72. Helium
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Either it's Stephen dinner from freedom ics radio and I am busting into this economics of everyday things episode to tell you about two upcoming economics radio live shows in san Francisco on january third and in los Angeles on february thirteen th. For tickets, go to economic stot com slashed live shows. One word, I am told that tickets are going fast, so you might want to do this soon again. That is economics that come slash live shows january third in sentence eco, february thirteen s in l i'll be there and I hope you will do one more thing when I have you. If you like the episode on helium you are about to hear check out the two recent economics radio episodes on the macs thanksgiving day parade which as you can imagine uses quite a bit of a um as always.

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Most of us have gone to a party store by balloons, and the process is pretty simple. You pick out the color or design you want. An employee fills IT up with gas from a big cylinder behind the register, and IT rises as if possessed .

by a spirit.

I mean, imagine going back to a time before balloons and that you brought out this object that would float in the air. It's magical no matter how you slice IT.

That's so fia haze. She's a professor of chemistry at washington university in sane, Lewis and SHE says that while the balloon tends to get all the glory at the birthday party, the stuff inside of IT is the true hero.

Where that helium comes from is the decay of radioactive elements. And as they decay, they spit out an adam of helium. So every time you see a balloon that billions of years of the age of the earth undergoing that radioactive decay of a very small number of elements that are .

in the trust, now IT may seem a little silly that a billion year process ends up with a floating balloon that says happy birthday. But helium has all kinds of other applications, is used inside MRI machines to manufacturer semiconductors and to test weeks in rocket ships. And getting the stuff out of the ground is a multi billion dollar business.

The typical cost of mobilizing and d mobilizing a rig, typical day rates of drilling, these things can be pretty expensive, but he name is quite valuable. So it's worth the cost to go out there and look for the stuff.

For the free economics radio network, this is the economics of everyday thinks i'm actually crack today helium. In nineteen sixty eight, astronomers observed a yellow wavy length of light in the spectrum of the sun. IT was soon deemed to be a previously unknown element, and IT was named helium after the greek word for sun. By the late one hundred th century, helium gas was also discovered on earth in large underground natural gas deposits. And scientists began to realize just how remarkable IT was.

Well, it's not as glamorous as something like platform gold, but helium is extremely special in magical.

Again, that's so far haze SHE says that helium has many properties that make you stand out. For starters, it's one of only six naturally occurring noble gases, highly stable elements that rarely form compounds with other substances. They are called the noble by analogy to arrested craters who don't mix with the common folk.

For the everyday person, what that means is those Adams do not like to bond with anything else. We have to work extra hard if we want to create those chemical bonds.

Q liam's s noble status means we can use IT without worrying about undesirable reactions. IT can also be cooled to extreme temperatures without turning into a solid. This allows you to act as a powerful cooling inside machines.

IT can cool things into the million kelvin regime. The temperature of outer space is about three kelvin, so this is below the temperature of outer space. And only helium is able to do that.

Its molecules are incredibly small, capable of permeating almost anything. And it's the second latest element known to mankind. Only trAiling hydrogen is later than air.

So party balloons, blooms. All these things we think of for lifting applications are extremely important also.

So when you fill a balloon with helium, like what's happening inside, that makes IT rise .

those atoms or molecules, as they begin to move and push on the container, they exert tiny amounts of pressure. And if they are lighter than air, the error around IT is heavier, so the air displaces downwards and the object gets lifted upwards by the pressure of all those tiny collisions with the interior of the balloon.

All of these special properties make helium a very desirable product, and nobody knows the market Better than fill corn bluth.

the president of corn bluth healing consulting, which specializes in commercial issues related to the global healing business.

Current believe has been in healing and business for more than forty years. He says the market for the stuff is much bigger than people realize.

Most folks only are familiar with party belongs in the good year, blood on stuff like that. Well, they're about fifteen percent of the U. S. Market and about party ten percent of the global market. So you know significant, but it's not the biggest application.

History ally, that honor goes to the medical industry, in particular M R I machines, those big tubes that create detailed scans of your bones, muscles and blood vessels. There are more than thirteen thousand of these machines in the U. S. Alone, and each one holds an average of around stick thousand dollars worth of helium.

Liquid helium, which is the cold substance on the planet, is used as refrigerant in the superconducting magnets that are the guts of MRI scanners. These extremely powerful magnets become superconductors at liquid helium temperatures, which are just a little bit above absolute zero.

