Way.

Mccubbin: I Agree.

Fortner: I Have a Faxed Question Here from Rick in New Mexico. It\'s a
Two‑part Question. So We\'ll Go Through the First Question First and
Then I\'ll Come Back to It. Helium Operations Is a National Level
Program, Rick Writes. Does the Amarillo Field Office Have to Go Through
the New Mexico State Office or Do They Have the Authority to Coordinate
Their Mission with Other BLM Offices?

Mccubbin: Michelle Probably Will Jump in Here, but We Have Been ‑‑ the
Decision ‑‑ I Am Sure this Has Been Discussed and The Decision Was Made
to Put Us Under the Umbrella of the New Mexico State Office. A Lot of
Our Activity Comes From, as We Said Earlier, Kansas, Oklahoma, Texas,
New Mexico Area, and That\'s Basically New Mexico. Because We Are a
National Program, We Do Have ‑‑ We Will Be Influenced by Policy and
Regulatory Action from the Washington Office, and We\'re Trying to
Coordinate and Work Those Things Out, Even as We Speak. But That\'s a
Real Good Question, Rick.

Chavez: You Know, We Have National Programs That Are Housed in State
Offices Around The Bureau, and I Think We Have A Lot of Experience in
Working Out Those Relationships. The Amarillo Office Has Established a
Working Relationship with BLM Offices Around the Country, and I Don\'t
Expect That to Change Very Significantly. I Think If Anything When We
Come Into Issues That Have National Significance and Have the Potential
of Getting in the Press, Clearly We Would Follow The Process We Normally
Do. But I Don\'t Think It\'s Going to Be Any Different than Any Other
National Office That\'s Housed in A State Office.

Fortner: and the Second Part Of this Question, and the Reason I Broke it
Out, Is ‑‑ What about The Mms for Off‑shore Helium Production? It\'s a
Little Different Question. It\'s the Same Question, but What About Mms
for Off‑shore Helium? Do We Have the Authority to Contact Mms Offices
and Work With Them on Off‑shore?

Mccubbin: as I Said, That\'s Usually a Question That Comes up When
People Realize That Helium Is All Natural Gas Streams. It\'s Just That
the Purity of the Helium Contained in That Determines Whether It\'s
Economic To Produce or Not. And Because We Currently Have Pretty Much a
Contained Industry, We\'re Not Looking at Off‑shore Production. Now, in
the Future, New Knows What Tomorrow Will Bring, but Certainly Is
Off‑shore Production of Helium Becomes a Fact, We Will Be Looking at the
Proper Way of Handling That.

Spisak: Also I Might Add the Helium Is Found, like We Have Been Saying,
in All Natural Gas, But in Most Natural Gases, Maybe Down to Parts per
Million, Very Low Concentrations. It\'s Not Even an Issue. That Helium
Resources Group That Does the ‑‑ That Has the Large Database of Gas
Analyses, I Mean, We Had a Pretty Good Idea Where the Helium Is, and So
We Know Where We Need to Focus Our Attention. As Far as I Know Right Now
There Isn\'t a Lot of Helium Reserves Offshore. It\'s Not an Issue at
this Point. But it Always Could Become One.

Mccubbin: Kind of a Related Thing and Skipping off Your Question, Rick,
Talking about Future Uses or Future Impacts of The Helium Program,
Helium Is Also in the Air We Breathe, and There Has Been Talk from Time
to Time from Different Researchers About Looking into the Possibility
about Finding a Way To Capture That Helium in Our Atmosphere. So
Anything Could Happen, I Guess.

Chavez: That\'s What\'s So Exciting about this Program, Is That I Think
There\'s a Whole Lot To the Future of the Program. Call it Job Security.

Fortner: Job Security. If BLM Employees Around the Bureau Get Questions
from Industry or Anything, Where Do They Go for Answers? Can You Give
Them Some Advice.

Mccubbin: I Would like to Encourage BLM Employees, If You Get a Call
about the Helium Program, to Direct to it Our Office. Either by Phone or
We Have a Website. I Believe That\'s www.nm.blm.gov. You Have to Click
on the Amarillo Field Office and Click On the Helium Program, but I
Think It\'s Quite Easy to Find Once You Get in There. Again We Would
like to Ask Everyone to Direct Those Questions to the Amarillo Helium
Team.

Fortner: Are Helium Volumes Calculated Same as Other Gases, Using Aga
Standards, Tim?

