The United States has maintained international dominance in the helium production business since the first large-scale helium production facility in Texas began in 1921, less than three years after World War I. Helium was so important to the United States during and after World War I that the government took ownership of all helium produced on federal lands and that ownership continues to this day. As applications for helium continued to increase dramatically over the succeeding decades, the United States continued to be the epicenter of helium production worldwide. In 1995, President Clinton in his State of the Union address initiated the withdrawal of the government from a leading role in the helium industry, later supported by the Helium Privatization Act of 1996.
As a nation, the US is the largest consumer of helium in the world representing 32% of all demand. As domestic reserves deplete, the US will ultimately become reliant on diverse sources from Algeria, Qatar and Russia.
There is a shortage of helium. Read the quoted excerpt below.
Demand is outpacing supply
- Strong growth in all segments: government/technology/lab & research/balloon
- Bureau of Land Management (BLM) system, private crude helium sources in steep decline
- Helium production from Liquid Natural Gas reduced in some regions
- Most industrial gas companies allocating supply to customers
Lack of major new sources will worsen shortages
- Project delays for smaller new sources in the U.S. and Qatar
- Next major plant (Gazprom Amur) expected to come on-stream in 2022 – 2023
- Continued geopolitical strife causes new supply chain challenges
Rapid helium source cost increases
- Last BLM auction: +135% increase in average auction price
- Surcharges in effect from many industrial gas companies
Helium is used for more than blimps and balloons. Some examples of uses of helium (2018):
- MRI 30%
- Lifting 17%
- Laboratory/Analysis 14%
- Science/Engineering 6%
- Leak Detection 5%
- Semiconductor Manuf. 5%
- Fiber Optic Manuf. 2%
Source: Intelligas Consulting (Global Helium Summit 2018)
What is Helium Used For?
While most people simply believe helium sole use is for balloons and blimps, its importance in science, medicine and manufacturing far exceeds its use as a lifting medium.
Helium has the lowest boiling point of any element and will not solidify under normal conditions even at temperatures approaching absolute zero. These properties make helium useful as a coolant for superconducting magnets like those used in Magnetic Resonance Imaging (MRI) machines and super-colliders such as CERN’s Large Hadron Collider (LHC) which use enormous amounts of helium. Its low temperature and inert properties also make it the only gas that can pressurize and purge liquid rocket engines. Its use in MRI machines as a liquid coolant for the superconducting magnets, however, represents the largest single use for helium.
As a noble gas, helium is completely inert and will not react with any other element. This property makes it useful as a shielding agent in arc welding (to prevent contamination with the oxygen in air). This property also leads to its use in critical applications such as semiconductor and fiber optic manufacturing. In addition, it can replace nitrogen in deep water diving to prohibit the formation of nitrogen bubbles in the blood stream thereby preventing “the bends.”
Low-temperature physics studies make helium the most important element in studying super-cold conditions. Its increasing scarcity and increasing price may ultimately hamper this research, and curtail its other uses, in the near future.
Where is Helium Found?
Helium is found through the drill bit. Traditionally, helium has been produced as a byproduct of certain natural gas production mostly in the United States. Although helium is the second most abundant element in the Universe, it is actually quite rare here on Earth. Why? Because all cosmic helium was formed after the Big Bang while all helium found on Earth comes only from the radioactive decay of the heaviest natural elements, Uranium and Thorium.
It has taken billions of years for helium atoms to form from the radioactive decay of Uranium and Thorium. Most of the helium produced from this process makes its way up into the sediments where it seeps into the atmosphere and ultimately escapes into space (not even gravity can keep helium on Earth). In certain cases, some helium can become trapped and commercially produced.
Traditionally, helium has been produced as a bi-product of natural gas production. Weil Group’s focus is on helium-bearing non-hydrocarbon sources found in the mid-continent region of North America. Wells are drilled and helium is produced via a physical process called Pressure Swing Adsorption which is an economic helium processing solution that can produce ultra-pure helium.
Where in the World is Helium Produced?
The Linde Darwin plant located at Wickham Point opened for business on March 3, 2010. It is estimated that 75% of the production from this plant will be exported to customers in the Far East. In the past, Australia imported 100% of their helium from the Middle East and the United States.
The Odolanow plant in Western Poland first came online in 1977. The owner and operator of the helium plant in Odolanow is Polish Oil and Gas Company (PGNiG SA) Branch Odolanow. Output at this plant is currently 100 million cubic feet per (MMCF) per year. The Polish gas produced at the Odolanów plant contains between 0.08% to 0.45% helium.
The Orenburg plant is a relatively small plant that was first brought online in 1977. Orenburggazprom (100% subsidiary of Gazprom) is the operator of this facility just west of the town of Orenburg. The rated capacity of this plant is about 230 million ft3 per year.
RAS LAFFAN, QATAR
The Ras Laffan helium plant, located on the northeast coast of the Qatari peninsula, came online in August 2005 at a cost of US $115 million. The project is a joint venture between RasGas I, RasGas II, and Qatargas. The design and construction of the helium plant was by Air Liquide Engineering SA. Rated capacity of this plant is 660 million ft3 helium per year.
The success of the Helios Arzew plant quickly led to the construction of another facility known as the Helison plant which is a joint venture between Sonatrach (49%) and Linde (51%). This plant is located at the GL1-K LNG facility in Skikda. The joint venture agreement was reached and construction began in 2002.
The Arzew helium plant is actually closer to the smaller town of Bettioua but is commonly referred to the Arzew plant due to its proximity to the larger city. This plant, known as Helios, is a joint venture between Sonatrach (51%) and HELAPS Sa (49%). HELAPS Sa is a joint venture between Air Liquide (50%) and Air Products (50%). The Helios plant is situated at the Arzew GL2-Z Liquefied Natural Gas (LNG) complex.