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Pipelines and Politics: Hurdles in the Global Helium Market

Gases / Industry News

Often mistaken for an atmospheric gas, Helium is the lightest element in the universe – so light that gravity cannot contain it within the earth’s atmosphere. This doesn’t mean that Helium balloons ascend into space, (they pop around 10 kilometers high) but uncontained Helium that escapes into the atmosphere will be lost forever into the vacuum of outer space.

Helium is used for more than blimps and balloons – it is present in the production of computer hard drives, mobile phone chips, high speed internet and cable TV. Not only that, but the gas deploys airbags in cars and tests seals for aerosols, tires, refrigerators, fire extinguishers and air conditioners to ensure that there are no leaks prior to sale.

Unlike any other element in the universe, Helium becomes a liquid at -452.2 degrees Fahrenheit. Because of this unique quality, there is no other gas reliable enough to run MRI machines. With the unique ability to get extremely cold without freezing, cryogenic Helium superconducts magnets a few degrees above absolute zero, making it an essential resource to the medical and science industries.

A Non-Renewable Resource

As a space gas, Helium is a non-renewable resource and the earth has a finite supply. The world uses around 8 billion cubic feet of Helium every year, and the US Department of Interior estimates that 1,169 billion cubic feet of Helium reserves remain on earth. Both natural and stockpiled, these underground reserves alone only allow for 117 years worth of global Helium usage.

Only a small number of places in the world are able to produce Helium, including the United States, Canada, Algeria, Poland, Russia, South Africa and Australia. Crude Helium can be extracted and purified from oil and gas when Nitrogen is removed. The byproduct per volume is miniscule, but plants that produce large amounts of natural gas are able to collect significant amounts that result in impressive profits.

The United States has a large storage reservoir, enrichment plant and pipeline system near Amarillo, Texas called the BLM pipeline, which supplies 40% of the domestic demand. The BLM supplies crude Helium to refining companies who then refine and sell the product to consumers. Texas, Wyoming, Kansas and Oklahoma are some of the most Helium rich locations in the world, making the United States a large global resource. The United States’ government passed a law in 1996 to sell Helium from the reserves that they had stockpiled in the 1920s. The BLM is expected to have depleted all of its resources between 2020 and 2025. Since the United States is the world’s largest consumer of Helium and will no longer have a stockpile, we must import from other countries in addition to utilizing domestic resources. One of those imports is from the small Middle Eastern country of Qatar.

As of 2016, two large plants in Ras Laffan, Qatar total 25% of the world’s supply of Helium. A third plant will commence production in 2018. The country produces such a high volume of natural gas that they are able to extract a huge byproduct of Helium. Because Qatar is a giant in the global Helium market, whenever the country is affected by politics, it affects the rest of the world. Last year, neighboring countries cut ties with the country, banning land, air and sea travel, which caused temporary plant shut-downs and increased prices of exportation. These types of scenarios are precisely the cause of Helium shortages.

An Imbalanced Market

Shortages are frequently caused by the issue of politics, maintenance and global economy. It is common to have a shortage followed by an oversupply, making the market difficult to manage. Many consumers are able to conserve their Helium usage when prices increase and access is limited. For example, many scientific laboratories have begun to install ventilation systems that trap Helium before it escapes, allowing it to be recycled.

Extreme shortages have occurred from 2006-2007, 2011-2013 and briefly in the summer of 2017 during the political crisis in Qatar. However, this trend is expected to continue, especially when the United States must find a replacement resource as the BLM runs out. When Helium shortages come, major atmospheric gas companies have to restrict Helium to their customers due to rising costs and inaccessibility.

The Importance of Partnering With a Helium Provider

Here’s the reality: The Helium industry is always going to be unreliable and inconsistent, but that doesn’t mean Rocky Mountain Air Solutions is. Our dedication to delivering flawless dependability means that we will always be loyal to those who choose to partner with us. Our customer partnerships will always come before one-time buyers, which is why it is critical that your company chooses the right atmospheric gas company to do business with. When you have signed a contract with us, we will do everything possible to make sure you get exactly what you need, when you need it.

Whether Helium is needed for balloons at a floral shop, lasers in a dentist’s office or for operating MRI machines in hospitals, Rocky Mountain Air has got you covered. Contact your local branch today in any one of our five states to learn more.

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