We’re Running Out of Helium, and Two Geologists Might Have a Fix

(Bloomberg Businessweek) -- If Josh Bluett and his pal Thomas Abraham-James hadn’t run out of things to talk about during a road trip, they might never have read the six pages that changed their lives. Bluett and Abraham-James are Australian geologists and onetime housemates in Brisbane who’d been hunting precious metals and fossil fuels for mining and energy companies. By November 2013, Abraham-James was living in Tanzania, looking for gold and copper, and he invited Bluett for a visit. “I was having a great time—this was proper exploration,” Abraham-James recalls. “I told him, ‘You’ve got to come experience this place.’ ”.During the long drive from the city of Dar es Salaam to one of the sites where Abraham-James’s company was prospecting for gold, Bluett found in the back of the car a government-published book, Industrial Minerals in Tanzania: An Investor’s Guide. Inside were summaries of old reports identifying deposits around the country, and some numbers concerning helium caught Bluett’s eye. While conducting geological analyses for his employer a couple of years earlier, he’d gained some experience spotting caches of the universe’s second-most abundant element, which has lately been in short supply here on Earth..Most of humankind’s helium comes from the U.S. and Qatar, and technical or political factors can severely constrict the market almost overnight. A colorless, odorless gas, it can be found trapped in groundwater, brine, and lakes; in mineral ores, coal formations, and fields of natural gas; and in sediments of the tropical oceans or sheets of ice. But it’s so light that it’s elusive. If not tightly contained, it escapes not only its container but also Earth’s atmosphere. Recycling is possible but difficult. For all intents and purposes, helium is a nonrenewable resource, one that’s growing steadily more valuable to all kinds of engineers and research scientists. And no one had ever extracted helium for its own sake..In a typical mine where it can be profitably separated from the methane and other gases it’s bound up with, helium concentration stands at about 2%. According to the Investor’s Guide, the hot springs in southwestern Tanzania were spitting out gas with 5% to 15% helium in it. “I thought someone wrote it down wrong,” Bluett says, “that the decimal was in the wrong spot or something.” If the numbers were right, he and his former housemate had stumbled onto something better than a gold mine..“At that point we said, ‘Let’s forget about the gold and go to the Geological Survey in the capital and find the original reports,’ ” Abraham-James says. In one of the low buildings in Dodoma, behind a chain-link fence topped with barbed wire, they dusted off a 1956 paper by British geologist T.C. James. He’d analyzed gases naturally occurring around Tanzania, then a British territory known as Tanganyika, and found helium concentrations in the country’s hot springs as high as 17.9%..Soon after, Abraham-James pitched his employer on a play for Tanzanian helium. The company declined; its focus was on metals. Abraham-James and Bluett quit their jobs..The U.S. government started to develop a huge store of helium at a processing plant in Texas about a century ago. The feds were hoping to use it in zeppelin-style airships, which were seen as the future of transportation until the Hindenburg scattered that idea into a million burning pieces over New Jersey in 1937. The space program later became the justification for the reserve, but in 1996, Congress, in its infinite wisdom, decided the government ought to get out of the helium business. It ordered the Texas facility’s operator, the U.S. Bureau of Land Management, or BLM, to sell off much of the gas by 2015, with the idea that private industry would make up the difference by then..That last part didn’t happen, so there was little to help helium heads when the BLM, which had long charged below-market rates, started bumping up the price as mandated by the 1996 legislation. The increases were unpredictable, according to 2012 Senate testimony from David Joyner, president of refiner-retailer Air Liquide Helium America Inc. The agency also started tacking on fees..Among the key uses for helium today are arc welding, chromatography, medical lasers, optical fiber, intercontinental ballistic missiles, and space travel. The Large Hadron Collider, the particle accelerator outside Geneva wrestling with the biggest questions of physics, needs 120 metric tons of helium a week to keep running. Helium can make things superconductive, meaning they can transmit electricity basically forever without generating any heat, and other helium properties make the element essential for semiconductor manufacturing. Every MRI machine in the world bathes its magnetic coils in liquid helium to prevent overheating. This is possible because helium boils—that is, turns into a gas—at a lower temperature than any other element: –452.1F. Liquid helium is so cold, it’s the first choice when researchers want to chill something at the South Pole..All the bulk liquid helium we know about comes from only 14 plants in six countries. A little more than half is produced in the U.S., and about a third in Qatar. For an example of the price spikes the BLM sale foretold, look to June 2017, when Saudi Arabia and the United Arab Emirates initiated a blockade on exports from Qatar and its helium vanished from the market. The BLM initiated rationing. Then, last August, it held its final helium auction, and refiner-retailer Air Products & Chemicals Inc. outbid everyone to acquire 100% of the helium offered. The following month, Exxon Mobil Corp.’s helium plant in Wyoming shut down for unplanned maintenance. Like the price of lithium, the price of helium is one of the more opaque among commodities, but reports said it jumped 135% from the previous year. With such extreme sensitivity in this market, a big new helium source could, just maybe, transform a whole country’s economy. A country such as, say, Tanzania..Even