The Coming Helium Shortage

Because we’re wasting it on party balloons. It really is a critical strategic resource; it’s nuts to be selling off the reserve. It’s vital for a lot of rocketry.

But here’s my question, that a quick search doesn’t answer. With the increase in natural gas production from fracking, are they capturing the helium along with it? Does this solve the problem? Or is the artificially low prices making it not worthwhile to do so? The other question is, are there places where it’s easy to mine in the solar system? For instance, how practical would it be to skim Saturn’s atmosphere for it?

52 thoughts on “The Coming Helium Shortage

  1. Jonathan Card

    I had a couple of reactions to this.

    1. Why couldn’t the scientists get a tank of party helium to put in the machine? It’s probably a different mix, but I’m curious.
    2. Is it really cheaper to sell party balloons than 90,000 pounds of idled work? They may need to change suppliers.

    3. I didn’t realize that non-He3 Helium was so plentiful on the moon. Just didn’t think about it. It’s interesting to see lunar mining in a non-space article.

    This is exactly the kind of prioritization that prices are supposed to handle. Why didn’t this happen here? This doesn’t really make sense.

    1. Thomas Matula

      Jonathan,

      [[[This is exactly the kind of prioritization that prices are supposed to handle. Why didn’t this happen here? This doesn’t really make sense.]]]

      Congratulations! You are recognizing what economists recognized many, many decades ago, namely one of the major limitations of unregulated free markets. Prices DON”T take the future supply into account, only the current supply and demand. The free market assumption is that when one supply disappears raising prices will create a new one OR a substitute will emerge. Of course when neither occurs…

      1. Peterh

        Except that expectations of future prices are taken account of, limited by practicalities of development or storage. One point the main post mentioned was artificially low prices from reserves being sold off. If capturing helium from natural gas costs more than it can be sold for, the resource won’t be developed.

      2. ken anthony

        Congratulations! You are recognizing what [STUPID, IGNORANT] economists [THAT DON'T] recognized [THE HIDDEN VARIABLES IN THE ECONOMIC EQUATIONS] many, many decades ago, namely one of the major limitations of unregulated free markets. Prices DON”T take the future supply into account, only the current supply and demand.

        You are absolutely right that many [STUPID, IGNORANT] economists have said that and they are absolutely wrong in saying it. Which is why they say if you lay all economists head to toe in a line they can still not reach a conclusion.

        The free market assumption is that when one supply disappears raising prices will create a new one OR a substitute will emerge.

        No. Supply never disappears. As it becomes more rare it’s price will goes up. Yes, alternative are found and utilized. Always have, always will.

        Prices DON”T take the future supply into account

        No again. They absolutely do, unless the govt. gets involved to [temporarily] screw it up as they’ve done here. Oddly enough, it’s called a futures market.

        It’s only temporary because ultimately governments are not powerful enough to completely negate the laws of economics. If they try hard enough they cease to exist.

        1. Thomas Matula

          Ken,

          The first problem is that future markets only predict the near term future, the next year or so. They are useless for the time frames discussed in the article. The second problem they are often based mere extensions of existing market trends and relationships. When those relations change, the models fail.

          Really if future markets were as accurate as you believe they wouldn’t be such a gamble for investors. As it is future markets are a very quick way to go broke.

      3. Jonathan Card

        That wasn’t really what I meant. If it’s cheap for party balloons, why isn’t it equally cheap for scientists? That’s what doesn’t make any sense. Even if party balloon tanks are diluted with nitrogen or something, it would have to be really, really diluted for a party balloon to be $1 and an equivalent amount of He to be less expensive then 90,000 pounds of wasted labor and materiel.

        And, yes, markets don’t take the future demand into account ACCURATELY, but they do take current expectations of future demand into account, if and only if there’s a futures market. I’m not able to find a helium futures market; is there one? (note to self: cha-ching!)

        I’m not aware of any economists that have concluded that expected future demand doesn’t affect current prices. Can you help me? Possibly in Behavioral Economics?

