The Helium Shortage 4.0 — And How Total Helium Aims to Boost Domestic Production
As we noted in last week’s post about the current helium shortage — aka, Helium 4.0 — this isn’t the first time the valuable and elusive gas has been in short supply. Instead, there have been four helium shortages since 2006, which some experts find frustrating.
“There’s a lot of frustration among helium users today, because this is ’helium shortage 4.0,’” Phil Kornbluth, president of Kornbluth Helium Consulting reportedly said, according to a recent post in Assembly Magazine.
“Prices have gone up quite dramatically over the last 16 months, and they’re at levels we haven’t seen before.”
In a July 6 post for market research company Benzinga, writer David Willey describes some of the dynamics involved.
“The importance of accessing domestically sourced helium was highlighted last year when shortages reportedly caused the spot price to rocket to $2,000 per cubic foot (mcf), a 300% increase from 2021 prices,” he says.
Noting that there aren’t many countries that produce helium, Willey explains that supplies from top exporters Russia and Qatar have been disrupted by the Ukraine war and other geopolitical factors.
“These disruptions indicate the need for America to establish its own independent, reliable supply of helium,” he says.
That may be especially true since the Federal Helium System is in the process of being sold (check out last week’s post for more on that).
In light of such dynamics, we thought we’d take a look at whether helium recovery is a feasible option and how one company is gaining steam to boost domestic helium production.
How do we get helium?
“Some natural gas fields in the United States have enough helium mingled with the gas that it can be extracted at an economical cost,” the outlet says. “In some of these fields, the natural gas contains over 7% helium by volume. Companies that drill for natural gas in these fields produce the natural gas, process it, remove the helium as a byproduct, and sell the helium for a spectacular price.”
The outlet describes the natural state of helium — and why it can be hard to come by:
“Helium is produced by the decay of uranium and thorium in granitoid basement rocks.
The liberated helium is buoyant and moves toward the surface in porosity associated with basement faults.
The helium then moves upward through porous sedimentary cover until it is trapped with natural gas under beds of anhydrite or salt.
These are the only laterally-persistent rock types that are able to trap and contain the tiny, buoyant helium atoms.
This geological situation only occurs at a few locations in the world, and that is why rich helium accumulations are rare.”
Noting that “very few natural gas fields contain enough helium to justify recovery,” geology.com says to be considered as a potential source of helium, a natural gas source must contain at least 0.3% helium.
What’s the role of helium recovery systems?
The circular supply chain is built on recycling principles — and the same can be applied to recovering and reusing helium.
Although helium is used in many different industries, hospitals are the “largest end users, accounting for 32% of the global market in 2021,” according to the Radiological Society of North America (RSNA).
“An MRI unit requires approximately 2,000 liters of liquid helium to keep the magnet cool enough to operate,” the RSNA says. “Additional refills may be required over the lifetime of the unit to replace helium that boils off and escapes into the atmosphere.”
Fortunately, several experts cited by the RSNA note that helium recycling is a common practice. Manufacturers have been adding helium reclamation units to MRI scanners for several decades, and there’s an increasing urgency to install them on equipment used for clinical and research purposes.
But as Assembly Magazine’s Austin Weber notes, helium recovery systems “aren’t cheap and often require a lot of maintenance.” He includes perspectives from various experts who underscore the fact that although helium recovery systems are pricey, they can be very effective — which is why they’re increasingly popular across industries.
In the following video, Richard Clarke, Owner at 4He Solutions and Phil Kornbluth, Founder & President at Kornbluth Helium Consulting, discuss helium recovery systems during gasworld's “Helium in 2023” webinar.
Source: gasworld on YouTube
Total Helium: A new player gaining steam
One company aiming to address the dwindling domestic supply of helium is Total Helium, which is described in a May 23 press release as “working overtime to keep America and the world from running out of helium.”
“Total Helium is a helium exploration, production and storage company,” the release says. “It is positioning itself to be a top supplier of helium in North America, to both strengthen the domestic supply of the gas and reestablish America as a leading player in the global market. It has built a network of industry relationships and helium-producing sites at various natural gas reservoirs.”
Some of the company’s plans and recent activities are also described:
“The company recently acquired 50% ownership of a helium field in Holbrook Basin, Arizona, a 27,000-acre, helium-rich project called Pinta South.”
“The project has a helium concentration of 5-8%, significantly higher than the usual gas concentration from .5% to 3%.”
“As part of Total Helium's supply chain solutions, it also has a joint venture to establish a salt cavern helium storage facility. This sophisticated facility positions Total Helium as vertically integrated, from production to storage.”
“The fact that the Federal Helium Reserve is selling off its helium supply and exiting the helium business underlines the importance of Total Helium's storage site,” the release notes.
On its website, Total Helium describes the current status and plans for its Arizona operations, noting that the Pinta South project “gives Total Helium the ability to drill its own wells economically with its joint venture partner and supply helium directly to the world’s largest industrial gas company as well as the open market.”
Total Helium says its partnership with “the world’s largest industrial gas company” supports its goal “to provide a stable, domestically produced, on-demand supply of helium to North America.”
The partnership the company is referring to is with “one of the biggest members of the helium oligopoly–the $160-billion behemoth, Linde Plc,” according to an April 2022 news release from oilprice.com.
In the opening summary of its latest press release, issued June 26, Total Helium says, “Following the successful construction of a six-mile pipeline and connection of five wells to the helium processing facility, as reported last month, Total Helium announces significant advancements in well production, pipeline, and future wells.”
First 15 Wells: “The Pinta South Project now features a total of 15 wells, with seven wells actively producing helium. The remaining eight wells are in various stages of completion, and once connected to the pipeline, will significantly increase Total Helium's helium production capacity, thereby generating increased revenue. …”
Pipeline Updates: “Total Helium has established a compressor station and a 6-mile underground pipeline to connect the new wells to the helium processing facility. The compressor station will ensure adequate pressure for higher helium flow rates to the processing plant. …”
Soil Sample and Next Wells: “Although the shallow Shinarump formation is the primary target within the field, the Company is also targeting high impact sand channels and deeper formations wells at minimal additional costs. If successful, these wells are expected to significantly enhance production rates. …”
"These achievements are noteworthy, marking the first time Total Helium has successfully brought wells online post-acquisition of the Pinta South Project,” CEO of Total Helium, Robert Price, says in the statement. “Total Helium congratulates its team members and its partners for bringing these wells online in a timely manner consistent with its goal of developing the Pinta South field quickly, efficiently, and cost effectively.”
In the following video, Price joins Steve Darling from Proactive Investors to share details of the company’s history, current progress, and future plans.
Source: Proactive Investors on YouTube