Helium industry gets lift in Saskatchewan as U.S. supply deflates

A shakeup in the global helium market has sparked an exploration rush in southern Saskatchewan, where the gas can be found in the province's Precambrian basement, trapped in rock that's about 1.8 billion years old.

Not just the stuff of birthday balloons, helium is a workhorse of an element, supplying an industry worth an estimated $4.7 billion US.

It gives airships a lift and helps deepsea divers breathe safely. It's also used in rocket engines, nuclear plants and MRI scanners, and has a growing number of high-tech applications.

In the 1960s, when helium was considered a strategic military resource, the U.S. government built up an underground stockpile near Amarillo, Texas.

That reserve has supplied almost three-quarters of U.S. demand, but the government has said it wants out of the commercial helium business by 2021.

And as the federal supply dwindles, industrial gas companies are looking north to fill the gap.

Exploration boom

"It's actually quite busy right now," said Melinda Yurkowski, a geologist with the Saskatchewan Geological Survey.

"We've got a number of companies that are doing some exploration and have actually developed some wells in the southwestern portion of the province."

The province issued 59 helium leases in 2016 alone; it didn't issue any the year before.

Yurkowski has been mapping where helium is likely to be found by analyzing the data from wells drilled by oil and gas exploration companies over the years. Helium, she says, often turns up in the same neighbourhood.

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That's what Weil Group Resources found when it tapped two old natural gas wells near the village of Mankota, in southwestern Saskatchewan.

Earlier this year, the Virginia-based company started up a high-grade helium-processing plant in the area.

The facility has the capacity to produce 40 million cubic feet of helium a year a small fraction of the estimated 6 billion cubic feet the world uses annually.

Downturn distraction

The plant is not a big local employer only two operators are needed to run it but Saskatchewan's fledgling helium-refining industry is getting a toehold at a time when the province could use the business.

With the downturn in the oil and gas sector dragging on, the Weil plant, which cost $10 million US to build, was more than welcome.

"It's good to see, especially in rural Saskatchewan, where there isn't much," said plant operator Harlan Highsaw, who used to work in oil and gas.

He's pleased he made the move to the helium business, even if it means he has to field the odd joke about whether he talks in a chipmunk voice all day. "People [make] jokes about trailers floating," Highsaw said.

The Weil plant isn't the only place in the province where helium-refining is happening. Canadian Helium Inc. and Quantum Helium Management opened a plant north of Swift Current in 2013.

According to helium analyst Phil Kornbluth, it's a good time for Saskatchewan to position itself as a global supplier of helium.

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Canada has the fifth-largest helium resource in the world, behind the U.S., Qatar, Algeria and Russia, according to the U.S. Geological Survey.

"There's the potential for a couple of liquid helium projects to be built in Saskatchewan," Kornbluth said, adding that industrial gas companies prefer to get their supply from a place that's politically secure.

"I certainly would rather depend on a source in Canada than a source in Russia, where, you know, who knows what's going to happen in the future in terms of the relationship between the West and Russia."