Sanctions, Plant Maintenance, and How We Reached Helium Shortage 4.0
What the atmospheric gas industry is calling Helium Shortage 4.0, marks the most recent shortage trend in the helium supply chain struggle. Between limited resources, political conflicts, and plant maintenance, dramatic disruptions in the global helium supply have been occurring on and off for the past 16 years. Helium shortage 3.0, beginning in 2019, began its recovery when the pandemic slowed helium demand, allowing the market to catch back up. At the time, helium demands dropped as much as 15 percent.
The prospects for the market overall held a promising future, as multiple processing plants were scheduled to come online in 2021, in Russia, Qatar, and Algeria. Now, in 2022, global helium is reeling after two of the world’s largest resources – in the US and Russia – were taken offline. The Russian invasion in Ukraine has also created controversy for the helium market with the introduction of economic sanctions preventing trade with the country.
Here in the United States, we have also seen the ripple effects of offline plants, as our own federal reserve was down for scheduled maintenance a third of last year. With such limited geography of where to find this universal gas, the market is too fragile for even one facility to shut down, let alone three within months of each other. Here is what the landscape has looked like for the top three continental producers.
Russia’s Newest Helium Plant: Setbacks and Sanctions
Prior to the Russian invasion, there were hopeful prospects for global helium with the opening of a new processing plant in Eastern Siberia called the Gazprom Amur, containing three facilities. This was to be the largest helium operation in the world, able to supplement up to 30 percent of the globe’s helium.
Historically, Russia has only been a minor supplier of helium, producing five percent of the world’s product. The 30 percent they expected to export with the onboarding of the Gazprom Amur, however, has not gone according to plan. In the past six months, the plant has been plagued with fires, a minor explosion, and now economic sanctions.
For the remainder of 2022, Russia will be out of commission on the helium front. A political explosion has presented continued unprecedented circumstances for the rest of the world, mainly Ukraine. Russia, a large exporter of oil across the globe (which works in conjunction with helium extraction) has been blocked by the US, UK, and Poland, with other countries to follow. Several large atmospheric gas companies have blocked business with Russia for the time being.
The experts at gasworld estimate that Helium Shortage 4.0 could end sometime between 2023 and 2024 if two of the three Gazprom Amur facilities reach their full production next year. For now, helium will have to be imported from elsewhere.
The Global Supply: North America
So where else is helium found in the world? The United States and Canada have the ability to harvest helium deep beneath the earth’s crust, drilling deep wells to reach subterranean reserves during the extraction of natural gas.
The US Bureau of Land Management (BLM) is a helium reserve near Amarillo, Texas, that historically been one of the top exporters of helium in the world. Since fall 2021, the government has been selling parts of the reserve to private owners, as it hopes to exit the helium business on a federal level, which will bring more jobs for Americans. It was scheduled for maintenance last fall, but on July 1, 2021, the BLM went offline early, with repairs taking place for four months. It is now back online, but its supply is only expected to last another four years.
Saskatchewan, Canada has high hopes of becoming one of the world leaders in the helium industry, occupying ten percent within the next eight years. The US shares this hope regarding the efficiency of a continental ally rather than Russian helium. Saskatchewan is developing helium reserves to store in wells beneath the earth. The project includes increased jobs, economic benefits, and construction of up to 15 new purification and liquification manufacturing facilities.
But if Canada cannot pull through, which countries are among the remaining helium suppliers?
African and The Middle Eastern Helium Supplies
Up until the construction and onboarding of the Gazprom Amur, Qatar was the world’s largest helium producer. If operations are all running smoothly, the small Middle Eastern country could supply around 35 percent of the global supply across three plants. The country produces such a high volume of natural gas that they can feasibly extract helium as a byproduct.
Qatar is down for scheduled maintenance in spring 2022, which again, can take months to complete. In 2017, the country rocked the stability of the helium market when its gulf was closed for exports during a political conflict with neighboring Saudi Arabia. Between politics and maintenance shutdowns, the market is constantly on thin ice.
Aside from Qatar, Northern Africa has an impressive plant in Algeria. Algeria has high geological deposits of elements, minerals, and natural gas. As the trend of the past year has gone, as of March 2022, it was also taken offline for unplanned maintenance. The shutdown was a consequence of reallocating efforts to export natural gas to Europe after the Russian invasion.
Africa and the Middle East are an important resource to China and Taiwan, which are leading producers of semiconductor chips. The semiconductor chip shortage of 2020 will be in for double the hurt considering helium is a necessary element for manufacturing. With natural gas production and exports taking precedence over helium extraction, it is going to take plants coming back online, as well as the de-escalation of the Russian/Ukrainian war to get helium production back on track.
The consecutive, unpredictable disruptions have increased the price of helium by upward 20 percent this year.
Helium Suppliers in the Western United States
Numerous essential goods and services that rely on helium for manufacturing. The spheres of science, technology, and medicine all rely on helium’s subzero temperature and inert properties for MRI machines, semiconductor chips, airbag production, scientific lab work, and rocket fuel tank maintenance. Each of these industries improve our overall quality of life, and atmospheric gas distribution companies are dedicated to doing their part to keep them running.
Rocky Mountain Air Solutions is a distributor of helium in Colorado, Wyoming, Idaho, Utah, and Nebraska. For now, our helium distribution capabilities remain the same, but prices on the market fluctuate day by day. For the short term, our customers may not be affected by Helium Shortage 4.0, but as the shortage continues, know that we are always prepared to serve our partners with flawless dependability. While we can serve outside of our customer base and outside of our region, we prioritize our ongoing partnerships. When a shortage strikes, it is always a good idea to be prepared by signing a contract with an atmospheric gas distributor who will assist you in moving your business forward.
For questions regarding helium costs, cryogenic usage needs, or if you’d like to partner with Rocky Mountain Air Solutions as your helium supplier, please contact your local branch today. We look forward to serving you!