        While I’m not commenting on whether it was tactically wise to dump the helium reserves, this isn’t government market manipulation; it’s just a temporary supply rise. That’s not so crazy, and the question comes back to, Why isn’t there a futures market to compensate for this? If the price is really artificially low, there should be an arbitrage opportunity and I’m curious why nobody did it. (Trying not to make a joke about economists walking down the street and seeing a $20 bill)

        There are still unanswered questions about this that I don’t get, like why it’s cheaper for party balloons than scientists.

        1. ken anthony

          There are two types of futures markets. The formal ones we recognize as such and the guy with a bunch of barrels buried in his back yard. I saw quite a lot of the latter in the desert during the Carter years.

          1. Thomas Matula

            Ken,

            So when are you going to start burying cylinders of Helium? :-)

            Might be a nice nest egg for retirement, assuming of course the Helium doesn’t leak out…

            Tom

          2. Jonathan Card

            (This thread is probably dead; I just haven’t had a chance to come back. Sorry.)

            To Thomas Matula,

            Don’t be so quick to laugh. I’m clearing my basement.

            But, to respond to a previous comment, futures markets only exist for a year or so in the future because that’s the time frame for even remotely accurate predictions, and still risky as pointed out. As the predictions in the article are longer than that, it’s the article that’s the problem, with extensive artificial certainty.

  2. Thomas Matula

    But if the party balloon industry is willing to pay for it what is the problem? That is how free markets work, those willing to pay for the product get to buy it and do with it as they wish. Or are you advocating that Helium be closely regulated like it was in the “old socialist” days? I thought you were all for free markets and against government regulation…

    1. ken anthony

      This time you got it exactly right. Now if only we got the government to quit ‘fixing’ things.

      1. Thomas Matula

        Ken,

        Yes, be sure to thank Newt Gingrich for this mess. The Helium Privatization Act of 1996 was part of his deregulation program in the 1990′s, a textbook example of what happens when bad Republican economic ideas are made into law…

  3. MPM

    It really is a critical strategic resource; it’s nuts to be selling off the reserve.

    Is that really true? If so, why aren’t private investor storing it for resale later?

    It’s vital for a lot of rocketry.

    There are alternatives, and the cost of using Helium for pressurisation and purging should be charged against the use of LH2.

  4. John Schilling

    Pro tip: Do not get your information on scientific or economic matters from angry ignoramuses. Not even if they have fancy letters after their name.

    Here in the real world, ballons of all sorts from party favors to rigid airships add up to less than 10% of the world’s helium consumption. You can throw in rocket pressurization as well, it won’t change anything. What we are in fact “wasting” helium on, is things like cryogenics and arc welding.

    And I’ll generalize the previous tip. Whenever someone says, “[This vital work] is being stymied by a shortage of [whatever], much of which is being squandered on [something trivial]“, it is rarely worth the bother of chasing down the facts. Just ignore them.

      1. John Schilling

        Worried about helium generally, or blaming the party-balloon industry specifically? The one is credible, the other silly.

        And, M. Puckett, Argon works better than helium if you are welding steel. For aluminum or magnesium, you need helium – I believe it is primarily a thermal conductivity issue, which is something helium does extraordinarily well. Hydrogen is better still in theory, but there are some pesky details in practice…

        1. Paul D.

          Or, for welding aluminum, you could just use friction stir welding, and not have to use any arcs or inert gases at all.

          SpaceX welds their propellant tanks with FSW. It works great on aluminum alloys.

      1. George Turner

        Arc welders select their mix of gases by application. I usually use a trimix of argon, helium, and CO2. Shielding gas wiki

        The obvious solution to the party balloon problem is to simply outfit a long-endurance aircraft with nets and round them up. They’re all floating around up there somewhere.

  5. R7 Rocket

    One solution, for example if your launch vehicle is using CH4 and LOX you can heat up these cryogenic liquids to saturation temp and pressure. Once at saturation, you can use heaters to maintain pressure instead of using helium.

    1. Peterh

      If you’re heating the propellent to pressurize it, the turbine exhaust gas from some engine cycles is a promising source of heat.

  6. Andrew W

    1. storing a gas is expensive.

    2. Why would you believe claims of some future helium shortage if you’re convinced there’s not going to be a future shortage of oil and gas?

    3. “it’s nuts to be selling off the reserve.” don’t you believe in the free market anymore?

  7. Rand Simberg Post author

    don’t you believe in the free market anymore?

