Helium shortages can derail research and threaten expensive instruments that depend on the gas to operate safely. In late 2020, analysts predicted—and we reported—that pressures on the global helium market were likely to ease as new production capacity came online. Today, helium users are again facing price spikes and limited supplies, driven by a variety of factors including political instability in Europe and technical malfunctions at key suppliers. In this bonus episode of Stereo Chemistry, C&EN industrial gas reporter Craig Bettenhausen explains how we ended up here again and how the outlook for the global helium market has evolved.
For more background about where helium comes from, why it’s so important to science, and what happens when you can’t get enough of it, check out our October 2020 podcast episode, How helium shortages have changed science.
The following is a transcript of the episode. Interviews have been edited for length and clarity.
[singing: How did I get here again?]
Kerri Jansen: I’m Kerri Jansen, and you’re listening to a bonus episode of Stereo Chemistry. I’m here with Craig Bettenhausen, who is C&EN’s reporter covering industrial gases.
Craig Bettenhausen: Hi everyone.
Kerri: Craig, we need to discuss something that’s happening right now with the world’s supply of helium that we, frankly, did not expect.
Craig: Yeah, we really did not see this one coming.
Kerri: So back in October 2020, we published a podcast episode about helium shortages and their impact on industry and on scientific research. Back then, some scientists were struggling to get the helium they needed to keep important instruments running safely.
Craig: Right. Some folks were calling it helium shortage 3.0. And at the time we reported that story, the shortage had been going on for a year and a half or more, and a lot of labs that use liquid helium or gaseous helium were having to ration, and they were paying high prices for what they could get. It was really stressful for scientists trying to keep their instruments and their research programs alive.
Kerri: And at the time, the experts you talked to predicted that the pressures on the helium market would ease. It was based on a variety of factors, which we’ll talk more about in a moment. And we ended the episode pretty optimistically. In fact, and I’m quoting you here, you said, “we might not have this kind of helium shortage again for the foreseeable future.” So that was October 2020. What are you seeing now?
Craig: Right. So here we are, in that foreseeable future, and shortages and price spikes abound. We’re hearing from a lot of different people that are really struggling to get their helium. And in some cases, they’re worse than they ever were before. We’ve heard from a number of people in New York and Detroit, and their suppliers are putting them on allocation. And what that means is that they’re only allowed to order some specific percentage of what they would normally order. And those allocations are intense. Some of the people are only able to get 65% or 45%, a way smaller amount of helium than they usually use. And with magnetic instruments, if you can’t get all the helium you need to keep those systems cold, you risk really damaging the instrument. You can’t let it warm up. That’s not one of the options.
We also heard from an NMR lab down in Texas, and they are on the clock, they have like 3 weeks, and then their system is going to quench. And what that quench is, is the helium is keeping a superconducting magnet cold enough to be superconducting. But when it warms up too much, that superconducting quality is lost all at once, and the heat then spikes. And it can damage the instrument, it can crack the magnet, it can do horrible things to the probes. And yeah, they have 3 weeks of helium left before they’re at that point.
I mean, one of the big differences between this helium shortage and the previous one is last time around for the most part, it took the form of higher prices. There were some people on allocations, but they were pretty minor; mostly people were just paying more for the same amount of helium. Here, people are really getting cut off, they’re not getting the helium. And that’s scary.
And so some of the people that, you know, may have dubbed it helium shortage 3.0 have started calling this helium shortage 4.0, even the same people that I was basing my predictions on. And it was a surprise to analysts and to helium users, to us here at C&EN. And then the reasons behind it are a combination of some of the pre-existing stuff that we thought was going away and some new very specific events.
Kerri: Coming up, we’ll trace the market forces that led to the current shortage, and also look at how the outlook for the helium market has evolved. For more background about where helium comes from, why it’s so important to science, and what happens when you can’t get enough of it, please check out that earlier episode; we’ll put a link in the show notes.
So Craig, as we mentioned, the last time we covered this on Stereo Chemistry, signals seemed to be pointing to helium shortage 3.0 being the last one for a while. And yet here we are a year and a half later with helium shortage 4.0. So how did we get here again?
Craig: There are a few things that are all happening at once. One of the big things that’s going on right now is the political instability in Europe around the invasion of Ukraine. That seems like a kind of an odd path to get there. But one of the big sources of helium globally is Russia. And there’s a plant in Amur, Russia, that was . . . everyone was expecting it to be this major new source. It was going to add, you know, 20 and 30% more helium onto the global market, which would be huge.
