Helium: Investments in the Future

2009-07-01T00:00:00Z (GMT) by Dennis Epple Lester B. Lave

This article develops and implements a method for evaluating an exhaustible resource (helium) whose rate of production is governed by the rate of production of a second exhaustible resource (natural gas). We determine optimum future price and consumption paths, optimal production rates from various sources, and optimal storage policies for a number of scenarios. We conduct a sensitivity analysis to find which of several possible storage policies performs best for a variety of demand growth rates and discount rates.