    If it was a private reserve, I’d have no problem with it, because the seller would maximize profits. The government is selling it off at an artificially low price, just to get rid of it, which results in uses that are value subtracted.

    1. ken anthony

      Which is another example of the knowledge problem. It’s not that politicians are stupid, just ignorant or evil or both.

      The way to sell of the reserve would be by auction. Even then a massive influx is likely to distort value for a while so they should sell it into the market at a low enough rate that it doesn’t cause much disruption.

      The only reason government should ever keep a reserve of anything should never be economic. It should always be related to national defense.

      1. George Turner

        Having the government involved in helium is a bad idea. As soon as the EPA realizes that a helium atom is an alpha particle, they’ll ban helium to reduce particulate pollution.

        1. ken anthony

          George, you usually make more careful word choices…

          As soon as the EPA realizes…

          Realization requires intelligence.

      2. Thomas Matula

        Ken,

        That was why the reserve was created, for national defense purposes. First the need for Helium for military airships, then for the uses Rand is referring to in the aerospace industry. But the Newt Gingrich got into Congress with the goal of deregulating anything and everything in sight. Getting rid of a little understood government Helium reserve was just lowing fruit. I believe the excuse used was that the government wasn’t building airships anymore for national security so it was needed (I guess they forgot about all government radar blimps protecting the border…).

        Which makes you wonder what will be the some of the unintended consequences of some of today’s Republican economic proposals, assuming they are as successful in ramming them through, we will be dealing with in a decade or so…

        1. ken anthony

          I would think they’d keep a small supply of anything that isn’t easily gotten from the market just in case to do come up with some new defense need. You don’t want to find a need and then go looking for a supply at some critical time.

          Obviously, they first need to identify a level of need, with periodic review, then move slowly to get to that level. I would agree with you that pulling or putting a large volume of any commodity distorting the market is one of the bad things governments do.

          1. Thomas Matula

            Ken,

            Yes, the Gingrich Congress wasn’t very big on thinking things out. They just wanted the government out of anything and everything and didn’t believe folks (like the Academy of Science for Helium)who argued against it.

  8. Andrew W

    “how practical would it be to skim Saturn’s atmosphere for it?”

    I’m doubtful on that, you’re traveling awfully fast in such a low orbit around a gas giant.
    One possibility is KBO’s large enough and far enough out to retain a helium atmosphere.

  9. Andrew W

    “With the increase in natural gas production from fracking, are they capturing the helium along with it.”

    Much of the increase in natural gas production is from shale. Shale deposits are new and shallow hydrocarbon deposits, so my suspicion is that the helium content in shale gas would be very low.

  10. John Walker

    Fretting about a shortage of the second most abundant element in the universe betrays a very non-transterrestrial perspective, doesn’t it?

  11. Henry Vanderbilt

    Some data for the discussion…

    – “Balloon Helium” generally comes from the same place as technical helium. It’s cheaper because it comes with no paperwork or guarantees, and because they don’t bother to vacuum down the bottles before they fill them, so it’ll contain a few percent air, water vapor, etc.

    – Helium content in natural gas varies wildly, from negligible to several percent by volume. The main world source for a long time was wells scattered across the south central US with high helium content that the US government decided to subsidize helium production at. Other viable sources have since been discovered scattered around the world; a number of these are also separating out the helium these days, rather than just letting it escape as most gas well operations do.

    – helium production is via liquefaction of the other natural gas components; once the methane liquefies out, what’s left is helium (and often nitrogen). Helium production thus I would expect combines well with LNG production.

    I expect that selloff of the US reserve has depressed market prices enough to both increase consumption markedly (not very much of that for balloons though, as John has noted) and also to make investment in new production facilities unprofitable, even where the local natural gas sources have useful percentages of He.

    I expect the end result of growing shortages will be that market prices will rise as demand exceeds supply, which will both cause people to be more economical with helium, and cause more production of helium. No big deal, unless you’ve designed a cost-sensitive system around bulk availability of cheap helium, in which case you’d better be coming up with a backup plan.

    1. Leland

      I expect that selloff of the US reserve has depressed market prices enough to both increase consumption markedly (not very much of that for balloons though, as John has noted) and also to make investment in new production facilities unprofitable, even where the local natural gas sources have useful percentages of He.

