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Helium is in short supply again

Trouble in Russia and US puts the helium market back in shortage mode

by Craig Bettenhausen
February 9, 2022 | A version of this story appeared in Volume 100, Issue 6

 

A photo of a large crowd dressed in blue uniforms watching a speech in front of a chemical plant.
Credit: Gazprom
A Gazprom offical speaks at an opening ceremony for the first of Amur's three helium production lines.

This year was supposed to finally be calm for the world’s helium users. But a fire at the new Russian helium plant and prolonged technical problems at the US Federal Helium Reserve have plunged the market into what some analysts are calling Helium Shortage 4.0.

The Russian state-owned oil and gas company Gazprom started producing helium at its Amur Gas Processing Plant in September 2021 with great fanfare. With an eventual capacity of 60 million m3 per year, Amur was expected to end more than 15 years of unsettled market conditions caused largely by the US government’s decision to privatize its helium resources.

However, an October fire in Amur’s attached natural gas facilities paused production, and a second fire in early January has caused additional damage and delays. At the same time, maintenance that started in July 2021 at the US helium reserve in Texas has gone on months longer than expected.

Writing for the industrial gas website Gasworld, helium consultant Phil Kornbluth says several industrial gas companies are back to rationing supplies. Kornbluth says the market will likely remain troubled throughout 2022, though supplies of the noble gas should be ample by 2024 when Amur is fully operational and new resources come online in Qatar.

This latest shortage illustrates the risks of privatizing essential resources such as helium, says John Kutsch, an expert in rare element markets who is with the Thorium Energy Alliance.

“A for-profit utility, like helium is becoming, will always experience super disruptive cycles of funding, bankruptcy, and supply failures,” he says. “The for-profit model feasts off of uncertainty and erratic undependable supplies, scarcity.”

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