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Who knows? There is a shortage of global helium – and it can appear more than balloons

From the vast area of ​​southwestern Saskatchewan, a solution arises for a slightly discussed problem – gaps in the global helium supply chain.

In recent years, when fears of lack of helium crept, profit seekers have traveled to the heart of Canada and drilled deep into the earth in search of helium; and at least one company there has started to produce gas commercially.

Party City is just the tip of the iceberg

Nicholas Snyder, chief executive of Helium North America

The helium pinch branch began to focus early this month when New Jersey-based Party City announced it had raised prices in certain balloon categories in the face of "helium headwinds." The chief executive said "nature" would determine whether there was enough helium to meet company demands; and he refused whether prices would drop.

People walked out of the Party City shop in a balloon in Miami, Florida. Party City announced that it will close 45 stores by 2019 due to a lack of global helium.

Raedle / Getty picture

However, party balloons are only a small part of the helium market; and its use in magnetic resonance imaging, or MRI, machinery, space exploration, semiconductors, and other technological applications has sparked wider concerns that price spikes can disrupt more than balloon sales – and Instagram and other social media posts where balloons are formed in the background important.

"Party City is just the tip of the iceberg," said Nicholas Snyder, chief executive of Helium North America, who divided his time between New York and Calgary, and whose company had explored in Saskatchewan near the Montana border.

Snyder said the company's goal was to start commercial helium production within two years. He claimed his company had discovered new helium fields in decades, and had ambitions to start producing around one percent of global supply in two years, gradually increasing that amount further.

Snyder estimates that the company has spent tens of millions of dollars on exploration, and will spend tens of millions more to build factories and future exploration.

"We really focus on not only one deposit, or the field, but the long-term helium production business in Canada," he said.

We are the first crazy people to poke a hole for helium

Jeff Vogt, chief executive of the Weil Resources Group based in Richmond, Virginia

Of course, his claim to be the first of any helium related in Saskatchewan is not denied.

"We are the first crazy people to make holes in the ground for helium," said Jeff Vogt, chief executive of the Virginia-based Weil Resources Group, which began producing small amounts of commercial helium near Mankota, Saskatchewan in 2016.

Now, the company is also exploring nearby in Alberta.

Although helium is not really rare, it is generally a by-product of natural gas or liquefied natural gas production, and its value when compared to these commodities is very small.

"I have heard it describe it as a tick on the tail of a dog," said Phil Kornbluth, of Kornbluth Helium Consulting, a market analyst who sits on the North American Helium board. "This is not big business."

He estimates the current market size is now US $ 6 billion after prices surged dramatically in 2019.

However, with most of the production linked to other gases, supply cannot be easily upgraded to meet demand, and Kornbluth said the market is currently lacking.

Goodyear releases helium from its famous balloon fleet in 2017.

Photo of AP / Eric Risberg, File

"I have never heard of a semiconductor laboratory shorted or a rocket launch closed," Kornbluth said, but he added prices rose and not all customers received their full allocation.

Much of the price increase was due to the fact that the US federal government had sold reserves that initially began in the early 20th century, when hot air balloons were still used more widely.

Snyder said his company had sold helium supplies at prices of more than US $ 500 per thousand cubic feet, almost 80 percent higher than the US $ 280 price reported at the latest US federal government auction.

Both Snyder and Vogt describe their search for finding and producing helium in almost mystical terms: Gravity cannot hold it back. After escaping into the atmosphere, he lost forever.

"It's about geological entrapment of molecules that if not float to the sun," Vogt said.

Members of the party shop industry say it's easy to understand why helium is highly respected.

"Balloons are the fastest, cheapest and most colorful way to decorate a room," said Mel Grevler, founder of Party City Supply Depot Ltd, a 12,000-square-foot store in Thornhill, Ontario.

So far, Grevler said he had been able to avoid the rise in balloon prices by locking up the helium contract a few years ago when concerns about shortages first emerged.

Asked what would happen if helium became too expensive for balloons, Grevler did not beat.

"That will be a crisis," he replied.

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