Was a helium well in the Utah wilderness a bust?

BLM says it came up dry, but the companies pursuing the potentially lucrative gas insist they’re still analyzing the results.

(Courtesy photo by Southern Utah Wilderness Alliance) A helium well drilled in the Labyrinth Canyon Wilderness was plugged on Feb. 26. Although the well appears to be retired, the company behind the project say it is still evaluating the quality of the gas the well yielded. Twin Bridges Resources has plans for six more wells from this site near the Green River’s Bowknot Bend.

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An exploratory well targeting a helium deposit under recently designated wilderness in Utah’s San Rafael Desert failed to produce the valuable gas and has been plugged, according to the Bureau of Land Management.

Two Denver-based companies, Twin Bridges Resources and partner Aspect Energy, had made bold predictions in court filings that their proposed Bowknot wells in Emery County would produce vast amounts of helium, an inert gas essential for scientific research, medical procedures and many other high-tech applications.

But the project’s first well, tapping a state lease in the Labyrinth Canyon Wilderness near the Green River’s Bowknot Bend, was a dry hole, Chris Conrad, BLM’s Price field office manager, told the Emery County Public Lands Council earlier this month.

That report, however, might not mean the end of a project that triggered a lawsuit from environmentalists upset with the BLM for issuing leases in this area just as Congress was about to designate it as wilderness.

The companies “have federal leases,” Conrad told the council, “and they may choose to explore those.”

For their part, company representatives deny the Bowknot well was a dry hole.

“We are still in the process of analyzing the results,” Kirby Carroll, the environmental manager for Aspect Energy, wrote in an email. Twin Bridges and Aspect formed a joint venture called Pure Helium LLC to develop Bowknot.

Carroll did not respond to emailed follow-up questions, and the companies’ next move remains unclear.

(Christopher Cherrington | The Salt Lake Tribune)

In court filings, project leaders said Pure Helium planned to spend $300,000 constructing the well pad and improving the access road. Drilling the first well would take 20 days and cost $1.3 million. Pure Helium was to spend another $1 million completing and testing the well to evaluate the gas it produces and the size of the reservoir.

“With this data, the company can establish long-term contracts,” Carroll wrote in a court declaration. “If well testing is successful, Pure Helium plans to continue the project, drilling up to six additional wells from the same well pad.”

Under a development plan approved by the BLM last year, Twin Bridges had expected to drill all seven wells horizontally from a single pad cleared out at the end of an existing road “cherry-stemmed” into the Labyrinth Canyon Wilderness. The Bowknot site is subject to a seasonal drilling closure from March 1 through August to avoid disturbing rare Mexican spotted owls while they nest.

Twin Bridges holds a federal lease and two others administered by the Utah School and Institutional Trust Land Administration, or SITLA, all of it in wilderness designated under the the Dingell Act passed by Congress two years ago. The firm holds permits to drill only its state leases.

According to the BLM, the companies have not filed for permits to drill the federal lease, which is the subject of a lawsuit brought by the Southern Utah Wilderness Alliance, or SUWA.

This federal lawsuit seeks to invalidate the leases the Trump administration issued at Bowknot and elsewhere in the San Rafael Desert, where at least four would-be helium producers snatched up oil and gas leases at bargain prices in 2018 and 2019. Bowknot is the first helium project to move forward in this region, while a company called North American Helium has secured drilling permits but has yet to begin work.

SUWA’s suit unsuccessfully sought an injunction to delay the Bowknot drilling project that commenced shortly after the court ruled in January. The work was completed over winter, and the well was plugged Feb. 26, according to the Utah Division of Oil, Gas and Mining.

A lucrative strike at Bowknot could spur a helium rush in this area south of Interstate 70, bound by the Green River on the east and State Road 10 to the west. The San Rafael Desert has seen extensive exploratory drilling for oil and gas through the years but has yet to see any production. According to BLM documents, 79 wells have been drilled here before 2016, all of them dry. Bowknot would be the 80th, said SUWA staff attorney Landon Newell.

While it was seeking permission to drill Bowknot last year, Pure Helium reported that the helium deposits here are unusually rich, nearly five times the 0.3% concentrations needed to be economically viable. In a court filing, Carroll said the Bowknot prospect could produce up to 500 million cubic feet a year, an amount that represents 8% of the current global production.

“A helium reservoir this size could meet domestic helium consumption for many years and reduce the country’s reliance on sensitive foreign sources of helium,” he wrote. Carroll predicted that an injunction against the project could cost the company more than $500 million, eliminate the possibility of dozens of high-paying jobs and nix state and federal royalties worth tens of millions of dollars.

SUWA argued these predictions were disconnected from reality.

“It turns out — unsurprisingly,” Newell said, “that Twin Bridges’ sales pitch was all sizzle, no steak.”

SITLA, though, is still holding out for some steak.

The agency, which administers 4 million acres of state-owned land and minerals for the benefit of Utah schools, is eager to see this area’s helium resources developed since it could generate a robust revenue stream. The agency’s oil and gas director, Wes Adams, said he has not been informed that the Bowknot well was a dry hole. He cautioned that the plugging may just be temporary to secure the well until Twin Bridges can resume work in September.

SUWA lawyers counter that the well appears to be permanently retired. A recent photo indicates the drill stem has been cut off.

“The well has been plugged and abandoned, not shut-in. If it had been shut-in, there would be a high-pressure gauge and all the rest installed at the well,” Newell said. “Contrast that with the metal post hammered into the ground at the Twin Bridges well site that couldn’t hold back a strong gust of wind.”