Demand for helium is ratcheting up, as the second most abundant element in the universe is increasingly used in all types of products, from energy to computers to health care.
General Motors says it needs the gas to properly construct its new generation of vehicle engines to make them more powerful and fuel efficient. The gas is used to test for leaks or fractures in the engines. Helium is also used in the operation of nuclear power plants, a host of military applications including missile guidance systems, steel and alloy production, spacecraft and a number of other industrial processes.
Demand for helium in magnetic resonance imaging, or MRIs, “that’s a big one,” said Art George, spokesman for Pennsylvania’s Air Products, the largest helium producer in the world. Another “big one” is the semiconductor industry, as well as analytical chemistry and spectrometry, pipeline pressurization and leak detection.
To help meet the rising demand, the federal government has been selling off the helium in its strategic reserve, which was created after World War I to keep a steady stream of the precious gas on hand for use in military aircraft, such as blimps. Helium later became integral in developing advanced guidance systems for missiles.
Air Products sees helium production as a sizable growth market and has been involved in the government’s efforts to privatize the reserve.
Only hydrogen is a more plentiful element on the periodic table than the lighter-than-air gas. However, helium is only found in scarce amounts on Earth, usually intermixed with natural gas.
Typically, it has to be drilled for in natural gas fields, using conventional gas extraction or hydraulic fracturing, or fracking, to produce it with natural gas and methane.
The federal helium reserve, located in Amarillo, Texas, produces about 40 percent of total U.S. demand. It is the only strategic reserve of helium in the world and one of the reasons the U.S. is the top global supplier of helium — the lightest substance on Earth.
The government began moving to privatize its helium reserve in the 1990s, when Congress decided private-sector demand for the gas had far exceeded federal demand for it. So a bill was passed to begin sharing the federal government’s helium bounty with private companies, with the Department of Interior generating revenue from the sale of helium. In 2014, helium sales brought in nearly $15 million to federal coffers, according to the Interior Department.
Air Products says the reserve isn’t really helium at all. George describes the gas in the reserve as “crude helium,” which is natural gas with a very high percentage of helium in it.
The company is a designated helium refiner that buys the gas from the federal government, where it processes it into a purer form.
Until a few years ago, significantly higher demand was causing helium shortages. Congress saw the strain on the reserve and passed another law to begin phasing out the reservoir.
But the shortages subsided with recent new supplies coming online from Algeria and Qatar. Both countries are considered natural gas titans, but the U.S. is still outpacing them as the top producer of helium as well as natural gas.
But other large natural gas producers, such as Russia, now may be looking to take the helium throne away from the U.S.
“The global reserves of helium are known to be approximately 41 billion cubic meters,” according to the website of Russia’s state-owned gas utility Gazprom. “Most of them lie in Qatar, Algeria, the USA and Russia. Annual global production of helium is about 175 million cubic meters, and the USA remains the largest producer.”
Gazprom says its current production rates have “only [been] about 5 million cubic meters” of helium annually, compared with recent U.S. totals that are more than 10 times that amount. But Russia expects to ramp up new capacity soon as two major helium fields in Eastern Siberia and the Russian Far East come on line. Gazprom says the fields are dense with helium.
Total helium reserves in the U.S. stand at 20.6 billion cubic meters, according to the U.S. Geologic Survey. Russian reserves are about 7 billion cubic meters. Qatar and Algeria are only comparable to the U.S. when their reserves are added together, according to the agency.
Qatar was second to the U.S. in helium production last year at 40 million cubic meters produced, compared with the United States’ 73 million cubic meters, the Geologic Survey says.
Nevertheless, lawmakers on the House science committee say the Bureau of Land Management’s mishandling of the helium reserve under a law passed in 2013 to phase it out forced U.S. helium users to buy the gas from Algeria, Qatar and Russia.
“The BLM’s misinterpretation and misapplication of the Helium Stewardship Act has driven several long-time purchasers of helium from the BLM to obtain helium from Algeria, Qatar, and Russia,” according to a House committee memo from a July 8 hearing on the reserve.
Air Products testified that BLM had unexpectedly canceled contracts, and it is in a renegotiation that is expected to conclude this week. The committee is examining the issue to understand how to fix the problem.
Meanwhile, George says Air Products is developing other sources of helium, including a novel facility in Colorado that will use naturally occurring carbon dioxide to produce the gas.
Walter Nelson, the company’s vice president and general manager of its helium business, said the Colorado plant, combined with another in Wyoming, “will replace more than 50 percent of the current BLM production as that system declines.”
