To the untrained eye, the gathering of pipes and buildings rising out of the prairie 200 kilometres east of Calgary seems like another pure gasoline processing plant in southern Alberta.
However the Steveville plant is not targeted on extracting hydrocarbons. As a substitute, the prize it is looking for deep underground is helium.
The ingredient is mostly related to social gathering balloons, nevertheless it has myriad different functions starting from its use in MRI machines to semiconductors to the aerospace business.
Helium provide has tightened and costs have climbed lately, owing partially to the gradual depletion of the U.S. strategic helium reserve together with a cascading collection of 4 international helium shortages since 2006.
Now, a brand new crop of helium prospectors on the Prairies hope to money in on the in-demand commodity.
“There’s such a scarcity that [companies] will come now to the producers and attempt to contract on the volumes earlier than you’ve got even began producing them,” mentioned Andrew Davidson, president and CEO of Royal Helium, a publicly traded firm that owns the power close to Brooks, Alta.
The plant began up in October and has already secured a long-term contract to produce an American house launch firm — although it is tight-lipped about which one.
Additionally in October, Royal Helium joined 4 different helium startups to create the Helium Builders’ Affiliation of Canada, an business group representing corporations at varied phases of exploration and manufacturing.
The group believes Canada has the assets and know-how to change into a better participant within the international helium market, and says it’s notably well-suited to producing helium for North American consumption.
It is pushing for beneficial authorities insurance policies to ramp up manufacturing as quickly as potential.
“We now have this chance, there is a rising want and from a safety of provide perspective, it makes an terrible lot of sense,” mentioned Richard Dunn, the group’s govt director.
Nonetheless, it is not clear how lengthy the window of alternative might final. As Canadian corporations race to extract helium, they will face competitors from international vitality giants with the identical concept.
The case for Canadian helium
In response to the USA Geological Survey, Canada has about 70 billion cubic ft of helium assets, the fifth largest focus on this planet. Most of that’s present in southern Alberta and Saskatchewan.
Saskatchewan is additional alongside in helium improvement. Land leased for helium exploration in that province has quadrupled since 2018, in line with the Canada Power Regulator. The federal government has set an bold purpose of supplying 10 per cent of the world’s helium by decade’s finish.
One of many extra outstanding gamers is North American Helium, which just lately introduced its seventh helium purification facility on-line close to Ponteix, Sask., and boasts the rights to greater than 9 million acres of potential land.
The Prairie provinces have a number of benefits within the subject.
One is that aspiring corporations have sense of the place to search for helium, due to historic information generated by a long time of oil and gasoline exploration.
The Royal Helium web site, for instance, was first drilled again within the Forties.
It wasn’t pursued because it did not yield a lot methane, and helium wasn’t then thought of a very helpful commodity, Davidson mentioned. However information from that decades-old exploration meant the corporate knew the place to look when it drilled once more, this time on the hunt for one thing completely different.
“You can begin this course of by basically mining information that different individuals have compiled over the previous 50 to 60 years,” mentioned Davidson.
One other benefit: there are already individuals dwelling in Alberta and Saskatchewan who know find out how to run a pure gasoline plant.
“The supply of labour to do that is plentiful,” he mentioned.
The push to extract extra helium domestically is nice information to Vlad Michaelis. The affiliate chemistry professor on the College of Alberta has been repeatedly pissed off by the previous decade of helium shortages.
His analysis depends on liquid helium to chill superconducting magnets that have to be stored at two levels Kelvin, or -271 C. When there is a helium scarcity, the lab has to scramble to discover a new provider and weigh whether or not to close one of many machines down — a course of that is not simply reversed.
“If we are able to discover a Canadian answer … that may principally guarantee a helpful and protected provide that we are able to rely upon for all of Canada and North America usually, I believe that’d be a unbelievable concept, unbelievable alternative, and one thing we have most likely wanted for no less than a long time,” mentioned Michaelis.
Finish of growth occasions?
However momentum for the nascent helium business may falter if excessive costs begin to taper.
Each Russia and Qatar are ramping up manufacturing within the years forward, which means the world may see an oversupply later within the decade, mentioned helium guide Phil Kornbluth, proprietor of Kornbluth Helium Consulting in Bridgewater, N.J.
That does not imply Canadian corporations will not be capable of promote their helium, he mentioned. International locations just like the U.S. will presumably be comfortable to purchase from a reliably steady and pleasant buying and selling companion.
However, he added, “they are going to be promoting the helium most probably at costs which might be considerably decrease than they’re now.”
Kornbluth mentioned that leaves startups with a comparatively brief window of time to safe funding and begin producing helium earlier than costs fall and buyers’ curiosity wanes.
However securing funding is a problem even now, mentioned Dunn. A major hurdle is that helium producers aren’t eligible for a similar tax incentives utilized by junior mineral explorers to mitigate upfront exploration and manufacturing prices and to courtroom buyers.
The helium affiliation needs entry to those self same incentives and has known as for change in a submission to the upcoming federal price range.
“There is a window of alternative, as with something, and we’ll want to maneuver on it expeditiously to win,” mentioned Dunn, including Canada additionally faces competitors from non-public U.S. corporations with comparable plans.
Nonetheless, Dunn is bullish about the way forward for Canadian helium. Because it’s utilized in a better number of functions, he believes the necessity will solely proceed to develop, and that Canada may play an vital function in bolstering the North American provide.
Davidson, with Royal Helium, is equally optimistic.
“What we might prefer to see,” he mentioned, “is 2 extra of those crops within the subsequent 12 to 18 months, purifying helium on each the Alberta facet and Saskatchewan facet of the border.”
