The Ballooning Investment Potential of Helium
The second-most-abundant element in existence is surprisingly difficult to find in useful bulk quantities.
Helium is estimated to make up 25% of the total mass in the universe.
But much of that 25% is trapped inside of stars, which generate energy by fusing hydrogen nuclei into helium and helium nuclei into heavier elements.
Source: Science Notes
Finding it in a form that isn’t millions of miles away and heated to tens of thousands of degrees Fahrenheit is trickier — and that’s a problem, given dwindling terrestrial supplies and growing demand for the “star gas”.
Party City’s Problems Signal A Serious Helium Shortage
Back in 2019, Party City (NYSE: PRTY) announced that it was closing dozens of stores as it struggled with diminishing helium supplies among other challenges.
But the helium shortage at the balloon and costume vendor is just the tip of the iceberg.
The federal government maintains a National Helium Reserve of more than 1 billion cubic meters of the gas at a facility near Amarillo, Texas. But it has been gradually selling off that reserve since 1996 due to a lack of congressional interest in funding its maintenance.
Source: ZME Science
It has recently started to realize that that probably wasn’t a good idea, because helium is tough to produce. Trace amounts of the gas are recovered from rock formations as a byproduct of natural gas drilling, but much of it dissipates into the atmosphere as soon as a deposit is exposed to the air.
And as you can see below, helium demand is expected to significantly outstrip supply over the course of the 2020s.
Source: LCGC North America
There’s even a theory that space-obsessed billionaires like Elon Musk and Jeff Bezos are actually motivated to explore the cosmos by a desire to mine helium on the Moon and Mars — both of which have significantly larger deposits than are currently available on Earth.
It would certainly be a good business idea, given the expanding use cases for helium…
Why Is Helium So Valuable, Anyway?
The gas has been called “the workhorse of chemistry” due to its non-reactivity with other elements and its ability to cool down to near-absolute-zero temperatures (as low as minus 450 degrees Fahrenheit) which otherwise only exist in outer space.
It’s used in MRIs, nuclear magnetic residence, semiconductor manufacturing, and high-end hard drives. (Helium-filled hard drives are believed to perform faster than the standard air-filled ones).
It’s also used in a variety of scientific experiments, many of which are being shut down today due to researchers’ inability to source the gas.
These market factors have helped propel the price of a liter of helium from $100 per thousand cubic feet a few years ago to over $600 per MCF today.
Bringing helium supply to market — even exploring for it — is already driving significant investment interest.
Call it like you see it,
Publisher, Resource Stock Digest
Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder and editor of Foundational Profits, Family Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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