when the cost of helium shoots up, natural gas companies aren’t going to increase production simply so they can make a higher profit on the trace amounts of their product that are helium. “You’re held captive to the main product,” says Maura Garvey, director of market research for Intelligas Consulting in Dedham, Mass. If you’re a large manufacturer with wide margins or a government space program, you can absorb the cost increase. But some customers have been told they won’t be getting the full amount they contracted for or that they’re going to have to pay more..For the thousands of academic research groups using liquid helium in their experiments or instruments, or a hospital running a few MRI machines, the price spike or supply cutoff presents an obstacle to your operation. And if you’re the King Soopers in Longmont, Colo., providing free kids’ balloons, forget it: A sign there earlier this year indicated that “Due to the Worldwide Helium Shortage that we are currently experiencing,” visiting tots were just going to have to learn resilience..When Bluett and Abraham-James first Googled “helium” and “Tanzania” in November 2013, the name Peter Barry came up. He’d published on helium isotopes found in the country and was working in the University of Oxford lab of Chris Ballentine, who was about to publish his theory on the combination of factors that would generate a high accumulation of the gas..Helium is produced on Earth by the natural radioactive decay of uranium and thorium, which are present in all rocks. But that process takes a long time—as in billions of years—so you’d need some seriously old stones. And because such old rocks don’t have a lot of gas-trapping formations, you’d need some geologic activity to break them apart and form fractures through which the helium could escape. Then you’d need heat to push the helium up through the fractures, and sedimentary formation at the surface to store it in traps between the layers of sediment, as in a reservoir..Ballentine and colleague Diveena Danabalan identified Tanzania as one place with this kind of interplay at work. Ancient rocks formed in the African tectonic plate about 2 billion years ago, making them sufficiently old for radioactive decay to produce a lot of helium. Thirty million years ago, the plate began to pull apart, forming the Great Rift Valley, which reaches 1,700 miles from southern Tanzania up to Eritrea and the Red Sea. That process created fractures that allow magma to escape; the magma would provide the heat necessary to force the helium upward. Meanwhile, at the surface, sediments were deposited, providing the reservoirs where helium could be found. “That combination of factors makes possible helium accumulation at the surface,” says Emmanuel Kazimoto, a geology lecturer at the University of Dar es Salaam..Bluett and Abraham-James showed Ballentine the old paper they’d found. “I’m always surprised when one of my theories turns out to be correct,” Ballentine says. “But it was absolutely obvious at that moment, having looked at what would make a good helium system, that this was one.” He and Barry agreed to come down to Tanzania to resample seeps from the springs James had discovered 58 years earlier. “They had no idea how to collect a sample like that,” Barry says. “That’s my expertise.”.In September 2015, Bluett and Abraham-James formed a company they called Helium One Ltd., with Abraham-James as managing director and Bluett as technical director, and acquired the necessary government licenses. A couple of months later, Abraham-James and Barry climbed into a rented Toyota Land Cruiser to make the dusty drive to a salt pond in Itumbula, a village in southwestern Tanzania 50 miles from the Zambian border, where T.C. James had bottled high concentrations of helium. Barry ferried the samples to England to analyze them with specialized equipment called a mass spectrometer, a more exact method than the instruments James had used. The device confirmed James’s findings. “As we go back year to year,” Barry says, “we see the same values, so it gives us a lot of confidence in the measurements.”.On July 5, Karim Mtili, a 26-year-old geology grad student at the University of Dar es Salaam, walks out onto a berm constructed to facilitate access to the salt pond in Itumbula. He’s wearing soccer shorts, a white T-shirt, and Crocs-like rubber boots and holding an empty plastic water bottle, a large funnel, and a copper tube. People have been collecting salt here for probably 10,000 years, and today it’s the main source of income in Itumbula, a village three hours from the nearest hospital with no paved roads, where most residents live in small shacks with a single lightbulb. But Helium One might be able to change things. Royalties from the helium it discovered there could be worth more than 11% of Tanzania’s annual gross domestic product..Mtili is here to collect the last set of hundreds of samples of gas seeping from the salt pond before the work to map subsurface reservoirs begins later this year. He wades into the water as white egrets tiptoe around the shallow edges of the pond and cattle in the distance audibly air their grievances. “Do you see all these bubbles?” Mtili asks with excitement. At least 15 seeps are visible, creating air pockets from the pond’s floor that rise to the surface at varying frequencies. “If it was coming from the same source, it would be flowing at the same rate. So that explains the percentage differences in different samples,” he says..Standing in water up to his crotch, Mtili submerges the funnel and bends down to push the wide end into the pond’s muddy bottom. With his other hand, he raises the tube so the gas can rise into it. “You have to fill all this with water and let the seep gas displace the water,” he says. Wading deeper into the pond, he calls in Swahili to Godfrey Myega, a local who helps out sometimes and has stripped down to his boxer shorts for the task. The big man squeals as he steps into the hot water, carrying in Mtili’s upturned baseball hat some glass vials and small vacuum-sealed bags that will be filled with gas and, later, connected to the mass spectrometer in Mtili’s hotel room, four hours away. “This rock that I’m sitting on is pretty, pretty hot,” Mtili says..Bluett and Abraham-James found geophysical surveys of the area that Amoco Corp., now part of BP Plc, had conducted in the 1980s while looking for oil. It didn’t locate any oil but, just as Ballentine predicted, spotted a bounty of sedimentary traps where helium could accumulate. “Seismic techniques can image the subsurface, so you can look and say you have this much gas,” Barry says. Samples such as those Mtili was collecting show the percentage of this gas that’s helium. “Then you take that number and multiply by how much gas you think you have in the subsurface, and that shows your potential resource.”