So What? The US is a supplier of helium. The US may get out of the market. Prices will rise until other suppliers expand output. Overall, in the long term, the helium market will work fine just like the other markets we dont need the US government to supply.
As far as I have understood it, the US government was selling off helium stockpiles cheaply for the last 20 years, and now the consumers aren't willing/able to pay prices high enough to encourage production to rise quickly enough...
The U.S. government is selling large quantities of helium at below market prices, apparently (though I'm not sure what a below market price is...if they are willing to keep selling at that price doesn't it become the market price?).
Economics classes for the next century are going to use this as THE textbook argument against government intervention in commodity markets. The US amassed a huge stockpile of helium. But it was clear helium was no longer of strategic importance, we signed the Helium Privatization Act to sell off the reserve.
This, ironically, put the US government directly in control of a helium cartel. The US flooded the market with helium for decades at a set price. Now the reserve is mostly sold off and it's a relative "free" market. But the bubble has burst, no more artificially cheap helium, and most buyers find themselves priced out. There will be an "adjustment" in many related industries.
Can we not let the market sort it out? If we don't interfere in the free trade of helium and plausibly commit to never do so, the current price will always be the best estimate of the future price that we have, discounted by the expected interest rate. And thus if we are going to be running out and that is going to cause a shortage, the price will go up now and incentivize conservation.
From what I understand this whole 'shortage' is just a result of the US selling off its massive helium reserve over the years. So the prices are artificially low due to this, and now they are going to go up since production will have to meet demand. Nothing really to do with running out of helium or a shortage. This is more like there was a huge artificial surplus and its run out now.
A neighbour of mine is a MRI hospital radiologist, it seems odd that instead of talking abou the price of fish there is much to discuss about the price of Helium.
This is HN; so is there any way market forces fix this?
Qatar is producing it, and most of the supply was down to the US government treating it as a strategic asset. Alas as ever, in liquidating their stores they depressed the price.
(I assume, I'm not a He broker)
That makes sense. If the US government is selling it cheap, those who purchase from the US and other holders have the incentive to hold on to their helium til later when the price returns to normal. You're right.
Oil is a good example. That's why embargoes don't work. The target country just has to buy it through a third party to defeat the embargo. Embargoes can really only work when the country embargoed is shooting itself in the foot with price controls, as we did in the 70s.
That article reads a lot like "Peak Oil" concerns. There is a lot of Helium available - [1] The global reserves of helium are known to be approximately 41 billion cubic meters. Most of them lie in Qatar, Algeria, the USA and Russia. Annual global production of helium is about 175 million cubic meters, and the USA remains the largest producer. "
Regardless, this is something the market can correct for very, very easily. As helium supply becomes more scarce, the price will go up, resulting in greater supply. Most of it comes from natural gas, and is so cheap [2] it's not worth capturing. Oil trades for around $100/barrel. Helium trades at $100 for a thousand cubic feet (albeit in gas form)
Some of the problems with Helium is that Physics experiments use a LOT, and previously was so cheap that it wasn't worth trying to conserve. That's changing - [3] A recycling system can recapture about $12,000/year of lost helium for a single scientist.
From reading articles - apparently the problems isn't so much that the cost of helium is increasing - but that it's been so cheap because of the US Natural Reserves making it completely non-competitive to capture - they are basically giving the stuff away for next to nothing.
I thought the only reason there's a predicted shortage is that stockpiles are being aggressively sold off, lowering the price below the point where it would be profitable to produce helium on the market. Granted, once the stockpiles run out, there could be a rough period, but the price (i.e. what buyers are willing to pay) would probably quickly return to levels which would make production profitable.
Yes, but for better or worse, we have lots of natural gas producers, and they'll be in business for a long time. And once the selloff of the US's strategic helium reserve is done with and prices stabilize, more natural gas producers will actually bother to capture their helium.
isn't the helium shortage affected by the market price of helium?
just like we were afraid of peak oil until we broke through the price barrier to distilling oil from tar sands and suddenly there's plenty of oil to go around as long as people are willing to pay $80/barrel ?
Theoretically we're running out of Helium, just like we're theoretically running out of oil, but actually we've still got plenty left. Because of the US dumping their stocks the price has been artificially low making it unprofitable to extract from natural gas which contains a lot, and it has been just released in the atmosphere because of that instead of contained. As soon as prices start to reflect the extraction price there won't be a problem anymore.
Similar concerns were raised when China embargoed rare metals. In reality, the industry adapted smoothly and it's not the topic anymore.
And yes, strictly per economic theory (which is very practical) we will never run out of Helium. Just the price will rise up to the point when alternatives (and a research into) will became economical.
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