Spisak:, Yes, Almost Straight Down the Line. We Do Use the Aga 3. The
Only Difference Is the Supercompressibility Factor. That Was Determined
by Some of Our Research in the \'60s When We Knew We Were Going to Be
Doing Custody Transfer of Crude Helium, and So We Have Just a Specific
Supercompressibility Factor Calculation for It. Since Then, We Have a
Lot of ‑‑ All of Our Gas Measurement Through the Custody Transfer Points
Is Done Through a Computerized Pc‑based System and It\'s All Tied in
Through Our Phone Lines and it Downloads Automatically. When We Get in
in the Morning, We Have a Report Telling Us What Various Plants Are
Doing, and We\'re Able to Automate the Whole Billing Process All the Way
from Custody Transfer All the Way to The Bills Going out the Door. So
We\'ve Really Made Some Strides to Improve, Streamline And Ensure the
Accuracy of the Data.

Chavez: Tim, this Is Kind of Going off on Another Tangent, But My Son Is
Pursuing a Degree Geology, and He\'s Piqued My Interest as Well in
Geology. You Mentioned the Reservoir and You Mentioned Tracking the
Content or the Helium in the Reservoir, and You Talked Just a Tad about
the Geologic Structure Itself. I\'m Real Curious, How Is it We Can Keep
Something like Helium That We Test for Leaks, Keep it Contained in ‑‑
Underground?

Spisak: the Dome Structure Itself, It\'s Been There for Millions of
Years, the Assumption Is That the Structure Is Fine and it Will Work
Well. But We\'ve Poked, in Effect, 25 Holes Through It. Ok? Now, One of
the Things That We Do, We Have Some Observation Wells That Are Completed
in the Formations above It. You Have the Brown Dolomite, the Anhydryte
and the Red Cave Which Is Another Gas Bearing Formation And We\'re Able
to Sample That And It\'s Native Helium Percent Is about .6% Helium F Our
Samples All of a Sudden Show 1%, 2%, 10%, We Know There\'s a Problem.
That\'s One of the Things We Can Do. That Helium Cloud and I like to
Quote it a Little Bit, That\'s Just Kind of a Representation to Get an
Idea. Of Course, You\'re Talking about Porous Rock. When We Were at the
Bureau of Mines, People Would Say, There\'s A Big Cavern down There?
It\'s Just a Porous Rock Where Where the Gas Is All Squeezed in There
and We\'re Able to Characterize What That Rock Is, Its Porosity, Perm
Yeah Bill Tea And How the Gas Would Throw Through That. Most of the
Primary Flow Is Through Fracturing That Has Occurred over the Years. But
the Anhydryte Is a Very Nonpermeable Formation That Is ‑‑ That Has
Sealed That Gas in There. And Through Our Accounting and Sampling and
Through Our Pressure Surveys We Take, We\'re Able to Get a Pretty Good
Idea What\'s Happening down There, as Best Can You from 3500 Feet Away.

Chavez: and So You Have Extraction Wells as Well?

Spisak: We Basically Have Six Storage Wells or Injection Wells Down the
Center of the Field and We Either Produce or Inject into Out ‑‑ into or
out of Those. When We Were Talking about the Sick Lick Demands, That\'s
When It Comes in and Out. There Are Invaded Wells and Noninvaded Wells.
Depending on What We Need to Produce, We Can Produce Any Combination.
When We Were Connected to the Exell Plant Prior to it Being Shut Down,
We Produced Gas up Our 10‑inch Pipeline That Supplied Fuel Gas for That
Plant To Operate.

Chavez: So it Is a Unique Geologic Structure, but it Isn\'t A Cavern?

Spisak: No, There Isn\'t a Cavern. There Are a Loft Natural Gas Storage
Fields and They\'re Used By Gas Companies All the Time to Meet Peak
National Gas Demand North. So the Idea Is Not Particularly Unique, but
the Fact That There\'s a Large Quantity of Helium in There. And It\'s ‑‑
It\'s Probably a Bigger Storage Field than a Typical One.

Chavez: That\'s Interesting. Now I Can Explain it to My Son.

Fortner: Good Luck.

Chavez: I Think.

Fortner: We Have a Call on ‑‑ It\'s from Tim in Milwaukee. Tim, Do You
Have a Question for Us Today?

Caller: Yes, Very Informative Program, You Guys. Everything I Wanted to
Know About Helium but Was Afraid to Ask.

Fortner: How You Doing in Milwaukee Today?

Caller: Snow. Just a Question. What\'s Going to Happen to BLM\'s
Remaining Helium Reserves?

