Helium is used for much more than balloons. And it's in short supply. Here's what to know about it
The price of helium shot up six years ago and more than a dozen wildcatters — risk-taking prospectors who drill exploratory wells — headed to northeastern Arizona with the hope of striking it rich.
Few have succeeded.
Only five companies currently produce helium in Arizona and one of them supplies nearly 90% of the total. This wasn’t the outcome wildcatters predicted when they approached investors back in 2018.
Back then it seemed the Holbrook Basin and its surrounding fields were overflowing with the gas and harvesting it would be simple.
That’s not what happened. Here's what to know about helium and what's happening with mining it in Arizona:
What is helium and what is it used for?
Helium is a colorless, odorless non-flammable gas, that’s lighter than air. Its boiling point and freezing point are lower than any other known substance. It’s the second-most common substance in the universe.
These are common uses for helium:
Party stores use it to fill balloons.
Welders use it to create a hotter arc.
Divers use it to regulate airflow as they descend and pressure increases.
NASA uses it to keep hot gasses and ultra-cold liquid fuel separated as rockets blast off.
The nuclear power industry uses it to cool reactors.
And electronics manufacturers use it to produce flat screens and fiber optic cables.
Here’s how worldwide demand of helium breaks down, according to Helium Resources Ltd.:
MRI Scanners – 20%
Science and Cryogenics – 14%
Welding – 12%
Lifting – 8%
Fiber Optics – 6%
Electronics – 6%
Pressurizing – 4%
Other – 20%
Where is helium produced?
The United States is still the largest supplier of helium. It once produced 75% of the world's helium, but that number has dropped to 46%, according to the U.S. Geological Survey. Qatar is the next largest producer, followed by Algeria and Russia.
United States – 46.2%
Qatar – 38.6%
Algeria – 5.9%
Russia – 4.7%
Canada – 2.3%
Poland – 1.8%
Why is helium scarce?
Helium is formed by the radioactive decay of uranium and thorium deep inside the earth’s crust. The molecules are small and light. They make their way upward, and unless trapped under cap rock, they escape into space.
The U.S. once had a massive reserve of helium. But it gradually sold off its stockpile and had only 3 billion cubic feet left as of October 2018 — equal to about a half year of global demand. That fact, combined with a deadline to sell off the rest of the supply by September 2021, caused buyers to panic and helium prices to skyrocket.
The high prices enticed wildcatters to search for the gas. That search was especially intense in the U.S., Canada, the Middle East, Russia and Africa.
Why were wildcatters interested in helium in Arizona?
Arizona produced helium in the 1960s and 1970s and geologists predicted that reserves of the gas in the Holbrook Basin — from near Flagstaff in the west to the New Mexico border in northeast Arizona — and surrounding fields were far from tapped. When prices shot up in 2018, wildcatters immediately headed to that region. Oil and gas leases issued by the Arizona Land Department doubled.
Were helium hunters successful in Arizona?
Not many were. Two companies have filed for bankruptcy protection since 2020. Another packed up its helium processing plant in July — six months after erecting it — and moved to New Mexico.
Three more companies have burned through tens of millions of dollars and have notified investors that they might not survive. One of them said it has defaulted on $20 million in loans that it may not repay. On the bright side, one company struck it rich on the Navajo Nation. Since 2018, it has produced nearly 400 million cubic feet of helium, representing 86% of Arizona’s total supply.
Michael Braga is an investigative reporter at The Arizona Republic. You can reach him at 602-418-1094 or mbraga@arizonarepublic.com
This article originally appeared on Arizona Republic: What is helium and why is it critical to have enough of the gas?