.Helium One delivered all this data to resource certifier Netherland, Sewell & Associates Inc., in Houston. In 2016, NSAI said there could be as much as 98 billion cubic feet of helium below Mtili’s hot rock. That would be enough to fulfill global demand for 16 years. “To my knowledge, it was the largest primary helium resource ever announced,” Bluett says. Goodbye, helium shortage—at least in theory..In the exploration business, everything is hypothetical until you dig a hole. There could be a big difference between the helium resources, meaning how much is down there, and the helium reserves, meaning how much can be profitably recovered. Right now, Helium One has a resource..“One thing’s absolutely certain—there is that much helium down there,” Ballentine says. “Whether it’s concentrated in a form that’s extractable commercially is where the current risk lies.” (Ballentine and Barry each hold a fraction of 1% of Helium One equity.) The helium could be stuck in water. The bubbles Mtili tapped in July might not represent enough gas to fill the trapping structures that Amoco mapped. The only way to know these unknowns—aspects of the reservoir’s composition, the permeability of the sediments, the flow rate, how the pressure will decrease as the gas flows—is to drill into the structures..That’s going to be tricky. Weil Group Resources LLC, which is based in Richmond, Va., but operates mostly in Canada, was the first to mine helium for its own sake, and remains the only company to have done so. (At a capacity of 40 million cubic feet a year, Weil’s helium plant isn’t large enough to affect the supply deficit.) “It’s quite an intricate analysis,” says Chief Executive Officer Jeffrey Vogt. “You really have to be methodical, thoughtful, and discerning.” The geology of Saskatchewan being somewhat different from Tanzania’s, his technique won’t offer Helium One any hints. Bluett says they’ll be using a method similar to that deployed for oil and gas drilling..Tanzania itself presents challenges. Operating in Africa can be unpredictable. The government imposed a $190 billion fine on U.K. gold-mining concern Acacia Mining Plc in 2017. “That killed Tanzania overnight” for investors, Abraham-James says. “We were collateral damage,” and Helium One was unable to raise money for the expensive and essential seismic and drilling work as quickly as it had hoped. In January the Tanzanian government named a new minister of minerals, Dotto Biteko, whose office didn’t respond to requests for comment. In July, Acacia’s fine was reduced to $300 million..More directly, Helium One will face difficulties getting its infrastructure up and running. The springs are far removed from anything approximating a logistical hub. Abraham-James insists that the company’s cryogenic plant will have a small footprint and run on a turbine driven by the gas it’s extracting. Assuming that even works, liquid helium must be transported in expensive intermodal containers known as ISOs. Trucks carrying them will need to travel over a gravel road for three hours in either direction. It’s in better shape than many other such roads in East Africa, but it’s not a crushed-seashell driveway in East Hampton, either. Even for trucks upgraded with expensive air or hydraulic suspensions to protect their cargo, those roads must be continually maintained and graded. “It’s not just having the helium,” Intelligas Consulting’s Garvey says. “You’ve got to have infrastructure there to get it out of the ground, and it could be extremely high-priced helium by the time they export it.” Things have grown complicated enough that Abraham-James left management, he and the company say, because day-to-day operations have expanded beyond his expertise and interest. His replacement, Ian Stalker, previously led uranium company Uramin Inc. to a $2.5 billion buyout..Helium One has faced delays in the past, and more are likely. By the time it gets its product to market, new sources may have gotten there first: Ras Laffan Industrial City, a planned production facility in Qatar—it’s figured out an end run around Saudi Arabia and the U.A.E.—is expected to add 400 million cubic feet annually. “This will barely cover the lost production from the BLM,” Bluett says. But then there’s Russia. Gazprom is working on a facility in Siberia known as Amur, though it’s faced infrastructure-related delays and is even farther from a port than Itumbula. Some doubt it will ever deliver its promised 2 billion cubic feet. But if it does, Garvey says, “we should have plenty of helium. That’s going to level the price out as supply comes back. Do we really need more?”.“Haters are gonna hate,” says Abraham-James, who still owns 9% of the company. “They’re all, ‘It’s too big, it’s in Africa, you must have made it all up.’ If they’re bad-mouthing us, that’s a very good sign—I like that. Otherwise they wouldn’t be bothered.” The residents of Itumbula, at least, are hoping he’s right. This story is from Bloomberg Businessweek’s special issue The Elements..To contact the editor responsible for this story: Jeremy Keehn at jkeehn3@bloomberg.net, Jeff Muskus.©2019 Bloomberg L.P.

We’re Running Out of Helium, and Two Geologists Might Have a Fix

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