"Like fossil fuels, helium is a finite resource. While the known supplies are sufficient to meet demand for more than 100 years, and with advances in exploration and drilling, chances are that we may find even more, this finite resource must be managed," is the message Walter Nelson, director of Helium sourcing at Air Products (NYSE: APD) delivered today at the European Industrial Gas Association (EIGA) Symposium in Brussels, Belgium.
Air Products is one of the largest helium refiners in the United States and a leading supplier globally. There has been much discussion recently about the tightness in the market and the availability of helium. Nelson's presentation discussed all aspects of the helium business: where helium comes from; its uses and market demand; availability and distribution; supply shortage; and conservation and recycling efforts. Most importantly, Nelson presented the key actions necessary to maintain and increase helium supply for today and tomorrow.
The importance of an available helium supply to society is easily demonstrated by its many uses. The largest end-user market segments for helium are the health industry with magnetic resonance imaging (MRI) and MRI manufacturing, and the semiconductor industry. Scientific research, and traditional uses such as cutting and welding, balloons and lifting applications, diving gas mixtures and analytical and leak detection, are several other end-uses for the noble gas.
Addressing tightness in the helium market, Nelson said that we are seeing a shortage of helium supply resulting from limits in natural gas and liquefied natural gas (LNG) production as well as some existing production plant disruptions around the globe. There are no naturally-occurring underground reservoirs of pure helium. Helium is a byproduct of natural gas production.
"The current shortage in the helium market is unprecedented. Investments by the energy sector are necessary to develop and employ helium recovery with natural gas processing where there is helium present," he said. "Not all natural gas fields are alike. Part of the decline in helium production is due to companies focusing their natural gas drilling efforts on natural gas that is rich in liquids rather than 'dry gas' which typically has more helium."
One additional key factor of looming impact to helium supply is legislation currently being considered by the United States (U.S.) Congress related to the U.S. Bureau of Land Management (BLM) helium reservoir, which currently supplies 30% of the global helium demand. "U.S. legislators undoubtedly need to pass legislation soon to extend the BLM operations and preserve the availability of this important source of supply. Unless, this legislation passes and BLM has renewed authority to continue to operate the federal reservoir, all of the helium that remains in the reserve would be inaccessible. The impact on the U.S. and the world in terms of helium availability would be chaotic. Renewed or new legislation granting the BLM the authority it needs to continue to supply helium would bridge the time period necessary for new announced natural gas and helium production plants to come onstream," Nelson said.
The new sources of helium to come onstream Nelson was referring to include: a new natural gas facility to supply a new Wyoming helium plant, in which Air Products has an ownership interest; an LNG and helium project in Qatar; and additional LNG and helium production expected in Algeria. All these projects are targeted to be onstream in 2013. "Only after these three new helium sources are operational and existing plants are again running at normal rates will the global helium supply begin to fully stabilize. This is why the U.S. legislation to continue BLM supply is so critical to so many industries," Nelson said.
Nelson also touched on steps that end-users and manufacturers must take to help conserve helium at the point of use, and encouraged them to make the investments necessary to recover and recycle helium where practical.
"Provided we do all these things, and they are all attainable, we should have more than sufficient quantities of helium available for end-users and manufacturers for years to come," Nelson concluded.
About Air Products
Air Products (NYSE:APD) provides atmospheric, process and specialty gases; performance materials; equipment; and technology. For over 70 years, the company has enabled customers to become more productive, energy efficient and sustainable. More than 20,000 employees in over 50 countries supply innovative solutions to the energy, environment and emerging markets. These include semiconductor materials, refinery hydrogen, coal gasification, natural gas liquefaction, and advanced coatings and adhesives. In fiscal 2012, Air Products had sales of approaching $10 billion. For more information, visit www.airproducts.com.
NOTE: This release may contain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's reasonable expectations and assumptions as of the date of this release regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors not anticipated by management, including risk factors described in the Company's Form 10K for its fiscal year ended September 30, 2012.