Updated June 2024
What is Helium
Helium is a naturally occurring colourless and odourless inert gas produced by the decay of uranium and thorium within the Earth’s mantle and crust. It is a nonrenewable resource that cannot be manufactured.
Helium can be extracted from the atmosphere, but this process is costly. However, when trapped in the subsurface, helium can concentrate in underground reservoirs and be cost-effectively extracted. In Alberta, helium can also be found associated with oil and gas reservoirs or within a helium play. Helium is generally found in low concentrations (below 0.1%), and its extraction can be profitable when concentrations exceed 0.3% helium. However, the economics depend on such factors as the cost of processing, the helium price, and proximity to markets.
Helium has many uses, including magnetic resonance imaging (cryogenics), lifting (use in balloons), electronics, optical fibre, welding, leak detection, and more (see image below). There are many applications where helium cannot be substituted, indicating a strong and stable demand over the coming years.
The depletion of helium reserves in the mid-continental U.S. region raises concerns about domestic supply. With helium being an indispensable resource in various critical industries, this highlights the need for strategic resource management and exploration.
Royalty Program and Alberta's Advantages
In May 2020, the Ministry of Energy and Minerals introduced a 4.25% royalty rate for helium.
Alberta has several competitive advantages to become a key supplier of helium. These advantages include the province’s helium reserves in the regions where oil and gas drilling has occurred, easy access to the U.S. (the world’s largest consumer of helium), well-positioned infrastructure, and industry expertise. Current development activity for helium is focused on the southern part of the province.
Production in 2023 and Forecast
In 2023, total helium production was 2.1 thousand cubic meters per day (103 m3/d) from six producing wells (see Figure S9.3). Production is forecast to reach 12.5 103 m3/d from 28 wells by 2033. The production and well forecasts involve weighing the risks based on the likelihood of meeting the project’s operational date and production capacity.
Projects
Thor Resources, Weil Group, and Royal Helium’s Steveville purification facility were the source of helium production in 2023. The Steveville helium purification facility was officially launched on December 16, 2023.
First Helium, Global Helium, and Royal Helium are currently developing helium projects in Alberta with wells expected to be placed on production in the coming years.
Limitations or Risks to the Outlook
Land leasing and tax incentives are the two primary risks to helium production in Alberta:
- Many economic areas for helium development are also suitable for carbon storage, limiting the availability of land leasing for helium production.
- Helium producers have lesser tax incentives than junior mineral explorers to mitigate upfront exploration and production costs.
The Alberta helium industry's progress may be hindered should the current high prices begin to diminish. Anticipated production increases from Russia and Qatar indicate a potential global oversupply of helium later in the decade. Consequently, provincial start-ups have a short window to secure funding and start helium production before prices decline and investor interest diminishes.
