An Unique Element with Remarkable Character
Helium is an unique element with remarkable chemical and physical characteristics which make it irreplaceable for numerous industrial and technological applications.
Helium is a colorless, odorless, tasteless, non-toxic mono-atomic noble gas which is used for various industrial uses mainly known for its most known use in balloons.
Helium is the smallest of all elements and it is known as the lighter than air gas with its lightness coming only second to hydrogen. Its stable structure with 2 protons makes it chemically inert ,and its lowest liquefication temperature and its unique resistance to freezing at temperatures lowered towards absolute zero distinguishes Helium from all other elements.
While Helium is mainly known for its use in balloons, ready to access to affordable helium is critical for various sectors in academic, private industry and government. Some examples of helium use in these industries include:
- Government agencies which critically depend on Helium include the National Aeronautics and Space Administration (NASA) and the Department of Defense (DoD).
- NASA and DoD utilize helium as a pressurizing and purging agent in rockets and depend on balloons for surveillance systems needed for weather missions and national security.
- Medical professionals depend on helium for their superconducting quantum interference devices (SQUIDS) and magnetic resonance imaging (MRI) devices.
- Scientists rely on helium from small scale cryogenic research, fiber optics to high field magnets to conduct their research.
- Helium’s thermal conductivity is vastly higher than other gasses and its ability to diffuse through solid materials make it vital for fiber optics manufacturing.
- Technologically and politically critical and technically intricate semiconductor manufacturing utilizes Helium’s inertness and high thermal conductivity.
- Welding requires helium as a shield gas due to its high ionization potential, thermal conductivity and inertness.
A Critical and Non-Renewable Resource
While its one of the most abundant resource in the universe, Helium is a scarce non-renewable resource on earth. Helium’s lightness allows it to escape into the atmosphere and beyond.
Almost all helium produced in the world and used in industrial applications are trapped beneath the earth’s surface. Natural gas producers are the primary agents of Helium production.
Due to its national security implications, its supply and storage has been tightly regulated by the U.S. government for a long time. In very early 1900s, major powers around the world have realized and became invested in the unique properties of helium, especially in its ability to be an inert lifting gas.
Realizing its natural security applications, the U.S. government tasked U.S. Bureau of Mines to study and produce Helium during World War I. The success of German military zeppelins and cold-war excitement around Helium’s use in high tech applications, rockets and more led to U.S. government establishing and enlarging a large helium supply and reserve network today known as The Federal Helium Reserve.
- Today, the Federal Helium Reserve, managed by the Bureau of Land Management (BLM) is the only significant long-term storage facility for crude helium in the world.
- While the United States has been historically the largest source of supply for Helium, a very significant portion of this supply has been satisfied through auctions of Federal Reserve.
- The Helium Privatization Act of 1996 directed that almost all the federally owned helium in the Reserve and the Federal Helium Reserve to be sold by the end of September 2021.
- As part of the Helium Privatization Act, the last federal auction was finalized in 2019.
- During the last federal auction, prices for crude helium (80% purity) reached $280/Mcf with spot prices for end-users reportedly going past $1,000/Mcf.
- The mandated sale and depletion of federal helium takes a huge portion of the global supply out of the market creating a major supply concern for the domestic and global users.
Brooks Energy as a Solution
While the Helium Privatization Act of 1996 expected private helium production to fill the gap, currently very few new guaranteed helium supply sources will come online.
New Helium projects coming online which will supply majority of the supply gap are located in geopolitically sensitive Russia and Qatar. As an example, the blockade of Qatar by Saudi Arabia and UAE started in 2017, cut off ~30% worlds helium supply, creating havoc across supply chains around the world. The official lifting of blockade in the beginning of 2021 still hasn’t fully solved the problem.
Brooks Energy is working on exploration projects to solve the supply problems and make the United States be self-sufficient in helium market.
Helium Pricing Decoupled from Natural Gas Market
