The Helium Conundrum (6)

Yet Clinton’s 1996 Helium Act called for the sell-off of the Cliffside facility’s gas and its closure by 2015—deepening the industry’s crisis. “In 2013,” noted Clara Piccirillo, on the Decoded Science website, “helium production was in serious danger, due to the threatened closure of the…Reserve”.

Impacting helium production as well, has been the sale of Cliffside gas at below market prices. In 2011, for instance, the U.S. Bureau of Land Management reportedly sold crude helium at $2.70 per cubic meter, while corporations charged their customers $6.00.

That price, observed Money Box blogger, Mathew Yglesias, is “encouraging overconsumption of helium, discouraging new helium production, and all-in-all creating a big helium shortage”.

Further complicating matters, especially in the first decade after the Privatization Act, were production hitches in Algeria, problems at several U.S. facilities and the growing demands of hi-tech, helium dependent industries in eastern Asia.

“For the last ten years,” Physics Today observed, in June, 20007, “groups around the U.S…. have been predicting that a severe shortage of the gas…would emerge early in the 21st century”.

Like any other shortage, the helium crunch sent end-user prices spiraling upwards: So much so, the magazine reports, that some helium suppliers, such as Britain’s BOC Gases, were forced to impose quotas on buyers.

Customarily, helium is used to fill party balloons. But some producers put balloon companies off, in favour of industrial, scientific and strategic users. Indeed, prognostications are that, when the helium market finds its true level, the cost of inflating a toy balloon could reach $100!

Two years ago, the U.S. Congress backed down on its 2015 closure date and passed the Helium Stewardship Act (HSA), extending the Federal Reserve’s life to 2021. The improved supplies impacted positively on the industry, it appears, and helped to make 2014 a better year for helium.

In her Decoded Science “Update,” Piccirillo reported a rise in world production which, for refined helium, “grew from 231 million liters (2013) to about 286 million liters (2014)”. But while HSA contributed to the upturn, so too, Webb and De Beaupuy aver, did new sources—especially in Qatar.

“Last year,” they wrote, in July, 2014, “Air Liquide started up the world’s largest helium purification and liquefaction unit… in Qatar…That tripled the kingdom’s capacity and made it the world’s second-largest producer of the gas”.

According to Piccirillo, Qatar’s production increased from about 26.5 million liters in 2013 to roughly 75.2 million liters in 2014—which gave it 14% of world production. Only the U.S.A. pipes out more helium.

Meanwhile, Gazprom insists that “Russia has all the makings to become a major helium producer and supplier on the global market”. Behind its boast, are prospective helium-producing natural gas fields at Kovykta and Chayanda, as well as other deposits in Eastern Siberia and the Far East.

Webb and De Beaupuy project that Iran too, is destined to become a major helium player, possibly within the decade—since Qater’s huge north gas field extend into that country and probably contains similar amounts of helium.

Left out of the picture entirely, is Nigeria, whose massive methane reserves must surely contain some associated helium. Whether the concentration is rich enough to exploit (or is already being exploited), I cannot say: Because I was unable to find any documentation on the Internet.

In as much as President Buhari is a former Petroleum Minister, the helium issue may well be high on the national agenda. If not it, it should be. Analysts generally agree that, despite production increases, the world helium situation remains critical: Creating a possible window of opportunity, for Nigeria.