Uncertainty and the joint extraction of helium and natural gas

Abstract

In this paper a model of joint natural resources is developed in order to examine particular aspects of the helium industry. The importance of helium demand for the equilibria in the markets for natural gas and helium, the joint resources, is analyzed. This analysis is pursued under both conditions of certainty and helium demand uncertainty. A modified Hotelling rule is derived under conditions of uncertainty in the timing of demand for the residual resource.