Sunday, May 19, 2019

Helium is a finite resource—who knew?

Almost precisely 10 years ago I wrote about the likelihood of a shortage of helium in the not-to-distant future in a piece entitled "Let's party 'til the helium's gone." Last week worries about a helium shortage appeared in my news feed. It seems that we are indeed going to party 'til the helium's gone as no steps that I know of have been taken to avert the inevitable shortage.

That the shortage comes as a surprise results from a certain scientific illiteracy about the makeup of the universe and the geology of the planet. More on that later.

It also results from a peculiar type of economic thinking that is pervasive today that states that when shortages occur of any commodity, prices will rise to incentivize exploitation of previously uneconomical resources and automatically solve the problem. This intellectually lazy pronouncement does not consider whether the new supplies will be affordable. (As I pointed out in another piece about helium in 2013, "Things do not have to run out to become unavailable.")

The same lazy, unreflective line of thought cited above also asserts that if we "run out" of a particular commodity (or it becomes unaffordable which is the same thing and more likely), we will always find substitutes precisely when we need them in quantities we require at prices we can afford.

As I pointed out in my piece 10 years ago, there are likely to be no comparable substitutes for helium because liquid helium allows for maintaining temperatures near absolute zero (−459.67 degree F). These temperatures are essential for certain industrial, medical and research processes.

Magnetic resonance imaging used in medical diagnosis depends on helium. Helium is especially useful for superconductivity applications and research. Superconductivity is the ability of a substance to carry far more electric current at very cold temperatures. Helium is also critical in the manufacture of silicon wafers which are central to modern electronics including computers and cellphones. Given these and other critical uses, one would think that governments would step in to restrict the use of helium for nonessential uses such as party balloons. But that would require a repudiation of the flawed thinking guiding most of our economic policy.

Returning now to the uncompromising universe and planet we inhabit, let's review why the economic thinking cited above will not help us much with helium. First, helium is an element not a compound. It cannot be synthesized from other more abundant substances. Second, even though helium is the second most abundant element in the universe—hydrogen is the first—helium is exceedingly rare on Earth.

Helium is formed by the decay of radioactive elements in the Earth's crust. The helium then begins an upward journey that most often ends as it leaves the Earth's atmosphere and escapes into outer space. A small amount is trapped in natural gas reservoirs. Helium is separated from natural gas in a processing plant. But few natural gas reservoirs contain concentrations of helium high enough to make them economical to separate.

So, here is something that almost no one is discussing about helium supplies: Helium extraction will almost certainly peak when production from the natural gas reservoirs containing economical amounts of helium peaks. Most of the world's helium currently comes from long-ago discovered natural gas fields in the United States which are nearer to the end of their production life than the beginning. Some comes from Qatar and Algeria, both large natural gas producers.

Unless new natural gas fields containing economical amounts of helium are found soon—or one company prospecting for economical deposits of helium mixed with non-hydrocarbon gases succeeds in a big way—helium supplies are likely to begin a long, irreversible decline. Keep in mind that no one prospects for natural gas in order to extract the helium from it. Thus natural gas production largely dictates what helium gets produced. I am therefore skeptical that either new source mentioned above will prove decisive in averting such a decline.

There are many other rare elements—such as indium, gallium and tantalum used in cellphones and other electronics—upon which our modern infrastructure depends. The emerging story of helium suggests that we will NOT always find substitutes precisely when we need them in quantities we require at prices we can afford for such critical and rare materials. And, we as a society have not figured out what it will mean when we don't.

Kurt Cobb is a freelance writer and communications consultant who writes frequently about energy and environment. His work has appeared in The Christian Science Monitor, Resilience, Common Dreams, Le Monde Diplomatique, Oilprice.com, OilVoice, TalkMarkets, Investing.com, Business Insider and many other places. He is the author of an oil-themed novel entitled Prelude and has a widely followed blog called Resource Insights. He is currently a fellow of the Arthur Morgan Institute for Community Solutions. He can be contacted at kurtcobb2001@yahoo.com.

7 comments:

shastatodd said...

despite legitimate, scientific warnings, humans seem to dismiss concerns about the future, in favor today's party of ignorance and wishful thinking. of course this is unwise and won't end well, but it is a sad reality.

look at the legitimate concerns of the depletion of vital, non-renewable resources like hydrocarbons which power everything, or the destruction of our climate and ecosystem, over population or the economic insolvency of our current behavior.

it seems that despite the scientific reality, and our ability to predict unfolding problems, human yeast prefer to rapaciously and nonsensically create our own extinction... while promoting magical thinking as a "solution".

i shake my head in disbelief, yet being concerned about obviously nonsensical human behavior only ruins my day, so i try to enjoy these remaining good days while building resiliency into my life because it is 100% certain, this will not end well.

Yanzibit said...

I wish you had included some hard data on the demand and supply situation, and how it has evolved over the years. Since you highlighted the problem in 2009 and again in 2013 we seem to still not be in an emergency now, ten years later.

Captain Nemo said...

So true! Depletion of non-renewable resources is a real risk from oil/gas to helium and rare metals. I agree with shastatodd that being concerned about obviously short-sighted, nonsensical and self-destructive human behavior only ruins our day. The best we can do is try to enjoy these remaining good days, building resiliency into our life and vote, vote, vote for candidates who "believe" facts and can make a difference for the future of our planet.

Unknown said...

Thanks for this. As you rightly point out, most people seem to think cobalt and other critical materials are abundant, if not infinite. So we have 100%RE scenarios that don’t even mention the need for strategic use, maximizing kg/kWh. That’s unnerving, as RE prices may hit a wall of material constraints, NIMBY against new mines, etc.

Mark Robinowitz said...

As the enemy drew nearer Moscow, instead of the Muscovites' view of their situation growing more serious, it became more frivolous, as is always the case with people who see a great danger approaching. At the threat of danger there are always two voices that speak with equal power in the human soul: one quite reasonably tells a man to consider the nature of the danger and the means of averting it; the other still more reasonably, says that it is too depressing and painful to think of the danger, since it is not in man's power to foresee everything and escape from the general march of events, and it is therefore better to disregard what is painful till it comes, and think about what is pleasant.
--Leo Tolstoy, War and Peace

Anonymous said...

It's possible to extract helium from air but the cost is ~5-10 times more than current market price (which is already high by historical standards).

Any idea what "helium one's" production cost is? Or their N. American competitors? I can't find any details.

Kurt Cobb said...

Helium One is not extracting any helium. The company is merely exploring for possible reservoirs (typically containing carbon dioxide and/or nitrogen trapped by formations similar to those that trap natural gas). The company believes it has found a substantial resource in Tanzania. I wish them success. But I am skeptical that they will be able to extract helium and refine it at a competitive cost. On the other hand, what "competitive cost" means may ratchet upwards considerably in the years ahead, making it easier to justify the needed infrastructure expenditure which is considerable. The problem that has been dogging those few entrepreneurs who are looking to capitalize on the rising price of helium is whether the significant stores still available from the U.S. helium reserve will be auctioned in a way that drags the price down. It's hard to get long-term investors interested when the long-term price looks subject to periodic downward pressure from an existing reserve.

It may be many more years before greater price certainty lures investors into the helium market. By that time, I'm sensing that we will be on a downward supply trajectory that will be hard to recover from.