Coal miners for much of the last century—until the introduction of modern monitoring devices in the 1980s—brought canaries into mines. They did so because these birds are extraordinarily susceptible to the presence of carbon monoxide, a deadly, odorless gas the build-up of which continually threatens death to coal miners. When the canaries stopped singing, miners knew something was wrong and that it was time to evacuate quickly.
Today, helium (the gaseous element, not the cryptocurrency) is in the headlines because there is an acute shortage. I first called attention to a coming helium shortage back in 2009 with a piece entitled "Let's party 'til the helium's gone." It appears that that is precisely what global society has done in the 13 years since.
The story of helium is a cautionary tale for it has provided a canary-like signal for many years that all was not well with our way life. I once more wrote about mounting troubles in the helium market in 2013 and again in 2019. For each and every resource, we as a society have assumed that we will always find the substitutes we need in the quantities we require at the prices we can afford by the time we need them. We are now testing that belief with regard to helium and other materials such as certain rare earth elements which are used in a wide variety of modern technologies such as consumer and military electronics and alternative energy equipment.
Helium is emblematic of the resource problem we face. First, helium is an element. As such, it cannot be manufactured from other more abundant elements or substances. It must be found and extracted and finding it is becoming increasingly difficult. Above all, it is rare and finite in its supply on Earth.
Second, helium is critical for several applications which require extremely low-temperature environments such as magnetic resonance imaging machines and other systems requiring the superconductivity that can only be achieved at the low temperatures provided by liquid helium (minus 452 degrees F). As a gas it is used extensively for protection (in lieu of air) during the growing of silicon crystals needed for silicon wafers used in semiconductors. Helium gas also protects surfaces from interacting with the atmosphere during certain kinds of welding.
Probably helium's most visible uses are lighter-than-air ships or blimps and party balloons. Given the growing shortage of helium, this last use seems problematic as there is no way to recycle the helium used in balloons. For a more complete list of applications including short explanations, check this page.
It's not going to be easy to find ready substitutes for helium. For processes requiring temperatures below minus 429 degrees F there is simply no substitute.
So, how did we get to this point with helium supplies? First, for a long time the U.S. government dominated the helium business worldwide through its Federal Helium Program (FHP) which gathered and stored the lion's share of the world's helium. The federal government considered helium to be a natural resource critical to national security.
In 1996 Congress directed the Federal Helium Program to sell off most of its stockpile and in 2013 decided to get out of the helium business altogether (though this has yet to happen). Essentially, the government has decided to privatize its remaining helium storage and pipeline infrastructure and let the marketplace provide helium to consumers of all types.
When Congress directed the FHP to speed up sale of its remaining helium supplies, the program lowered prices. This made it difficult for private companies to attract investment capital into the helium business. Since the FHP helium auctions ended in 2018, prices have popped up though it is hard to say exactly how much since there is no central exchange in which helium is traded.
The U.S. Geological Survey estimates that helium imported into the United States in 2016 sold for $78 per thousand cubic feet (mcf), comparable to today's private industry price. The private industry price today is estimated to be $210 per mcf. (Compare that to the closing futures price of U.S. natural gas last week of just over $8 per mcf.)
Almost all of the world's helium comes from natural gas reservoirs, many of which were discovered and developed decades ago. While helium occurs in most natural gas reservoirs, it only occurs in concentrations economical enough to separate in a tiny percentage of them. Unless there are dramatic new finds of natural gas with significant and economical concentrations of helium in them, helium supplies are likely to peak when the current natural gas fields that produce them do. Moreover, the remaining reserves are overwhelmingly concentrated in four places, the United States, Algeria, Qatar and Russia (all large natural gas producers).
It is true that private companies are now looking for ways to harvest more helium from existing natural gas reservoirs. And, some companies are even prospecting for helium looking for non-traditional underground reservoirs that may hold large amounts of helium mixed with carbon dioxide and other gases. The logistics of building a gathering system of pipelines, underground storage reservoirs and processing facilities that purify the gas to the current standard—Grade A helium is 99.997 percent pure—in places which have no infrastructure to start with is daunting. Even if these efforts succeed, the decline in supply from existing sources may overwhelm the quantities coming from these new and costly sources.
Today, helium just seems like one more natural resource that is in short supply. The expectation is that these shortages are temporary and will abate over time. This expectation may be unwarranted for a number of reasons. First, climate change will continue to worsen and create floods, droughts and severe storms that will affect crop yields and destroy fields. Second, for many critical energy resources and minerals, humans have already extracted the easy-to-get resources and are now moving on to the hard-to-get ones. These will be more costly to extract and will likely come out at slower rates than current resources.
Third, a smooth functioning and relatively stable global finance, investment, logistics and trade system can no longer be assumed in the decades ahead. The Russian-Ukrainian war has produced a split in that system with barriers to trade (called sanctions) sprouting like weeds on an almost weekly basis. There is no obvious reason why these barriers will come down anytime soon, and they are aimed at one of the world's largest producers of crops, energy (oil, natural gas, coal, uranium) and metals, namely Russia—which as noted above is one of four countries with major reserves of helium.
While we were amusing ourselves with party balloons, helium supplies were becoming more precarious. Well, now the party is over, and we have to face the problem of limits squarely, not just in the case of helium, but with practically every major commodity upon which our lives depend.
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, Naked Capitalism, 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 can be contacted at kurtcobb2001@yahoo.com.
No comments:
Post a Comment