Global demand for helium will double by 2035

Global demand for helium is likely to nearly double by 2035, largely driven by strong growth in the semiconductor sector market research firm IDTechEx he reported. The company estimates that global demand could top 322 million cubic meters by 2035, likely outstripping supply growth.

According to the report, global production of helium averaged about 160 million cubic feet between 2019 and 2023. It is the second lightest element after hydrogen, having the lowest melting point of any element at -261.1° C (-429 °F) and being highly chemical. inert, helium has no substitute where ultra-low temperatures are required, including in superconductors.

Helium is indispensable in many key applications, including space exploration, rocketry, high-level scientific applications, in the medical industry for MRI scanners, fiber optics, electronics, telecommunications, superconductivity, underwater breathing, welding, cryogenic shielding, leak detection, and lifting. balloons.

IDTechEx estimated that gas demand is likely to grow fivefold in the semiconductor industry over the next decade, with the global semiconductor market expected to grow by 13.1% in 2024.

Currently, only a few countries, including the United States, France, Russia, and Qatar, produce helium in commercial volumes. In 2023, US sales of Grade A helium and helium gas were estimated at 2.8 billion cubic feet valued at approximately $1.1 billion. Based in Allentown, Pennsylvania Air Products and Chemicals Inc. (NYSE:APD), France Linde and Air Liquide (OTCPK:AIQF) and privately owned Zephyr Solutions based in Avon, Ohio, are some of the largest helium producing companies in the world.

Consumables running low

Only a small percentage of naturally generated helium is readily available and even a smaller proportion is economically feasible to collect.

The helium we find on our planet is a product of the radioactive decay of minerals made up of uranium and thorium. Unfortunately, the vast majority leaks into space, and whatever little is trapped doesn’t come close to meeting our global demand of 32,000 tons of helium per year (about 6.2 billion cubic feet measured at 70°F and below atmospheric normal of the Earth). The vast majority of our helium reserves come from millions of years of gradual accumulation, especially in shale formations.

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After forming deep in the bowels of the earth, helium tends to rise and collect in the same deposits as natural gas. In fact, much of our helium supply comes from natural gas companies that collect the gas as an ancillary benefit. Unfortunately, current technological limits mean that helium is only economically recoverable at concentrations greater than 0.3%. Consequently, the vast majority of the helium in the gas reserves is simply vented.

Another weak link has developed in the US helium supply chain: the US federal government will no longer sell helium to traders and manufacturers.

In 1925, when helium-powered airships looked set to become vital to national defense, US Govt created Federal Helium Reserve (FHR) from a huge, abandoned salt mine located 12 miles northwest of Amarillo, Texas. Over several decades, the FHR collected as much helium as it could and essentially became the world’s strategic helium reserve, supplying ~40% of the world’s needs.

Unfortunately, FHR eventually ran into billions of dollars in debt problems due to its practice of selling helium at far below market prices. In 1996, the US government passed laws requiring FHR to sell its reserves and shut down in 2021 in an effort to recover its debts.

The Bureau of Land Management (BLM) outlined the process and timeline by which it will do the FHR disposal of helium and remaining helium assets. The BLM, which now manages the reserve, has been able to sell most of the stored helium to all users, with the remaining 3 billion cubic feet (84 million cubic meters) until 2018 being restricted for sale to only federal users, including universities that they use helium for federally sponsored research. The BLM held its last crude helium auction in Amarillo, Texas in 2019, with the price increasing 135% from $119/Mcf in 2018 to $280/Mcf in 2019.

In June 2024, Germany’s Messer, the world’s largest private industrial gas company, closed upon purchase of the BLM’s Federal Helium System, claiming about 425 miles of pipelines stretching across Texas, Kansas and Oklahoma, plus about 1 billion cubic feet of helium. Unfortunately, regulatory and logistical issues with the facility now threaten a temporary shutdown as it transitions from public to private ownership, with hospitals particularly concerned that they could run out of helium to cool MRIs. US patients are subject to an estimate 40 million MRI scans every year to help diagnose various health conditions, including cancer, brain and spinal cord injuries, strokes and heart conditions. Superconducting magnet-powered imaging machines provide doctors with clear, high-resolution images of areas inside the body that cannot be reached with X-rays and CT scans.

“Timely patient care would suffer if helium supplies dwindled even further. AdvaMed is urging the White House to delay the sale and privatization of the Federal Helium Reserve until outstanding issues identified by the Compressed Gas Association are resolved,Scott Whitaker, CEO of AdvaMed, wrote in an email to NBC News.

Helium was already in short supply before the FHR sale: According to Phil Kornbluth, president of Kornbluth Helium Consulting, three out of five US helium suppliers are now rationalizing the element to prioritize critical uses such as MRI machines over less essential helium applications.

By Alex Kimani for Oilprice.com

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