Joe Weisenthal: Here's something I've learned over the years: anytime we talk about niche commodities, it's often harder to find anything resembling spot prices at all, including rare earths. There's literally nothing on the terminal about helium pricing. Tell us about why that is.

Nick Schneider: It's a pretty unique market. There used to be more markets like this, but companies like Bloomberg and many others have helped make things more efficient. In general, the end-user price is considered to be about a 6 billion cubic foot per year market, worth about $6 billion a year. That implies about $1,000 per MCF to the end user. An MCF is 1000 cubic feet, the standard denomination used in natural gas. So, that implies it's a dollar for one cubic foot. Since you insisted on bringing a helium balloon into the studio, I'd fact-check you and ask what you paid for that.

Joe Weisenthal: Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway: And I'm Tracy Alloway.

Joe Weisenthal: Tracy, one of the things I've been learning over the last few weeks is that a lot more than oil comes from, for example, the Middle East. If there's war breaking out there, we often just think about oil. My mind would typically stop at 'what's the price of oil?' and we all watch the price of oil. But many other critically important things are sourced from that region. I'm not joking. I'm laughing because we have one of those things floating between us. Speaking of stuff that comes out of the Gulf region, here's one of those things. Listeners can't see it. Not the aluminum itself, though aluminum probably also comes out of the Gulf, but helium. Tracy is holding a helium balloon. She went out and got a prop.

Tracy Alloway: I didn't. One of our lovely producers did it. I have to say, I haven't held a balloon for a long time, and it's surprisingly entertaining.

Joe Weisenthal: Hold on to it. To go a little bit further, I feel bad for people in the helium industry because my understanding is that helium has some pretty important industrial properties, and there aren't many substitutes for it. But when someone mentions helium, people think, 'Oh, clowns will make funny voices.' Any chance we have to bring one of the commodities we talk about on the show into the studio, I'll seize it. So, here is some helium. The fact that the balloon is floating indicates it must have interesting properties as an element, perhaps for other applications. It tells you something about it as an element.

Tracy Alloway: It's funny you mention that because initially I was going to take this balloon and breathe in the helium for funny voices. I thought for an audio medium, maybe it would work. But then, researching helium, I read it comes partially from radioactive decay. So I thought, maybe I don't want to breathe it, though I also read it's non-toxic. We clearly need to talk about what helium actually is.

Joe Weisenthal: That's right. We've been getting requests for a helium episode ever since. There was a headline today about Qatar and helium production being one of those first measures. Anyway, there's been a lot of requests for a helium episode. We've never done one. Years ago, I used to lift weights with this guy in the East Village, an entrepreneur involved in helium. He said, 'You have to talk to my friend, you guys should do an episode on helium.' Then I got connected with our guests and asked, 'Do you know this guy in the East Village?' Because, not everyone in Canada knows each other, but everyone in the helium industry almost certainly knows each other. He replied, 'Oh, yeah, of course, I know that guy.' It seems to be a small, tightly-knit industry, which is why we're talking about it today. What is helium? Why is it important? Where do we get it? Why is its supply impaired right now? Many unanswered questions.

Joe Weisenthal: We have the perfect guest. We're speaking with Nick Schneider, founder and CEO of North American Helium, which mines and sells helium out of Canada. Nick, thank you so much for coming on Odd Lots.

Nick Schneider: Joe, Tracy, thanks for having me. How annoying is it that we brought a balloon, and everyone, 99% of the time, thinks 'oh, he has a helium company, it's just for balloons, so it can't be that important'? I've gotten used to it. My young kids had a school exercise asking what their parents did, and they said I blow up balloons. So the teachers definitely think I'm a clown. We all get used to it.

Joe Weisenthal: In all seriousness, what are the industrial applications for helium beyond entertaining us in balloon form?

Nick Schneider: The biggest demand source, which you've probably seen in the news a bit because of events in Iran, is manufacturing semiconductors. Beyond that, one of the fastest-growing end uses is launching rockets for space exploration. There are also many durable, long-standing uses, including leak detection for everything from every cell in an electric battery to complex machinery manufacturing, fiber optics, titanium, MRIs, and NMR for drug discovery. It's widely used across all technology.

Joe Weisenthal: What is it about the element helium that gives it these properties, making it useful across such a wide range of industrial applications?

Nick Schneider: What makes it so useful are three or four completely unique properties. One is that it has the lowest boiling point of anything in nature. So liquid helium is about 4 Kelvin. I don't have my conversion in front of me, I think that's -270-something degrees Celsius. So it's the coldest substance on Earth, and that's really important for any sort of superconducting magnets.

