The need for helium is growing and supplies in the United States are dwindling, creating an economic opportunity for geoscientists whose knowledge and skills are ideal for this niche industry.
In Arizona, known for its helium-rich formations, a growing number of companies are leasing land and drilling for the gas, which is used in MRI machines to cool magnets, in rocket boosters as a displacement gas, in military applications and in weather balloons.
However, its application in the tech industry constitutes a robust need, as helium is required to manufacture semiconductors for computer chips in a pure environment. In fact, the demand for the gas is so great that some helium producers are loading the product on transport trailers straight out of the processing plant to end users.
Much of the nation’s helium has been produced alongside natural gas. However, as the need for helium increases, gaps in the market are forming, prompting some to sole-source the gas in Arizona and the Four Corners area.
“It’s a new and uprising industry that has potential for a lot of prospects in the future,” said James Hayes, vice president of Engineering for Desert Mountain Energy, a company that launched in 2008 to produce helium.
Hayes, who once worked in the oil and gas industry, said his experience has enabled him to better prospect for and produce helium in Arizona.
“If you are looking for wells or companies that are primarily sourcing for helium, the Holbrook basin is kind of the hot topic,” Hayes said.
The job does not come without challenges. Those new to the Holbrook basin must figure out how to drill in unconsolidated formations and through thick aquifers as well as procure equipment in remote, non-hydrocarbon producing areas.
A lack of well control is also an issue. In fact, the CEO of DME, Robert Rohlfing, began his foray into the Holbrook basin by hand-mapping an area near Winslow, Ariz. and using logs from water wells drilled in the 1950s – paying close attention to anticlines, domes and subsurface highs.
“That’s how we were piecing things together initially,” said Jessica Davey, a geologist and vice president of Land at DME. “It’s using old-school prospecting techniques.”
Just as in oil and gas, prospectors search for targets, reservoirs and geologic traps where gas can be captured. As Davey continues to evaluate formations in advance of a planned 2-D seismic acquisition, DME has drilled eight producing wells, is completing an on-site processing plant and perfecting the purity of the gas to be sold to the U.S. government and local tech companies.
“It’s a niche market,” Hayes said, “and it’s not going away.”
History of Helium
The United States has been the top producer of helium in the world since the Helium Act of 1925, which authorized the conservation, production and exploitation of helium gas for purposes of national defense and commercial aeronautics. The majority of helium was used for blimps during World War I and stored in an underground facility in Cliffside, Texas. The Helium Act Amendments of 1960 privatized the industry to enhance production and keep government supplies plentiful.
Private companies began producing helium – a byproduct of uranium and thorium decay – in Arizona in 1961 primarily in the Pinta Dome and Navajo Springs fields. Both produced more than 700 million cubic feet – valued at $200 million in today’s dollars, explained Kurt Constenius, an exploration geophysicist in a May 2022 presentation to the Arizona Geological Survey that was published on YouTube.
The helium came from the Permian Coconino formation, an aeolian sandstone with promising reservoir properties, high resistivity and high salinity. Noting an “unusual” feature in the Coconino that he described as a hydrodynamic tilt on the gas-water contact, Constenius explained that the tilt displaced a gas cap from the crest of the dome and pushed it down-dip to the north, where the thickest accumulation of gas has been found in the field.
“Many helium fields are subject to hydrodynamics, so it leads you to wonder if there is some relationship between groundwater flow and the enrichment of helium in a gas,” he said.
In the 1960s and 1970s, concentrations of helium from Pinta Dome and Navajo Springs were as high as 10 percent – with an average of 8 percent – making it some of the richest helium-bearing gas ever produced, according to a 2003 publication of Steven L. Rauzi, the former oil and gas administrator of the Arizona Geological Survey.
In 1950, the Kipling Petroleum Company discovered gas on Pinta Dome in the Permian Coconino sandstone. When the operators found that the gas would not burn they concluded it was worthless and allowed the well to blow wide open for four to five weeks. The well reportedly flowed inert gas at an “enormous” rate of 24 million cubic feet per day, said Andrew Payton, an exploration geologist and consultant for several companies active in the area.
The gas was later determined to be helium, and the U.S. Bureau of Mines ordered the well to be shut in. In today’s helium market, the initial gas vented to the atmosphere would be worth millions, Payton said.
Helium remained a sought-after resource in Arizona until 1972. At that time, NASA had completed its Apollo moon missions and the Nixon administration cancelled all government contracts with helium suppliers. Wells were capped off, and the helium industry in Arizona went bust.
