‘Not a fossil fuel’: Oil & gas moves forward with helium proposal
Navajo Nation Oil and Gas reported on Monday that it will be seeking approval by the Navajo Nation Council of three helium development operating agreements that, if successful, could generate $250 to $300 million in economic benefit to the Nation over the next 10 years.
The three agreements, for which legislation is currently being drafted, encompass three proposed development sites in two chapters: Tohache Wash near Teec Nos Pos, and Beautiful Mountain and Porcupine Dome near Sanostee.
NOG has worked with the Minerals Department and Department of Justice to develop the agreements, which have supporting resolutions both from Teec Nos Pos and Sanostee chapters, according to NOG Board Chairman Lennard Eltsosie.
“We want to ensure all committee members and Council members are familiar with the context on helium and what NOG’s development strategy is,” NOG CEO James McClure told the Law and Order Committee. “The key message we’re trying to stress is that helium is not a fossil fuel.”
Helium gas is created deep in the mantle of the earth and is often confused with “oil and gas” because it is explored in the same way, but it has zero carbon emissions.
Helium is not used for energy production, but as a coolant. As an inert gas, helium makes for a uniquely powerful heat absorber and purging agent. It is non-flammable, non-combustible, odorless, tasteless, and is found naturally in earth’s atmosphere.
“Helium has been constantly emitted from the earth since the earth’s birth,” McClure said. “What we’re trying to do is search for trapped helium, produce it to the surface and then market it.”
McClure said the Navajo Nation is blessed with some of the richest helium deposits in the world.
And, because helium is in short supply worldwide and is required to support several critical industries that impact humanity, there is high demand for it.
While many know helium’s uses for party and weather balloons, it is a key product used in applications that require cooling or purging agents, as in the medical, semiconductor, and aerospace industries, from Magnetic Resonance Imaging scanners, laser technology, computers, solar cells, to rocket launching systems and manned flights to outer space.
In fact, many of these vital technologies could not work without essential helium, which guarantees a market for it.
Helium is also used in scientific research as an atmospheric stabilizer to prevent unwanted reactions.
With the high concentrations of helium on Navajo at about 7% to 8% of the gas stream McClure said that “medical grade” helium is primarily what NOG is pursuing.
He said another benefit of helium is that deposits in the subsurface tend to be small and can be developed with a low number of wells, therefore using a small footprint of land for a relatively short duration for extraction.
“It’s not the Aneth Oil Field,” said McClure. “We anticipate the wells will be short-lived, so community impact should be short in tenure.”
In the past many helium discoveries have come about accidentally as a by-product of oil and gas exploration.
“Most of the helium that we’ve had here on the Navajo Nation has been from old oil and gas production where they also identified helium as an opportunity,” he said.
Current activity by other companies developing helium on Navajo have focused on producing the helium remaining in these old wells from the 1940-1960s, he added.
“For the most part, NOG is trying to pursue an exploration program to identify new resources of helium outside of oil and gas fields,” he said.
This process includes geologic assessments through surface soil sampling, aerial studies, and seismic surveys to identify where surface soil shows high quantities of helium.
Once that is complete, the next phase involves drilling operations to provide a pathway for production of helium.
Since helium, lighter than air, rises to the surface with other gasses, there are no high-pressure lines involved, and there is no soil contamination from the process.
Then pipeline and facility work take place to process gas and separate helium from other gases for sale and then transport to market.
This will continue during the economic life of the helium, which can be several years, he said.
So far NOG has identified 37 potential helium deposit prospects, which in McClure’s opinion is just “scratching the surface” of the amount of helium that is available.
“We feel like there’s a significant amount of potential on the Navajo Nation and we’re using all these different technical options to identify additional prospects, which if successful, should be quite lucrative for the Navajo Nation,” he said.
In terms of financial benefits to the Navajo Nation, the proposed operating agreements call for initially for an upfront bonus to be paid to the Navajo Nation by NOG.
“If we’re successful, there would be scholarships, rental payments during exploration phase, and ultimately with production comes royalty and payment in lieu of tax,” said McClure.
At 20% and 5%, respectively, McClure says those rates are competitive with agreements off Navajo.
NOG will also offer a 1% profit share to chapters to support community development projects.
“As an entity of the Navajo Nation, we see ourselves as an ideal partner for the local chapters and communities,” said McClure. “We’re going to listen to concerns and address issues, which is part of the commitment and mission of the company.”
The proposed helium development will also provide contract labor opportunities during well and facility construction as well as field operations positions, contributing to job creation and economic development for the communities involved, he said.