Joe Weisenthal: Google says that's -452°F.

Nick Schneider: Yeah, that's quite cold. For a Canadian company, Kelvin is our common language. We don't have to fight Fahrenheit versus Celsius here. We're going to clasp hands with Kelvin anyway. Keep going. So just the boiling point alone makes it very unique and important. If you want something very cold, and that's primarily low-temperature physics and superconductors, you need to use liquid helium for that. But the boiling point is also important for launching rockets because if you're launching rockets, you can't pump the liquid rocket fuel into the engine fast enough because the volume is so large. So you need to pressurize those rockets. That is primarily done with helium because it is lightweight, but also it's the only substance that is non-reactive and remains a gas at the temperature of liquid oxygen or liquid kerosene.

Joe Weisenthal: Okay. And where does helium come from?

Nick Schneider: Well, we forgot about all the other important parts of what makes helium.

Joe Weisenthal: Yeah, yeah. Oh, you're a dud. Yeah. Sorry. Keep going. Yeah. All right. Nick Schneider: So it also, in addition to being a very cold substance as a liquid, it's also a great heat transfer medium. If you think about the fiberglass insulation in your walls, it's a good insulator. And the copper pan you cook eggs in, it's a good heat transfer medium. No one really thinks about that with gases. But helium is very good at transferring heat. If a deep-sea diver breathes a helium-oxygen mixture so they don't get nitrogen narcosis in that high-helium atmosphere, they have to heat their habitat to about 98 degrees, and they'll start shivering because nitrogen is a very good insulator, and helium is a very good conductor of heat. That becomes important in semiconductor manufacturing because as they're doing the lithography process, they need a small-molecule carrier gas. And helium is the smallest molecule in nature. That's also something that can transfer heat away to avoid errors, and is non-reactive. So, what makes helium demand so durable in some of these applications is that you're using more than one of the molecule's unique attributes.

Joe Weisenthal: Just to be clear, on semiconductor lithography, the actual etching, how is the helium used in that process? Is it just in the environment around to keep it cool, or how is it being deployed?

Nick Schneider: I'm not an expert here, I don't want to get out of my depth. But basically, they have a light source and a mask, and then they have to deposit something on there, that is vapor deposition. They need a carrier gas for whatever they're depositing on there, and they need that to be something with a very high heat transfer rate and also a small molecule. They use it in a bunch of other parts of the semiconductor process, but many of them, like cooling the backside of the wafer, you can recycle. It's the lithography process where they're essentially polluting the helium with other volatile compounds. That's what's causing demand to grow so quickly in semiconductors. And I've seen estimates that the new leading-edge chips use ten times more helium per chip than older technologies. So the helium demand from that sector is growing at roughly double the volume of Silicon from that sector.

Joe Weisenthal: Okay. And I feel very afterschool special asking this next question while next to a balloon. But where does helium actually come from?

Nick Schneider: So helium is only created on Earth by, as you said, radioactive decay of uranium and thorium. Helium itself is not radioactive. And divers can breathe it as long as there's oxygen in there as well. What's interesting about helium is that unlike any other critical mineral, once you use it, it leaves the atmosphere, so you can't get it out of a landfill after the fact. So that means that you can only find helium on Earth, underground, where it's been trapped. And the generation time scales are roughly an order of magnitude larger than for oil and gas. So an oil and gas deposit might have taken 10 million years to be created; in helium, you're talking about hundreds of millions of years because it's a very slow process.

Joe Weisenthal: And then what's its connection? So, we're going to get to North American Helium and the deposits that you have access to. But there are helium deposits, and then helium also emerges as a byproduct of natural gas. So talk to us about how helium comes out of the ground, typically out, you know, we're talking about the Middle East somewhere, Qatar, where there's a lot of gas versus, say, where you're mining here. And then we'll get into some of these different processes.

Nick Schneider: That's really primarily a function of exploration. Okay. Helium is much rarer than natural gas. But most of the world's helium supply comes as a byproduct of natural gas, because there's been a huge amount of exploration drilling for natural gas. So that's where they found it. And there's one gigantic field in the US mid-continent called the Yucatan that's been on production for 100 years. That's what we use to originally fill the Federal Helium Reserve. The field in Qatar, which they share with Iran, although Iran is not able to extract helium, that has 0.02% helium in it. So it's a very, very small quantity. But because they're doing so much pre-treatment, because there's hydrogen sulfide in the gas, and because the scale of their LNG facility is so large, that's the largest single source of helium in the world.

