Helium Shortage Averted
Helium is not a natural resource that receives much press. It’s not the life of the party. Instead, it’s more of a wallflower, used to fill balloons and, depending on the party, sometimes give people those squeaky voices.
Despite its low profile, however, helium is actually all around us every day.
For instance, helium neon gas lasers are used in some of the barcode scanners at supermarkets.
And helium is an essential gas in many industries. It’s used extensively by the medical profession as a key component in MRI scanners. It’s also used by tech companies in hard drives and in the manufacture of semiconductors.
So, a long-standing helium shortage is no laughing matter. Especially for the users, as prices have soared 500% in the past 15 years.
The Physics of Helium
In high school science classes, students learn that helium is the second-most abundant element in the universe. But most of the Earth’s helium escaped the planet’s gravitational pull billions of years ago.
The only helium now found on Earth is produced inside rock formations from the decay of uranium and thorium.
But finding a rock formation with commercially useful helium is almost like looking for a needle in a haystack. Often, it’s found accidentally by oil and gas drillers.
Luckily, for the market and investors alike, the U.S. currently meets three-fourths of its helium demand from an underground reserve near Amarillo, Texas, which is managed by the U.S. government. This reserve contains about 30% of the world’s helium supply.
But there is a major need to find more such reserves. And luckily, one may have just been found.
East African Helium Jackpot
A research team from Norway and the U.K. uncovered a hidden store of helium using expertise gleaned from oil exploration – one of the backers of the research was Norway’s oil giant, Statoil ASA (STO).
The scientists from the University of Oxford and Durham University combined those prospecting methods with research that suggested volcanic heat is critical in the development of helium pockets. The heat works to release the helium from the rocks.
This geological hypothesis led the researchers to the Rift Valley region in Tanzania.
The scientists, similar to the way geologists pinpoint where to drill for oil, identified several locations for potential drilling sites.
The Norwegian helium exploration company, Helium One, took it from there. Sure enough, helium gas (not to mention nitrogen reserves) was found to be literally bubbling out of the ground in one location.
Experts have estimated the find – in just one part of the Rift Valley – is at least 54 billion cubic feet. In contrast, the U.S. Helium Reserve is down to 24.2 billion cubic feet.
With global consumption of helium running at about eight billion cubic feet a year, this find is a real game changer for the $4.7 billion industry.
The Tanzanian reserve is enough to fill 1.2 million MRI scanners!
One might even say the helium market is set to balloon.
But first, of course, the resources in East Africa’s Rift Valley need to be developed. Helium One may need financial backing from a more substantial company, like Statoil, in order to hit the market hard.
Let’s hope the company gets it – and soon – so it can get the party started!