      But I thought Matula told us it was a free market caused problem… Oh wait, he didn’t probably didn’t read the article, or worse, didn’t understand how the market could be manipulated by a government sell off. Thanks for explaining it, Henry.

      1. Thomas Matula

        Leland,

        The price is still be determined by the market, and the free market doesn’t take into account how long it took to accumulate it or the amount of future supplies, if any, are left. As such its a good example how the a free market focuses on the now rather then the future. It is also a good illustration of the damage done when Congress makes decisions based on ideology instead of common sense.

  12. Trent Waddington

    This is such nonsense and I expect Rand to know better. The reason why helium is so damn expensive in the US (and dirt cheap everywhere else in the world!) is because the US government is involved. The best thing that could possibly happen is depletion of the national reserve and the exit of government intervention in this market!

    1. Thomas Matula

      Trent,

      Helium is cheaper in the U.S. then elsewhere because most of the supply being sold is in the U.S. Once the U.S. reserve is sold off you will see the “true” price of Helium, probably 10 times (or more) today’s price. This is why I think Rand’s friend is worried.

  13. Thomas Matula

    Rand,

    A far closer source will be the Moon, with Helium as a by product of Helium-3 mining.

    1. John Schilling

      Helium-3 mining on the moon simply does not pass the arithmetic test. The highest 3He concentration ever recorded in lunar regolith is fifteen parts per billion, and the process by which it is deposited is inherently resistant to geologic concentration.

      Assuming someone manages to invent a 3He fusion reactor that operates at 50% efficiency (giggle), that translates to net energy output of 4.5E6 joules per kilogram of high-grade regolith.

      The energy output of a kilogram of the lowest grade of coal burned in a good 19th-century reciprocating steam engine, is about 4.5E6 joules per kilogram. And that doesn’t change if you substitute dried peat for the coal.

      So, the proposal is to set up an enormous mining infrastructure on the Moon, and invent a fundamentally new kind of engine backed by fifty years of failed promises, for the sake of an energy source roughly as good as burning high-grade dirt in a type of engine obsolete for over a century.

      And no, that analysis doesn’t change significantly if we include accessible reserves or environmental impact.

      I understand that you want desperately to believe that there are immense riches to be had in space, as soon as the suits see the light and come up with the money. The good news is, this is probably true. But the list of great riches to be had in space, does not include lunar helium-3 (or helium-4, for that matter). The numbers do not add up, no matter what the glossy magazine articles say, and math trumps faith.

      1. Thomas Matula

        John,

        I am not basing my lunar plans on it, merely pointing out that any process that mines Helium-3 will produce a lot of Helium-4 as a by product, since its concentration is about 10-50 ppm in lunar soil.

      2. Jonathan Card

        Someone should point out that 3He is used today in radiation detectors and as cryogenic coolant (to a lower temperature than 4He), and is currently trading at a highly-unreliable and probably too low $16,000/g at government agency transfer rates. I’m told the TSA can’t get enough of it.

        Without a fusion reactor.

  14. George Turner

    When the sun runs out of hydrogen, swells into a red giant and engulfs the Earth we’ll have more helium than we can possibly use. I plan on shorting the market.

  15. Googaw

    In the linked article: “Earth only has a limited supply of helium.”

    Technically true. But it’s also technically true that earth’s oceans have a limited supply of water. Indeed, every single substance on earth consists of only a finite number of atoms. The horror!

    1. Rand Simberg Post author

      Except that water is recycled, whereas once helium is released into the atmosphere it ultimately ends up boiling off the top of it into space. So your analogy is kind of dumb.

  16. Leland

    Except that water is recycled, whereas once helium is released into the atmosphere it ultimately ends up boiling off the top of it into space.

    Really, how does that work? I get that Helium is lighter than air, but I was unaware He also is unaffected by gravity. How does the moon maintain its helium near the surface?

    1. Rand Simberg Post author

      It rises to the top of the atmosphere where, eventually, solar heating gives it enough energy to escape. In any event, it never comes back down, and is essentially unrecoverable in any cost-effective way.

      The moon maintains its helium because it is entrained in the regolith.

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