In recent times, helium has found an even larger market in the semiconductor industry because it's unreactive. Helium is used in factories to sweep out other gas molecules and to deposit chemicals onto silicon wafers without introducing impurities. Every product that contains a sammi inductor chip from cellphones to dish washers to suvs, benefits from helium.

They're protecting huge growth in demand for helion, for chips. So chip manufacture is gona leave MRI in the dust as the number one application in the coming years.

Hilliard s uses, don't stop there. Its largest single buyer is NASA, which uses IT to call hydrogen and fuel pressurize rocket engines and test for leaks in oxygen supply lines. The cost of helium for a typical space launch runs around twelve million bucks.

altogether. Experts estimate that anywhere from two point five to four billion dollars worth of helium gas is sold around the world every year, and most of IT comes from the united states. The us.

Is the largest producer we produce just under the half of the world's supply. But at one point the us. Produced more than ninety percent of the world's helium. So it's diminished from what I once was.

For years, helium production in the united states was mostly controlled by the government. In one thousand nine hundred and twenties, the feds set up the national helium reserve, a giant facility in amo, texas, during the space race. In the thousand nine hundred fifties and sixties, IT stockpiled bassil amounts of helium for rocket launches and build a pipeline extending from texas to kansas.

The thinking in the government when the stockpot was established was that we're gonna need a reserve of helium to support the military and airspace program. We had a huge amount helium store more than ten years world supply.

During this time, the Price of helium was stable and fairly affordable for businesses that needed IT. But in the one thousand nine hundred and nineties, the government decided to get out of the helium business.

Somebody in washington said, this is stupid. Why are we storing that much helium in the ground? Let's sell. IT often pay off the federal debt. A bill was past the helium privatization, active one thousand nine hundred and ninety six, that set up the disposal of the federal reserve.

Over the next few decades. The government auctioned off most of its helium earlier this year. The national helium reserves remaining assets were sold to a private firm.

Today, america's helium business is almost entirely privatized, and that's partly because getting IT out of the ground is IT costly endear that's coming up. The process of helium production begins in the earth's mantle, the layer of rocks surrounding the core. Over millions of years, radioactive meals like uranium and thorium decay and release helium. The gas migrates up into the sedimentary rock layer through faults and fractures, and remains trapped under the ground until IT is removed by someone like both ears.

A lame is produced just like natural gases. IT remains stored underground until you poke a hole in the ground to get IT.

Seers is the CEO of helix exploration, a company that searches for new pockets ts of helium and sets up drilling Operations. He says the vast majority of helium in the U. S. Comes from the fields in texas, kansas, oklahoma and wyoming. It's extracted is sort of a secondary product by companies like exon mobile that are already drilling for natural gas.

Most of the hand comes from gigantic fields. For instance, in the united states, sex on mobile is the largest domestic producer of hello by virtue of their field. And wilma, they produce a guess that contains various constitutes point six percent of which is healing. And because they're producing such, your volumes are able to extract the helium rather economically.

What's this? Gas mixes out of the ground. IT goes to a processing plant. In some cases, the extraction company owns its own plant. In others, IT has long term contracts with an industrial gas refiner. Empires like water, C, O two, mercury and nitrogen are removed, and the gas goes to a crayon ic process that freezes all the other impurities and isolates the helium. Then it's liquified and sent out for distribution.

IT goes into a liquid helium iow container and that contains roughly a million cubic feet of gas equivalent in liquid form. They take that to a region that needs heating, and then they run that liquid through what they call a transfer station. And they retook aged in smaller parcel for us to think of IT as a sausage maker.

So they take liquid helium, and they feel cylinders for the balloon folks. They feel gaseous, two trailers to go longer distances, or they feel liquid doors for hospitals and mr. I. S. That's usually how healing is distributed across the .

world as a final product. Helium is produced in a number of different grades. They are defined by the compressed gas association. They're expressed as a percentage of purity.

Typically you speak in five, nine, four, nine, two, nine, you know, ninety nine percent ninety nine point nine nine, nine percent five izis. The krim da rop, if you're selling IT to mr, you want six ninth. That's very, very entrepreneurs for balloons. All you atas a very low pity.

But even the low quality hillier and balloons still has to be pure enough not to cause any problems .

if there's some dangerous impurities in that guess. And they and hailed for this quickly voice effect. There's a problem there. So typically the healing you get for birthday parties is, say, ninety eight percent year.

For those who buy all of this helium, the pricing can be very complicated. Phil corn bluth, the helium consultant, spends most of his time helping clients navigate the market.

IT varies a lot based on where you are in the supply chain and what quantity you're buying under what contract term.

