by Ryan Fitzwater, Investment U Research
Every day headlines and articles are dominated by natural gas and oil drilling news. But many are ignoring what could sneak into energy column space in the future… helium.
Helium, which is currently a byproduct of natural gas production, could actually switch to a primary drilling target in the next few years. Why? Simple economics: the U.S. helium supply is declining, and demand is increasing.
Helium isn't just for birthday party balloons and making your voice sound like a Munchkin; it has many scientific and industrial applications that you might not be familiar with.
With a low density, high thermal conductivity, low boiling point, inertness and low solubility, helium can serve many purposes.
Currently the healthcare industry is the largest consumer of helium. The gas is used in MRI machines to cool superconducting magnets, and would not function without the gas.
Wind tunnels and impulse facilities use helium due to its inertness, and silicon growing is possible because helium is used as a protective gas. It's also used in semiconductor manufacturing and NASA rockets.
And of course, all modern airships – like the Goodyear Blimp – use helium to make them float, since the element is lighter than air.
A Brief History
During World War I, the United States became interested in helium to replace the extremely flammable hydrogen for use in military blimps and airships.
After the war, the first commercial helium plant was brought online in 1921, in the Petrolia field near Wichita Falls, Texas. After the Petrolia field was depleted, a bigger plant was built on the Cliffside field in Amarillo, Texas, in 1929 and has been the epicenter for the helium industry ever since.
Up until the 1950s, helium was primarily used in military airships, but once engineers discovered more applications for helium (breathing mixtures and arc welding) demand experienced a significant increase.
Helium's increase in demand was so large that it caused Congress to pass the Helium Act of 1960. The Cold War also played a part in the development of the Act because the gas was considered a strategic resource.
The Helium Act was designed mainly for the United States to buy – using barrowed money – and store helium in the Cliffside field for future use. The Act also had incentives for private natural gas producers to remove helium from natural gas and sell it to the government.