The Impact of Helium Extraction on the Price of the Gas

Helium is primarily extracted as a byproduct of natural gas mining through a complex process of drilling and separation, which directly impacts its market availability and price.

In this guide, we explain this connection by discussing the extraction process, after which we’ll cover the reasons behind the ongoing helium shortage and its impact on your profitability.

The Journey from Underground to Your Facility

Helium’s pathway to your facility starts deep beneath the Earth’s surface. It forms naturally over millions of years through the radioactive decay of uranium and thorium, collecting in the same pockets as natural gas.

The extraction process begins much like natural gas mining. Teams drill wells thousands of feet into the Earth’s crust, tapping into these natural gas deposits that contain small amounts of helium – typically only about 0.3% to 3% of the total gas mixture.

Once the gas mixture reaches the surface, it goes through an intensive separation process called cryogenic distillation. This process takes advantage of helium’s unique properties, specifically its extremely low boiling point of -452°F (-269°C).

The natural gas mixture is cooled to incredibly low temperatures, causing different components to liquefy at different points. As helium has the lowest boiling point of any element, it remains in gas form while other gases liquefy, making separation possible.

Why Helium Supply Is Limited (and Expensive)

The complexity of helium extraction explains its high cost to an extent – but it’s not the only factor. As of this writing, there are only 14 liquid helium refineries in the entire world, which makes the gas pretty scarce.

Half of these refineries are in the United States, with the rest scattered across Qatar, Algeria, Australia, Russia, and Poland. This limited processing capability creates a natural bottleneck in the supply chain.

The US Federal Helium Reserve in Amarillo, Texas – which once supplied over 50% of the world’s helium – has been depleting rapidly. This significant change in supply has sent shockwaves through the market.

What This Means for Your Bottom Line

Helium prices have seen dramatic increases of 50-100% for most users since the beginning of Helium Shortage 4.0. This sudden spike is directly impacting businesses across multiple industries.

The market structure doesn’t help, either. With only five major global suppliers, we’re dealing with an oligopoly. When supply issues hit, prices can surge dramatically with little warning.

For businesses that rely on helium, this means careful planning is more important than ever. You should find a reliable supplier who will work closely with you to develop strategies for optimal helium usage and storage to help navigate these market challenges.

Looking ahead, the helium market is projected to grow from $30.4 billion in 2024 to $46.8 billion by 2034. This growth, coupled with limited extraction capabilities, suggests that strategic helium management will become increasingly important for businesses.

Plan Your Helium Supply

Understanding how helium is extracted helps explain why it’s becoming more expensive and why working with a reputable supplier is essential. While they can’t control the geological processes that create helium or the global market forces at play, they can help you optimize your helium usage and ensure a steady supply for your operations.

Whether you need helium for medical imaging, semiconductor manufacturing, or welding applications, having a knowledgeable partner who understands these market dynamics can make all the difference in managing your gas supply effectively.