Helium could save Canada from its oil crisis
Reuters/Lucas Jackson
Helium has recently got on the public radar, after a potentially huge discovery of untapped deposits in Tanzania. Now the spotlight is moving to Canada, which may become the next big source of the noble gas.
One company, Weil Group Resources, has just opened a helium-producing plant in a tiny little town called Mankota, in Saskatchewan, and plans to open another one, in Alberta, Reuters reports. The first plant has a capacity to produce 40 million cubic feet annually and costs $10 million. Global helium consumption is around 8 bcf, so the Saskatchewan plant’s capacity may not be too impressive in a global context, but it is impressive in the context of U.S. consumption.
Reuters/Lucas Jackson
Last year, North America as a whole accounted for the largest single portion of helium consumption globally. The U.S., the biggest producer, satisfies two-thirds of its demand from a giant storage facility in Amarillo, Texas. Yet the U.S. government is on track to quit commercial helium in five years, which has spurred a search for alternative sources of the gas, which is used not just for party balloons but also in MRI machines, rocket engines, and barcode readers.
Weil Group is not the only one with its eye on Canadian helium. Quantum Helium Management Corp opened its first low-grade helium processing facility in Saskatchewan back in 2013, and is now planning to open another two plants, one in the same province and one in Alberta.
The helium global market is worth $4.7 billion, according to Mordor Intelligence, a market research firm. The world’s needs are satisfied by just 20 plants, where helium is extracted from natural gas and liquefied. Demand is expected to grow, as MRI becomes more widely used and other applications of the gas also expand.
Reuters/Lucas Jackson
Alberta and Saskatchewan, Canada’s oil and gas provinces, have been hard hit by the commodity price rout. A switch to helium could be what they need to get back on their feet. And there is abundant helium in Canada: according to the U.S. Geological Survey, the country has the fifth-largest reserves of the gas in the world and it’s in higher concentration than many other places, says Phil Kornbluth, a helium consultant. Over the last two years, the local authorities issued 17 helium permits and leases – the busiest two years in the last five decades, according to government data.
Helium could become a real opportunity for Canada. The Tanzania discovery is still only a potential, and besides, there’s controversy around it concerning the local indigenous groups, which are in strained relations with the government. Recycling efforts are also on the rise but large-scale recycling is far in the future. Helium won’t replace oil and gas as a revenue stream, but it could offset at least part of the damage done by the oil and gas price crisis.
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