I should mention that most of the helium that we use is a by-product of natural gas production, the same kind of geological factors that trap natural gas, trap helium. And Amur was going to be a plant that anytime that they were making natural gas, which is going to be all the time, they would be extracting the helium. Unfortunately, they got it started up, it was going great. And then they had a fire. And then a couple months later, they had another fire. So that was only actually online for a fairly short period of time, and then it’s down. And then Russia invaded Ukraine. And that’s further complicated a lot of the, you know, when are there going to be resources available to fix those things, when are those markets going to be open?
There’s sanctions from the US on oil and gas from Russia right now. So the sanctions that are affecting the natural gas, are also going to possibly hit the helium, although that’s a little less certain just yet.
And then in a related thing that happened, there’s another helium source in Algeria, and it would normally be bringing its natural gas and its helium to a liquefaction plant where the natural gas is compressed into a liquid. And when you’re doing that, it’s relatively simple to pull off the helium. But because of the restrictions now on natural gas flowing from Russia into Europe, it now makes more sense in Algeria not to liquefy it and put it on like a ship, but to put it through a pipeline and send it directly to Europe, where they’re now crunched for natural gas, because it’s not coming from Russia. And at least at that facility, it doesn’t necessarily make sense economically to extract the helium. If it’s going to go into a pipeline, it’s not liquefied. So that’s going on.
At the same time, the US facility, the Bureau of Land Management, or the BLM facility, it was down for scheduled maintenance. And then it stayed down. There was a big leak, basically. So any of the helium that’s in that reservoir is inaccessible right now. And so there’s all these things happening all at once that have really crunched supply across the globe.
Kerri: Who is the hardest hit by the current supply pressures?
Craig: The hardest hit people for sure, right now, are people that are on the spot market. People that have a regular supply contract—they’re in a better situation. They’re the people getting on allocation. But the thing is, if you have a contract to deliver helium, and you’re not being able to deliver that helium, you cannot then take a call from some new business, even if it’s somebody you’ve worked with before. So anybody that would normally buy just kind of as they needed it, they’re not going to be able to get the helium. If they are, they’re lucky. The last I heard, four out of the five major North American suppliers are on allocation.
Kerri: Who is usually on that spot market? Are these . . . are we talking about, like, smaller labs, independent research groups? What are we talking about here?
Craig: Exactly. Yeah, it’s the smaller labs. It’s people that you know, you might be an analytical services company and you have one or two NMR systems, maybe. Like I said, liquid helium is what you need for these high field magnets, that’s going to be a cryogenic helium. People that are buying gas cylinders—so that’s gas just in the gaseous form—it’s not cryogenic, that’s a little bit easier, partially because you can get that from a wider variety of suppliers. Even just a welding gas supply house will have that. But yeah, it’s the people that need cryogenic helium, and that are a smaller place that they’re not really really big, don’t have the service contract. Those are the people that are really going to be stressed.
It’s also true that not all the suppliers are dry. Some people do have helium. So if there are people listening out there and they’re feeling the stress, which I’m sure a lot of people are, call around to everybody you can think of to call around, because there is still some helium in the market. It’s just tight and rare.
From what I’m hearing, the prices that people are paying are spiking up by 30%. That’s a big jump. If you’re a small player, it might not kill your entire lab budget. But again, if you’re a small player on the spot market, they might not be answering your calls.
Kerri: In our earlier episode, we talked about some of the ways that scientists and labs were trying to adapt to using less helium. Are folks in a better place to cope this time around?
Craig: I think so. People at that time, there were a lot of people who were thinking about and looking at trying to get funding sources for these helium recovery systems because they’re expensive. From what I’m hearing, a lot of people have had success. NIH has a program that some other grantees were able to get systems installed.
Another thing that’s happened since we talked in the podcast episode about in the gas chromatograph and in that sort of space, people moving to other gases. Because that’s where the gas is really being used to push stuff along a column. And you can use hydrogen for that, you can use nitrogen for that. And those systems have been selling well.
I would say there are more people now who are better equipped to deal with these shortages than there were before. And I think . . . my sense is that this is kind of pushing people over the edge. People that were on the fence before said, OK, we thought we were done, and now we’re back. I need a system, I need a recycling system. So I think we’re gonna see even more people moving to that as a result of helium shortage 4.0.
Kerri: So what is the outlook now for the global helium market?
Craig: The expectation I’m hearing from the folks that I’m talking to is that some of the troubled sources are going to come back online. Hopefully, there’ll be some resolution to the situation in Ukraine, and Amur will be able to come back, and that things will calm down.