Spisak: I Guess I Will Take That One. It Is Addressed in the Helium
Privatization Act. What it Says Right Now Is No Later than 2005 and
Through 2015 The Reserve Would Be Sold off Down to 600 Million Cubic
Field. The Nas Is Studying That, Tim, Right Now and the Report Is Do Out
Probably by the End of this Year Sometime. The Legislation Specifically
Instructed the Nas to Do this Study and They Are to Make Recommendations
Back to Us or The Secretary of Interior Would Be Making Recommendations
Back To Congress to Determine Any Changes Need to Be Made. The Sale of
Reserve in the Legislation States Specifically That it Should Not Impact
the Private Industry. So It\'s Hard to Believe That If You Sell What
Would Be about 3 Billion Cubic Field of Helium, And That\'s about the
Helium Market These Days, You Put That Out on the Market, That It\'s Not
Going to Impact Private Industry. So If it Is Sold, it Will Very Likely
Been Transferred from Government Hands to Private Hands and Not Really
Be Produced Until It\'s Actually Needed. I Think the One Thing about the
Pricing Mechanism Being So High, It Serves as a Mechanism to Use Other
Helium First and Then Use This High‑priced Stuff in the Reserve Later
On.

Caller: Ok. Thank You.

Fortner: Thank You for Calling In, Tim.

Caller: All Right. Bye‑bye.

Fortner: We\'re Just about out Of Time but There Is Another Technical
Question I Would like To Pass on to Tim. I Have Been Asked this by Folks
To Ask You. How Do You Get Helium from the Natural Gas Stream?

Spisak: like We Mentioned Before, Crude Helium Is Usually Located near a
Helium Refinery, And They\'ll Put Crude Extraction Facilities near a
Large Gas Plant. I Mean, the Gas Plant Is First. It Takes All the Gas,
If There\'s Helium in it it Might Be Handling a Lot of Natural Gas And
So it Becomes to Where There Is an Economic Amount of Helium In the Gas
Stream. But Generally It\'s a Cryogenic Process Where They Successively
Cool down the Gas Stream to a Point Where Everything Else Freezes out of
it Except for Primarily Helium and Nitrogen. It\'s Usually Around a 70%
Mix of Helium‑nitrogen. It\'s Not Always That. It Does Vary. Then the
next Step May Go on ‑‑ Either ‑‑ If They Don\'t Need it Right Away, They
Can Put it into The Storage System, If They\'re Located in Such a Place.
Or They Would Refine it Further Into a Refined Product. It Could Also Be
a Cryogenic Process or a Pressure Swing Absorption Process, Which Is
Like a Mole Sieve, a Filter That Takes out Everything Except for The
Helium.

Mccubbin: I Would like to Clarify One Thing. Tim Made a Statement in
There And Sometimes it Leads to a Little Bit of Misconception. When He
Indicated That Once the Gas Has Been Processed and It\'s In the Plant,
If It\'s ‑‑ If They Determine the Content Makes it Economically Feasible
to Produce, That Sometimes ‑‑ That Sometimes Implies the Extraction
Plants Have That Right to Decide Should it Be Extracted and They
Actually Do Not. We Have to Remember That Federal Helium Comingled in
the Gas Stream Belongs to the Federal Government. So What They Have Done
Is Actually Gone out and Negotiated Gas‑gathering Contracts, Gas
Transport Contracts with the Producers out in the Field or The Lessees
Directly to Extract That, and That Shows a Problem Area We Have, Because
in the Past Those Oil and Gas Lessees Has Been Warranting Title to the
Helium, and They Don\'t Have It. So That\'s Another Reason ‑‑

Spisak: That\'s Helium Produced from Federal Lands.

Mccubbin: Yes. They Have the Right to Produce All Other but Not That
Helium Contained in That.

Fortner: Well, Our Time Is About Up. We Appreciate All the Questions And
Comments That We Received Here Today and for Those of You In the
Amarillo Office, You\'ve Just Finished Your Pizza Lunch, I Understand.
Welcome to BLM. I\'d like to Remind All Sites to Please Fax in the
Viewer Attendance Roster If You Haven\'t Already. Or You Can Report the
Viewer Information by Going to the NTC Satellite Network Website, and
That\'s at www.ntc.blm.gov/satnet. I Would like to Thank Our Group And
You a Special Will He Commend You for Taking Time to Participate in
Today\'s Program. Good‑bye from Phoenix. Announcer: to Help Your Office
Participate in Future Telecasts, See the BLM Satellite Downlink Guide
and Visit the NTC Home Page on the World Wide Web. NTC\'s Internet
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