Joe Weisenthal: This is really helpful because I just assumed that helium was just like another byproduct thing that shows up anytime you're looking for natural gas. But it sounds like no, the reason it's there is just because there's been a lot of exploration in that area. And they found helium, but that it's not inevitable that anywhere you have natural gas, you're going to find helium.

Tracy Alloway: So, on that note, if I go exploring for natural gas and I happen to find a helium deposit, what happens to that helium if I decide I want to monetize it? How do I actually extract it from the ground? How do I store it? Do I set up a helium facility right next to where the deposit actually is, or do I move it somewhere else? What's the next step in the process?

Nick Schneider: The way that the gas separation process works is, for the most part, you're actually separating everything except for the helium, because helium is a small, non-reactive molecule, you can't just take that out. So, for the most part, helium always shows up with nitrogen. So you'd already have a high nitrogen content in the gas, and then you're going to remove the nitrogen and the methane and be left with the helium, which you can then purify. And there are really only a couple of fields in the world. There's one field in Algeria that's been on production for a long time, and it's falling off. There's one field in Siberia. There's the field in the Middle East, the field that's been depleting for a long time in the US mid-continent, but it is really quite rare. And if you think about what are the ingredients you need for this, you need to have an area with uranium and thorium. And we sort of know where that is, because the US and the Russians during the Cold War looked all over the world for uranium. And you need to have an area where you've got a sedimentary basin where you're going to have traditional oil reservoir rocks, you're sort of looking for sandstone. And in general, you're looking for an area where there aren't any mountains because it's a small molecule that wants to escape to the surface. So if you are in a tectonic area, that's going to be a big problem for you.

Joe Weisenthal: That's interesting. So the existence of mountains implies... I hadn't thought about that at all. I wouldn't say, 'Oh, mountains, that's great.' It's probably more deeply buried, less place for it to escape. But the existence of mountains implies tectonic activity. And that's how you get leaks. Super interesting. Do they have it in Kazakhstan? I know they have a lot of uranium there. Is there helium in Kazakhstan?

Nick Schneider: I think there's a little bit of helium content in one of the stranded gas fields there. I certainly there's no production there. Okay. And again, the LNG operation in Qatar is somewhat unique with a very small helium content. If you were to drill for helium in North America, and you're not going to have one of the world's largest LNG complexes, they're generally 0.3%. It's considered an economic cut off for the helium content.

Tracy Alloway: Is it true we used to have a strategic helium or a national helium reserve? I can't believe we don't have a strategic pork reserve. But there was a federal helium reserve once upon a time. When our government was very foresighted, we did build a helium reserve during the Cold War, which was a brilliant idea. Both because helium is an important thing to have, but also because that gas would have been vented otherwise.

Nick Schneider: A good example of this is, in Algeria, they have one field with helium content that mixes in with everything else. If they're making LNG from the gas stream in Algeria, then they can recover the helium. But if they're putting it into the pipeline to Europe, which unfortunately is where the majority of it's going right now, because gas prices are very high in Europe, it can't be recovered. And that helium, when you turn on your stove, is just going to escape into the atmosphere.

Joe Weisenthal: Oh, that's really interesting. So even if you don't have a market or an easy way to sell it at the time, the what, the what the strategic reserve did was allow us to capture something that would have been otherwise lost permanently had we not had this thing. So tell us the story, because evidently we don't have it anymore. What was in it? Where was it, and where did it go? Who'd we sell it to? What happened?

Nick Schneider: So it was primarily helium. That was the huge field, which is this very large field. It's across Texas and Oklahoma and parts of Kansas, close to Amarillo. So the field is very large. The gas production from that, we started recovering helium. We were always the, if you will, the 'Saudi Arabia of helium.' Side note there is that the Hindenburg was designed for helium, and the US Senate blocked export of helium for military reasons to Germany, and that's why they filled it up with hydrogen instead. So this has been going on for a while. And we talk about it being a small molecule and difficult to trap underground. A good example of that is when it was first found in Kansas. Originally, helium was discovered by looking at the sun during an eclipse, and someone was able to see from the spectral lines that there's another element out here, and then they found an inert gas well in Kansas. And they were able to distill the helium basically by putting the gas through a bunch of really narrow glass tubes. And the helium will go through the glass because it's such a small molecule. And that's how they were able to distill it. So anyway, we built the world's only helium reserve during the Cold War, and this is something that the science community was very excited about because they recognized that this is really important for a bunch of science and physics. But more importantly, if you think about the long term, we're living in interesting times in many ways. But an interesting time, if you think very long term in terms of the last hundred years, have seen drilling for natural gas all over the place, and particularly for conventional deposits, it's important to understand you can't find helium economic quantities in unconventional resources like shale. So prior to our company, the last new discovery of helium that was commercialized in North America was 50 years ago. Well, and gas companies aren't looking for these conventional fields anymore, but the American Physical Society got very upset when we talked about selling off the helium reserve. And they said, basically, this is a molecule that's only getting more important. We're finding more and more uses for it. And if you think about today, what are some future uses? They're using this for quantum computing to keep things very cold. They're using it for nuclear fusion for the superconducting magnets. They're now using it. And I think Xcel Energy just filed for an IPO. Those are helium-cooled silicon reactors that they're building. Because if you think about Fukushima, that was a water-cooled reactor, and the water got hot, and then the water turned into steam, and it got so hot that the steam separated into hydrogen and oxygen. And then things blew up. But because helium is such a good heat transfer medium, you can use helium as the primary loop there in these reactors. And it makes it passably safe. So the physics community was very up in arms when we decided to sell this off because they said, you know what happens 50 years from now when we need this for space exploration and quantum computing and everything else? And there's no one drilling for conventional gas anymore. So, that's the issue there. And we can get into why we sold it off.