And at the same time, I mean, you know, I was saying that the analysts are all expecting things to calm down; well, the analysts didn’t expect this shortage to happen at all. I mean, if it were me, if I were a lab manager, I would try and get on a contract if I wasn’t on a contract, but I wouldn’t sign a years-long contract right now, I wouldn’t be signing 5 years of supply agreement, because you might end up locking in a price that’s at its peak now. But it’s a gamble, for sure. I still think it would be prudent for a lot of labs if they can switch to systems that don’t use so much helium one way or the other to do so.
There’s another . . . there’s new helium coming online in some parts of the world, and one of those places is up in Saskatchewan. What’s especially interesting, as I mentioned before, that most of our current helium comes alongside natural gas. But there’s these new sources where it’s helium focused. They call it primary helium. Other people might call it pure-play helium. But they’re going after helium just for helium’s sake. I think that’s going to be an interesting thing to watch. And I mentioned Saskatchewan, but there are projects like that in several locations around the world—Utah, and Tanzania is another place. So those are going to be really interesting because they’re not going to be dependent on the natural gas market. And if you need to be making natural gas to get your helium, that’s a problem for the helium supply. So that’s really a market opportunity, I think, for these helium pure-play, these primary helium producers.
I think people were even a little bit nervous about the idea of Russia being such a powerhouse in the global helium market, even when there wasn’t any hint of industrial accidents or political instability. And those problems are making people say, yeah, that was a problem we should be concerned about. Because you can have a problem in one site, and if that problem at one site causes the whole market to go crazy, that’s worrying, because it’s not a market . . . for scientific helium users, it’s not the sort of thing where it’s easy to just turn off the instrument. It’s expensive, it’s risky, you need some stability with these helium applications, almost all of them require a really stable source of helium.
And so the more sources there are, the less those sources are connected to unstable political actors or to resources like fossil fuels that we’re trying to move away from, the better it is for the safety of those systems.
Kerri: It does seem that the last 18 months has shown us that the helium market, as it is today, is still vulnerable.
Craig: I think so. And this recent spate of incidents, I mean it’s really just, you know, two, maybe three things that happened in the whole helium market’s all out of whack. Those were big things, certainly, you know, the war in Ukraine is a big thing. But it didn’t take that much. And then there’s industrial accidents all over the world all the time. And it shouldn’t, you don’t want to be in a situation where something like that can throw you off so easily. Yeah, I think it’s still a vulnerable market and a volatile market.
I think the scientific community has been waiting for a time to relax—eagerly anticipating that—and we’re just not yet there yet. Unfortunately.
So one of the people I often turn to for helium is Phil Kornbluth. He’s a helium consultant really focused on the helium world. He’s still counting on other supplies coming online, but now, instead of being last fall, it might be 2023, before some of these things really come in and ease the supply crunch.
Phil Kornbluth: You know, this year was expected to be a transition year where, you know, we went from shortage to ample supply, finally. It’s not going to happen this year. It probably would happen at some point in 2023. It’s hard to say when.
You know, one point that I would make is that, when we look back at helium shortage 4.0—and you know, forgive me because, you know, the crystal ball is always wrong—but probably the period we’re in now, we will probably look at as maybe the peak of helium shortage 4.0.
You know, it’s probably about as bad as it’s going to get in this shortage now, next month, and then there’s at least a hope up for improvement if the BLM gets their act together and, and gets back online. Is that gonna happen May 1? Best case. Might it be June 1? Uh, more likely. Could it be worse than that? Yeah. But, you know, there’s a cure out there.
Craig: You know, we talked a lot about the, the facts and the figures and the trends here, but it’s, I’m reading some of these emails from people that are, you know, at risk of losing their research and it’s a really stressful and hard time and, you know, I’m really, you know, feeling it as a reporter, I used to be in the lab, and I hope people are able to reach out to other practitioners and you know, find some tips and just find some community because it’s, it’s a really hard time right now if you need helium because it’s worse in some ways than it’s ever been and that’s a rough spot to be in.
Kerri: And if someone wants to get in touch with you to share their experiences, share a story tip, how can they do that?
Craig: So email is a good way to get ahold of me. My email address is on C&EN’s website. I’m also on Twitter. I’m @CraigOfWaffles. So you can reach out to me there. I’m on LinkedIn, too. And yes, I’m very open to story ideas. And I want to hear what people are doing. This is obviously an area that’s important to our community and readers and other people around here. So yeah, reach out and talk to me.
Kerri: Thanks, Craig.
Craig: You’re welcome. Thank you.
Kerri:Stereo Chemistry is the official podcast of Chemical & Engineering News. C&EN is an independent news outlet published by the American Chemical Society. Thanks for listening.