Helium prospecting picking up in north-central Montana
| December 7, 2021 7:00 AM
The Billings Gazette
BILLINGS, Mont. (AP) — Helium prospecting is picking up in north-central Montana with Canadian companies expanding south after years of development in Saskatchewan and Alberta.
Montana oil and gas records show at least two companies drilling wells in an area spanning Toole, Hill and Liberty counties. Developers say geological formations on the U.S. side of the border share similarities with areas in Canada where helium development has become part of a larger plan for long-term economic development.
"It's all goes back to geology," said Genga Nadaraju, Avanti Energy vice president of subsurface geology, told The Billings Gazette.
"Helium is the radioactive decay of uranium and thorium. It comes up from basement rock. Helium is everywhere, but in that area, there are higher concentrations of helium and the right geological conditions. We have reservoir rock, we have structure and we have a seal where you can trap it," he said.
Drilling information at the Montana Board of Oil, Gas and Conservation shows development in potential helium sites. Permit holders have six months to show the state what they're drilling for, but companies are disclosing Montana development to would-be investors.
In early November, Avanti announced plans to drill three Montana wells starting in December. The company has purchased 69,000 acres of Montana land in areas like Toole County and Sunburst, close to the Canadian border. At this point, Avanti has more owned acreage in Montana than in Southern Alberta.
Weil Group is a Virginia-based company with developments in Canada that's now developing a site north of Rudyard in Hill County. The development is near the Sweetgrass Arch, a large underground formation that has attracted oil and gas developers for nearly a century in Montana and Canada.
Thor Resources has wells permitted north of the Hi-Line between Shelby and Chester.
The developments in north-central Montana have stirred curiosity, though the state is no stranger to potential helium that didn't pan out.
"We kind of joke around here that helium is an imaginary gas because, you know, we haven't seen any of it produced yet. But there's a lot of talk, a lot of interest," said Ben Jones, Montana Board of Oil, Gas and Conservation petroleum engineer.
The New York Times in 2018 used a London-based oil and gas company's noncompetitive bids for the federal leases near Miles City to expose the government's practice of issuing contracts on public land for less than a $1.50 a year in rent, producing no revenue for the public.
Helium doesn't receive much attention in the discussion of natural resource extraction in Montana. Rarely a week goes by that the state's conservative politicians don't bark about oil development, though Montana has been more spectator than participant to North Dakota and Wyoming's meaningful developments.
But helium is in demand and the high price point favors giving Montana a serious look. The non-renewable gas is as critical as rare earth minerals in some applications. Brain scanners use helium for cooling, with magnetic imaging accounting for a third of helium consumption. It is the gas used in semiconductor manufacturing. In liquid form, helium is -452 degrees and used for cooling in nuclear reactors. It's used in missile guidance systems, welding equipment and neon lasers.
The United States has for years been the world's largest helium producer, accounting for more than 40% of production, and 52% of the word's helium reserves. That data comes from the U.S. Geological Survey.
But helium production hasn't kept up with demand for nearly two decades, as manufacturing of electronics has scaled up. That persistent helium shortage has kept prices high even as the other products like natural gas or oil have been on a market price rollercoaster.
"It used to be helium was anywhere from up to $100 mcf, per million cubic feet. In the last year and bit, I think it's shot up to about $250. It is all based on supply and demand," said Nadaraju.
In Canada, the Saskatchewan government this month issued a 10-year plan for developing a helium industry with wells and processing facilities. The province sees a niche for itself as a low-greenhouse gas source for helium.
Big producers like Russia, Qatar and the United States extract helium as a byproduct from natural gas development. But Saskatchewan pockets of helium aren't associated with natural gas. Rather, the region's helium pockets are mixed with nitrogen, which means that greenhouse gas isn't part of the deposit. The province expects that a growing helium industry could produce 10,000 new jobs by 2030.