Joe Weisenthal: Well, who bought it, where did it go? Because I can't imagine, like, we bought the strategic helium reserve. Let's just go make a bunch of balloons. I assume that didn't happen. So who bought it, and what did they do with it?

Nick Schneider: So we actually stockpiled two things during the Cold War: Helium and Tin. Tin is also used for semiconductors. We sold them both off, prior to right now, when we started building semiconductor fabs in the US. That's not necessarily a great choice with regard to the helium reserve. When they originally started, they took the helium out of the gas stream. And to your point, Tracy, they put it into an old natural gas field in Amarillo. So that's why the helium reserve was there. And they filled that up. But the government never appropriated funds to pay for the helium. So the Bureau of Land Management or their predecessor basically owed the government $300 million for this because no funds were appropriated, and that $300 million was accruing interest to the point where, I think in 1996, Newt Gingrich got into power, and it was time to start talking about privatizing things. And Christopher Cox went to the House floor and basically said, 'The government is dumb, government has $1.4 billion of party balloon debt.' And a bill was quickly passed and signed by Clinton. And we decided to sell the whole thing off. The original plan, I believe, was to sell it off in equal parts over 30 years for exactly $1.4 billion, with no regard to the market, just to pay off the government's so-called party debt. And the physics community was up in arms about this. But they don't have that many senators.

Tracy Alloway: I think that's amazing. And I feel like we could do a whole episode just on the helium reserve. But a serious question, or maybe a related question, how difficult is helium to store? Because we're used to, you know, maybe you go into the party balloon shop in the party balloon district of downtown New York, and you see canisters of helium gas lying there. But on the other hand, I imagine you're talking about the world's smallest molecule. As you said, it must escape quite easily. So if you decide to get into the party balloon business and you're going to take over where Party City left off, by the way, the only time people usually, friends on the street, bring up helium with me is every time there's a helium shortage. And we're now looking at probably the fifth in the last 20 years. Party City goes bankrupt. That's a big event in the industry. But if you wanted to get into that industry and you wanted to get canisters of helium, and I hope, being an honest person, you would get canisters of pure helium, because I've heard a lot about people, you know, going 50-50 in your balloons don't stay in the air as long as you remember them when you were a kid. The helium will be leaking around the threads of the valve a little bit each day.

Nick Schneider: Yeah. The world trade of helium is actually done in the form of a liquid, where a liquid helium ISO container can be put on a ship, it can hold roughly five times more than what used to be called a tube trailer. You know, sort of a two-foot in diameter, 40-foot long tube. And you'll see these on the highway where there are about ten of them stacked on the back of a tractor-trailer. That's a steel tube trailer. Now, because of the hydrogen industry, there are carbon fiber overwrap trailers that can hold about a third as much as a liquid helium container. So it changes the transportation differential a little bit. And that's what we use. But it's shipped around the world as a liquid, and as a liquid, it is perishable. So that's part of the reason that whenever you know, this sort of a timeline here is I have nothing interesting to say about geopolitics, but the guitarist said they were going to wait until hostilities ceased, and then they will restart LNG production. And I read that it'll take three or four weeks or something. The helium industry is going to take longer than that to recover from this, because there are only about 3,000 of these liquid helium containers in the world. They're highly, highly specialized because you're talking about taking a huge amount by weight of liquid helium, which is at 4 Kelvin, and putting it in a container where it's essentially a very fancy thermos. But this has to be hearty enough that you can put it on a truck and put it on a ship. But it's warming up the whole time, and the very best containers can hold the helium for about 45 days before the pressure gets too high. And they'll essentially vent themselves. So it makes it very perishable, and it makes the containers very important.