In bulk, helium is generally sold in units of one thousand cubic feet or mcf, but as IT moves down the supply chain, it's broken up into smaller containers and can be sold by the cubic foot or the leader. A party store, for instance, might buy a standard canister containing two hundred and ninety one cubic feet of helium for around five hundred dollars.

That's enough to fill something like six hundred eleven in incitec balloons, which means the store pays about eighty cents for the helium in each balloon. A large party store can easily go through ten of these canisters every week. But if you're buying helium, you never know what you're going to pay from week to week because the supply is unstable.

Two thousand and six to two thousand, seven was healing shortage. One point out, two point out was some more in two thousand and eleven, the end of two thousand and thirteen. Shortage three point out was two thousand eighteen to early two thousand twenty. And then shortage four point, I was early twenty two through the end of twenty three. The supply chain is whatever called fragile.

The healing market is extremely excepted to supply chain disruptions. For starters, there are plants, outages, fires and even explosions.

Most of these plants are hydrocarbon production plants. They have explosive stuff there. And if somebody screws up, these plants can blow up.

Sir says that as with oil, the industry is also affected by international conflict .

geopolitically. Helland is a hot button, Michelle, because half of helland comes from a guitar. And algeria and then russia has a large resource that they are currently sending to china right now. So lots of things can happen politically where our supply will be adversely affected .

during shortages. Certain customers tend to get d priorato zed, especially those deemed to be less than critical. Like the party store owners.

he name is very much a tree oge unit. The most important users, the MRI chip manufacturing fiber optics, those are the most high volume users of heels. So y'll usually get the most product. And then you go all the way down to the balloon guys. And often times they are completely cut out and they have to have source the helium somewhere else.

So the balloon guys are at the bottom of packing order.

I would say. So yes.

it's unfortunate for party in these.

In times of shortages, they're blend that guess to save some money because they don't know when they're get their next cylinder of heat them.

When supply is low, helium Prices tend to be much higher, but many of the bigger customers can change their buying habits when the Price of helium goes up or down. That's because in many industries, there is no substitute for helium.

M, R, I, machines cannot work with that. He am. The space launches, rocket launches, right? You need something that will not react with those propels, otherwise those rocket engine storage collapse is like a coat. Can you must have helion.

Luckily, helium shortage four point o seems to be over now and Prices have come back down a bit. But demand for helium is only growing, which is why there's money to be made in hunting for new sources.

In order to fill the void we need define more molecules in. The only way to do that is to explore for IT, and that's what we're doing.

His company, helix exploration, is one of around sixty firms actively searching for new helium deposits.

He expiration is a very risky endeavor. We are traditional wild cutters. We are looking for stuff that were not sure is there.

But we have a pretty good idea. IT is all that low. Hanging fruit is pretty much gone.

Now we have to fill in the gaps of where we think helium should exist. And that takes various components of geological expertise. For instance, is an area that has adequate uranium etherium in the basement.

Rock doesn't have adequate false and fissures, does that have a trap? Doesn't have rest workload. All of these things are important in the pursuit of helium.

This exploration may help solve supply issues in the short term, but IT doesn't quill potential problems in the distant future at one point to another. All healing um that's mind from the earth and used commercially, escapes to the atmosphere and goes into outer space where it's unrecoverable. That concerns Sophia hayes, the chemistry professor at washington university.

There have been different estimates that at the rate of use, we may run out of helion one day. I think that that's quite a real worry for the following reason because IT has no substitute and because every adam of helium can escape the earth every time we let us go, we still have to recreate that healing in one adama at a time through radioactive decay. Which natural process we are using IT up faster than it's being replaced? Ed, and so by definition, that's an unsustainable situation.

Scientists are working on recapture systems that can trap and recycle halem in certain applications. And in recent years, manufacturers have also developed much more efficient MRI machines. They use just seven leaders of helium per machine compared to the fifteen hundred leaders used by older machines. But haze says there's another way we can all make a small difference.

Balloon should be a luxury item rather than a common item. It's not that i'd like people to stop having balloons, because one of the great things about those balloon is that gets people to care. If you look at that balloon and realized how incredibly magical IT is to be able to hold that in your hand and to know that when you let that go, the gas is going out in the outer space, never seen on earth again. Well, that's a pretty amazing thing.

For the economics of everyday things, i'm actually cracked. This episode was produced by me and series and mixed by germy Johnson. We had help from Daniel morrow rapson.

Helium is not usually like big coat tail party conversation, right, and said I am not consulted in the helion business in a crack joke about done of dark voice, and let you .

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