However, as helium supplies in the Cliffside storage facility continue to deplete and new uses for helium continue to evolve, a new supply-and-demand equation has fueled a comeback of the industry in the state.
Drilling for Helium
In the last 10 years, exploration and production companies have successfully found and produced additional helium in the Pinta Dome and Navajo Springs fields left behind by the original operators. Depending on its grade of purity, the gas is valued between $20 to $1,500 per thousand cubic feet, according to Hayes.
In addition to the Coconino formation, modern companies in the region are also prospecting in the Triassic Shinarump formation – a promising, yet highly heterogeneous fluvial reservoir.
“It’s an ancient, braided river system with up to three sand or conglomerate intervals in most areas. Due to the nature of deposition, with channels coming and going, it can be challenging to drill and explore for successfully,” Payton explained. “You can find a lot of gas in one location and move over as little as 1,000 feet and not find much of anything.”
In the Pinta Dome and Navajo Springs region, early exploration efforts targeting the Shinarump involve twinning historical show wells combined with down-spaced drilling on select 40-acre tracts. Companies have seen about a 50 percent success rate in the Shinarump, yet hope to increase that statistic as more drilling and experience with the formation illuminate critical aspects key to making the play work, Payton said.
In the Coconico and Shinarump formations, helium producers typically drill with air using large air compressors. Air has a faster penetration rate and eliminates the need for casing and then production testing – as producers test while drilling.
However, access to drilling equipment can be a challenge. Hayes procures equipment from California and New Mexico and then trains local companies to operate the machinery. He relies on mass spectrometer live feeds while drilling to identify and record points of interest.
“The Blue Mesa shale just above the Shinarump is very sensitive to water. If you get any water in that zone, the well will begin to collapse very rapidly,” Constenius said. “Typically in conventional drilling using mud, you would drill through the Shinarump, run a set of logs, understand where you need to perforate – you have to cement that casing in, obviously – and then perforate it. It is a four-step process. With air drilling, the driller just turns off the air compressor and the gas comes to the surface and we can measure the flow rate.”
“The geoscientists have to guide the drillers, and that requires close coordination. In place of electric logs in this low-tech scheme, they have five-gallon buckets of water and sieves for the samples, and the interpretation of the cuttings guides decision making,” he added.
Targeting Permian-aged formations outside of Pinta Dome and Navajo Springs, Hayes said the abundant aquifers in the area have posed drilling challenges.
“Once we hit our water sections, we will drill through them as quickly as possible to get them cased off and isolated,” he said, noting that his former experience of having to quickly drill through permafrost in Alaska has been helpful in Arizona.
“One of the challenges we had in this area was very unconsolidated and porous formations in our cementing practices. They want to collapse. We had a lot of issues getting cement to surface and yielded quite a bit of cement that was pumped. We teamed up with our local cementing company and developed a stop loss spacer – a non-hazardous and environmentally friendly spacer – which essentially plugs up those pore spaces, and once we established that we have really been doing well in that area.”
Desert Mountain Energy is currently completing a modular, on-site processing facility that uses pressure swing absorption membrane technology to separate gases. Hairlike membranes act as filters for the gases flowing through them at specific temperatures and pressures. Large molecules flow at slower rates than small molecules.
“There are quite a few different stages of filtering that we go through to produce the specific grade of helium we need,” Hayes said. “I actually have an onboard testing unit that can measure the purity levels so I can quantify that I am reaching the (targeted) grade requirements. The higher the grade, the slower the processing.”
Rather than being stored, the helium is transported by trailer immediately to market.
“Most of our end users are within about 300 miles of our plant, which is relatively economic,” Hayes said.
Storing helium would pose logistical and economic problems. Once helium is produced, there is no available equipment that is technically certified to hold a molecule that small, Hayes explained. “We are continuously losing it. Helium permeates through steel and through valves. It’s very difficult to contain. It’s a small and slow decay, but it’s very real.”
Challenges aside, the demand for helium continues to draw new interest in Arizona. Payton believes there are six to 10 companies that have proper funding to search for helium in the Holbrook basin.
“Companies have leased hundreds of thousands of acres in this basin, but I think it’s one thing to talk big about what might be there and another to produce and make a profit from it,” he said. “In the headlines, we are seeing more about the helium need and shortage. It’s probably inevitable that at some point, with enough renewed interest, some companies will find large and yet-unknown resources, but that takes a lot of effort and a fair number of dry holes drilled along the way.”