Nick Schneider: I would assume that the Qatar LNG facilities had filled a lot of liquid helium containers that are now stuck somewhere. Yeah. And those are slowly warming up. And on the other hand, to deal with a crisis like this, the big industrial gas companies are now going to have to scramble to move containers to other sources to try and get helium out of storage, where they've built some private storage since the Federal Reserve is now essentially gone. And that's going to cause a lot of problems because it's just a very limited supply of these.

Tracy Alloway: I just wanted to say, and I really mean this with no offense, but anytime that we have a guest who is talking a lot about science and technology, I do a little bit of live fact-checking. I look up all these things and it's like, yep, we really did have something called the Helium Privatization Act in 2016. Just about $1.4 billion of party balloon debt. It really is perceived to be important in quantum computing. It really is perceived to be important in small modular reactors. So I just, you know, for the listeners out there, because I don't know anything about any of this stuff. This all seems to check out; helium seems to be pretty important.

Joe Weisenthal: Here's something I've learned over the years: anytime we are talking about niche commodities, it's often harder to find anything resembling spot prices at all, including a lot of the rare earths. Sometimes you'll see these tickers, but they're ancient or not up to date or whatever, that maybe there was a futures market at one point, but it got discontinued in 2018 or something. There's literally nothing on the terminal about helium pricing. Tell us about why that is and what is how transparent is the helium market, and what is it? What is the cost of a ton of helium or whatever? What is the denomination of helium, in terms of how much is sold in a chunk? Tell us about that market.

Nick Schneider: Yeah. So it's a pretty unique market. There used to be more markets like this, but companies like Bloomberg and many others have helped to make things a lot more efficient. In general, the price at the price to the end user, it's considered to be about a 6 billion cubic foot per year market and worth about $6 billion a year. So that implies about $1,000 per MCF to the end user. And that's an MCF is 1000 cubic feet. That's the standard denomination that they use in natural gas. Okay. You know, so that implies that it's a dollar for one cubic foot. And since you insisted on bringing a helium balloon into the studio, I would fact check you and say, what did you pay for that?

Joe Weisenthal: Well, I actually don't know, but definitely more than a dollar. Yeah, and definitely that's not a cubic foot. I'm going to ask our producer, and then he can tell us in a few minutes, but keep going.

Tracy Alloway: Well, while we wait for a response for our producer, what do you tell us about the current market environment and how 2026 looking for 2025 or 2016, etc.?

Nick Schneider: So the market had been trending down since the last shortage, which ended in around 2022 when the Russians brought production online. And that was a bit of a surprise to the industry because a German firm, Linde, had been involved with building the Russian facility there, a more gas project which processes natural gas, liquids and other things out of a big gas stream. And also recovers the helium from their Chanda and Convective fields. And the general consensus because of the Ukraine war is that the Russians wouldn't be able to get that plant to run without the help of the Germans. And they started up the first train and had a very large fire, and they started up the second train and had a very large explosion. So everyone's sort of written that off, but they were able to get that production up and running and start bringing it into the market. There are sanctions on bringing liquid helium containers to sanctions might not be the right word, but I believe that the State Department restriction on taking liquid helium containers from the US to Russia, because it's dual use, it can have a military application. Yeah. There's also sanctions on taking Russian helium at all to places like Europe. So the Russians went into production and basically flooded the Chinese market, and it sort of spread out from there a little bit. It's somewhat limited. The impact they were able to have because of the lack of liquid helium containers, the lack of and markets for them. But prices have been trending down. I will say, in answer to your question, why isn't it obvious what the helium price is? There's a confidentiality clause in every helium contract. So we sell on long-term contracts primarily to big industrial gas companies. But those are all confidential. And I don't know, certainly from the commodity trader point of view, having an opaque market probably is a pretty good thing.

Joe Weisenthal: Yeah. Maybe that originated with the fact that the government was selling the helium for exactly $1.4 billion. And no one wanted to have a futures market there, but also, as you guys know, futures markets need to be deliverable, and there's no longer any sort of global hub. You could have potentially, when the Federal Reserve was a public facility where you could inject gas back into it, you could have built a futures market around that, but no one did. It reminds me of plane delivery contracts where the announcement comes out, and it's always at a list price. So, an airline buys $100 million worth of Boeing planes. But the contracts are so custom and opaque and individualized that no one really ever knows the price they were planned.

