A few weeks ago, the Medicine Hat News reported that the City of Medicine Hat is planning to drill exploratory wells to look for helium. If that activity bears fruit, it could be a boon for Medicine Hat. Which begs the questions, what is helium and what makes it an opportunity worth pursuing?
Although best known for its use in party balloons, helium is primarily used in high-tech industries such as health care, electronics and aerospace. In fact, MRI cryogenics, electronics and aircraft lifting account for over 50 per cent of global helium consumption.
The health-care industry needs helium to cool the magnets in magnetic resonance imaging (MRI for short) machines. Over the past 10 years, demand for MRI exams has risen from 85 per 1,000 people to 115 per 1,000 as a result of an aging population.
The $330 billion semiconductor industry relies on helium. So does the $2 billion fibre-optic cable industry. Lockheed Martin uses helium to lighten the load of aircraft capable of carrying 21,000 kg of cargo while Alphabet’s Project Loon uses helium-filled balloons to provide internet to developing nations. The world-famous Large Hadron Collider uses 120 tonnes of helium to cool its magnets.
As demand for helium increases, the price of helium has followed suit, travelling from $80/Mcf in 2007 to $200/Mcf today.
The United States is currently the largest helium supplier in the world, accounting for 41per cent of global supply. However, US dominance is set to drop as it works to phase out its primary helium stockpile over the next five years. The second-largest helium producing country — Qatar — is struggling with blockades and other short term risks.
The Americas and Asia-Pacific account for 68 per cent of the global helium market. Medicine Hat’s location on the Trans-Canada and Crowsnest Highways provide direct access to the Port of Vancouver and the Asia-Pacific marketplace, while it is possible to serve the Americas via overland border crossings.
From a labour force perspective, Medicine Hat is home to an experienced petrochemicals processing sector with the skills to match. Add in a provincial government hungry for petrochemical diversification, and the case for adding value to helium right here in Medicine Hat starts to make sense.
Indeed, the Gas City is uniquely positioned to extract value from helium and continue to be known for another type of gas that has made it what it is today.