Joe Weisenthal: And that's super interesting. Our producer, by the way, got back to us and he says, the balloon cost $9, which is more than I would have expected. But what do I know about balloons? But helium crisis. Yeah, well, well, now, wait a second. Actually, I want to talk about that.

Joe Weisenthal: So first of all, from your vantage point in the market, what supply disruptions are you seeing right now? And then secondly, how long does it actually take those disruptions to work their way into the market and start to hit prices? Given that we just talked about how most of the stuff is selling on a very long-term forward basis?

Nick Schneider: Yeah. The second part of your question is particularly germane. But Qatar facilities in total were producing north of 30% of world helium supply. And given that there's no federal helium reserve anymore, and given that this is a perishable commodity, essentially, because it starts warming up once you fill a liquid helium container, that's a huge problem. The longer this goes on, it becomes more and more of a problem. But to your point on timing, there's a leading helium consultant who we've worked with for a long time who I think put it very well. Where he described the situation last week as it's like a tsunami where the water has already gone out, but we're all still on the beach, and the wave hasn't hit yet. And the last cargoes that left Qatar are probably just now getting delivered to customers. So, the real problems are coming in the next month.

Joe Weisenthal: This is how everyone, by the way, can energies are thinking about this moment right now because by and large, you know, energy markets are up for oil, gas, etc., but maybe not hyper-catastrophic levels. And everyone's like this better opened up soon because the water has come out, and we're going to have real problems. The longer we have, these disruptions.

Joe Weisenthal: It's interesting like this idea that you're, you know, here's something I wondered about. And it again relates to some of the conversations we've had about rare earths in the past. The nominal size of this market, even right now, does not sound very large. A $6 billion global market. This is the same thing. We talked to have a blog here at Bloomberg about rare earths. The total dollar amounts for this stuff are not that high. And I always makes me wonder, does that impair exploration and production appetites that it's like, 'look, yeah, we could go looking for new fields. We could drill here, etc., but there's just a use of, even in the best of times, is not going to be a great market.' And so we have like other things on our mind to do. And I'm curious like whether small nominal markets make it harder to mobilize capital?

Nick Schneider: 100%. And I don't know what the price of uranium is today, but that's a similarly sized market. And you know, what you see in these industries when prices go up or there's a shortage is essentially people start doing exploration at the desk where they're saying, 'Who almost found this in the past?' because it's too expensive to go do it from first principles. If you think about the size of the oil and gas market, it's hundreds of times larger. So, the only people who could afford to explore at scale in North America were the oil and gas drillers. So we found a niche where we were able to do that because it's a lot cheaper than in some other places. But that is really what separates us as a company in terms of we've been focused on grassroots exploration, saying the best stuff hasn't been found yet. And in those other industries, I think that's a problem going forward for a number of critical minerals in these commodities where you can say, 'Well, hypothetically, there's rare earths in North Carolina.' How much do you want to spend looking for them? Because it can cost hundreds of millions of dollars to go drill holes in the ground.

Joe Weisenthal: You said earlier that there had been five previous helium shortages. I guess in recent times, what happened during those? How much substitution did you see of alternative gases? I guess I don't know what those would be, maybe neon. And then how much rerouting did you see from one geographic area to another? I guess what I'm asking is how flexible is the industry that relies on helium?

Nick Schneider: Answering that in reverse, the industrial gas companies that really distribute the helium and move it around the world and break it into smaller quantities to serve the end user, they do a phenomenal job with this, but it's a very, very difficult problem. So when there's a shortage, there's absolutely a problem, particularly because of the specialized logistics. And there aren't a bunch of extra helium containers lying around and things like that.

Joe Weisenthal: In terms of what was your question about the previous helium shortages?

Tracy Alloway: Yeah, basically, how much substitution did you see? Like, are there other gases like neon that you can use instead of helium? And that basically, just how easy is it for people to adapt to an actual helium shortage?

Nick Schneider: So the first shortage was in 2007. And back then we had a lot more options in terms of, you know, in Europe, they've never really had a lot of helium the way we have in the US. So for that reason, they don't really have party balloons over there, which is the most visible thing for the average person that, but they also have always used a lot more argon in welding. Helium is used in inert gas welding because it is inert, because it has heat transfer. They've always used more argon. We've always used more helium in the US. And there was a lot of substitution and saying, 'Okay, we still need helium if you're welding stainless steel, titanium, aluminum if you're doing thicker welds.' But in some of the lower spec welding applications, we were able to substitute argon. And you've also seen recycling where, you know, if you're doing semiconductor lithography, you can't really recycle because you're putting other things in the gas. But if you're purely doing it for a cooling loop, you can start to recycle. And my understanding is that the MRI manufacturers, prior to 2007, they would build an MRI, fill it up with liquid helium, make sure it works at the factory, and then just vent it into the atmosphere and shipped the unit and it would be refilled when it got there. So, there's certainly been demand destruction from that. The other side of that coin is that there's very little opportunity for additional recycling or additional substitution at this point. And, you know, I sort of tell people, if you're still using helium after for global shortages, you have to use helium.

Joe Weisenthal: There are balloon Dora helium balloons in Europe. In fact, check that they do exist there. Perhaps maybe. They're not as. Widespread. I actually found a, this is a very European. This is the most European-looking document I've ever seen, which is this really serious, like think tank report on the intentional release of balloons and confetti in the Baltic Sea area. Scoping study a collection of existing best practice information, regulation and best practices published by the Baltic Marine Environment Protection Commission is a 50-page paper on the release of balloons. Anyway, sorry, but I take your point that I'm and I. But I also found a Reddit post someone asking where they could get helium balloons so maybe they're not.

Tracy Alloway: Well, if the EU has regulations on it, I'm willing to believe they've got it.

Joe Weisenthal: You know, the big takeaway I have from this conversation, I mean, conversation is just going back to thinking about that 30-year release schedule from the helium reserve, and especially if you're not doing it at something resembling a market price that must have just obliterated any private sector activity. Because if there's going to be this fixed supply coming out to the market and it's not even price sensitive in any way, why would you ever build out private production at that point?

Nick Schneider: 100% that that's been a big issue. And, you know, when I first started looking at this issue in 2011 because my dad was involved in trying to advocate for fusion hybrid reactors, and he chaired a Brookings-MIT conference on this. And he was very disappointed. He said the smartest guy there told him he was wasting his time because we were going to run out of helium before they could get the technology working. And, you know, I flew. He called me and I said, 'I thought that was for party balloons.' Now I'm cursed to be on the other side of that conversation for the rest of my life. But the American Physical Society at the time, you know, put out a statement saying not only should you not sell this, helium is the one thing we should be building a bigger stockpile of for the future. And, you know, I sort of compared the situation to what happened in Europe with uranium, in the Megatons to Megawatts program after the fall of the Soviet Union, we took a bunch of their former Soviet nuclear weapons. We turned them into power plant fuel, just because of proliferation reasons, and sold that into the market and similar thing. You know, you dump a bunch of supply into the market for a long time, and then there's no incentive for exploration. And uranium prices went up 500% in the early 2000s. So, that certainly been a factor in terms of why haven't people been doing this the whole time?

Joe Weisenthal: Well, okay. On that note, you're the founder and CEO of North American Helium, and we know that helium prices are going up even though we don't have a very good benchmark. But, you know, broadly, we know that it's going to get more expensive. What do you do with that price signal? Do you invest more or do you expand given the limitations around, you know, exploring for LNG and things like that? What do you do?

Nick Schneider: We're on the unique end of the spectrum in the industry, because we're not running a $10 billion LNG project or something like that, because we're producing, we're only drilling for helium for non-hydrocarbon sources. So we're essentially looking for, we're drilling into older rocks that predate plant life on Earth. So there's not a lot of organic material there. So you're drilling for fields of helium and nitrogen, and these exist. And, we are primarily operating in southwest Saskatchewan in Canada, and they found a field like this. In the 1960s, they wrote helium legislation, which made them very unique. But because of the combination of the forced sales from the federal stockpile, keeping helium prices low, and nitrogen being worthless because it's already 80% of the atmosphere, no one ever came back and looked at this. But we're certainly, I would say we were already going pretty fast. Certainly in an environment like this, our mission is to support science and industry. So all of a sudden, this is a big problem. We're going to do everything we can to increase our rate of exploration, bringing new plants onto production, and really trying to support some of the most vital uses of helium that we've had in previous shortages. One of the problems is it's not a question of for the end user, it's not a question of whether or not you get the helium or not. The consequences of not getting helium across the value chain are pretty significant. If your Party City goes bankrupt. If you're a chip manufacturer, you have to shut down manufacturing, and that's the dollar amount. There is just tremendous. If you were running MRI or their cousin NMR, which is used for drug discovery and things like that, if that magnet heats up, it will destroy the magnet. So you're talking about your machine getting destroyed essentially. So we're very focused on supporting those vital end users. And if people can't do as much welding for a little while, you know, it is what it is. But in general, the price is very volatile because helium is a very small percentage of the cost of goods sold for all of the end users.

Joe Weisenthal: Sorry, just to press on this point, I'm going to assume that you're going to make more money in the coming months as a result of helium supply getting squeezed in Qatar. What are the major choke points at your company that you would be trying to use that money to resolve? Is it actually finding new fields or is it investing in more storage capacity? Transportation investment? What are you going to do with the money?

Nick Schneider: It's a little bit of all of the above. Our focus has always been on the lack of reliability in the supply chain, which comes from two things. One is the extreme concentration, where you've got one excellent CO2 project in Wyoming. It's a quarter of world supply. You've got one LNG facility that's a third of world supply. You've now got production in Russia, which has its own issues. So the geopolitics and the concentration are a problem. So we've been working for the last 13 years to build a new helium hub to create helium supply from non-hydrocarbon sources in Western Canada. And for that reason, we run a bunch of stuff in parallel. So we'll be bringing a new facility online that will increase our production by 40% later this year. We're also drilling for, doing exploration for the next field. We're also looking at doing much more grassroots exploration for just continuing to understand the area, because we have 9 million acres of long-term helium rights, so it takes three hours to drive across it. We've identified a thousand structures from seismic data that we have not drilled yet. So it's really all of those things. One of the biggest things that we've been looking at is building a helium liquefier in Canada, because right now we have nine facilities that are producing helium, and we truck all of that in carbon fiber overwrap tube trailers down to existing liquefiers in the US mid-continent. And there's a lot of extra capacity down there because production has been falling in the US for the last 35 years. But building a liquid helium liquefier in Canada along the Trans-Canada highway, which runs through the middle of our properties, really lowers the cost. It also lowers the emissions, which is something people care a lot more about four years ago. But we still think it's important. And it opens up this area as more of a global hub. And also if you think about the high-end customers, they're very concerned with purity. The average customer is taking liquid helium A grade B, which is sort of the industry standard you can think of. It is more or less five nines purity, 99.999% pure. The leading-edge chip manufacturers are now looking for six nines purity, and right now that primarily that comes from Exxon's facility or it comes from Qatar. So all of a sudden you've got a big issue there. And if you want to think about, you know, I know you guys love all of the weird logistical stuff, there are only so many liquid helium containers in the world. Yeah. And if you want six nines purity, you don't ever want to fill that with five nines, because you might get a molecule of hydrogen in there. So those containers are sort of kept separate. And the fiber optic manufacturers have their own containers. So now you've got an issue where the special containers for the semiconductor firms are trapped somewhere. They've got to go somewhere else. You've got to say, 'Well, we need more of this from the Exxon facility, and maybe that's going to cause a problem somewhere else.' But building our own liquefier gives us the opportunity to meet any purity and be able to kind of go farm to table with the whole supply chain.

Joe Weisenthal: Farm to table.

Nick Schneider: Farm to table helium.

Joe Weisenthal: Nicholas Schneider, thank you so much for coming on Odd Lots. I learned a lot about helium in that conversation. That was fantastic.

Nick Schneider: Joe Tracy, thanks so much. Really a pleasure.

Joe Weisenthal: Tracy, I really want to do a live episode one day in Saskatchewan with Nicholas and Murad Khatib, the Lento king of Saskatchewan. We got to have the helium king of Saskatchewan and the little king of Saskatchewan. I think that'll be a great live event for us. I want to go scout in Saskatoon for helium.

Tracy Alloway: Yeah, yeah. Me too. And lentils, I guess.

Joe Weisenthal: That was a fascinating episode. I mean, all of these niche commodities are fascinating. I will say one thing that keeps getting repeated on all of these shows, and you touched on it already, is this idea that we haven't actually seen the physical impact just yet, and it's coming down the line. And you can imagine there are a lot of consumers of specific products out there who for now are able to say, 'You know, we're doing all right,' but in maybe a month, maybe three months, maybe four months, if things keep going as they are. And even, frankly, if the war were to stop tomorrow, you would probably have some sort of impact.

Tracy Alloway: Yeah. You know, that reminds me of, you know, May 2025, it's like the shortages are coming to the shelves because of the tariffs. Yeah. And they didn't. And then it's like, 'Well, but that was partially because Trump started reversing every.' I know he did. He did. But I do think we had like this weird moment where it's like nothing ever happens. But maybe it will. But yeah, but everyone who we talked to in commodity, it's essentially it's like we're in the phase where the water has come out, and the longer it takes for production to restart and trade to reopen, the greater the damage is going to be.

Joe Weisenthal: What I think is really interesting about this conversation in particular. And there are actually from a sort of economic standpoint, it's like several very interesting threads in there. So first of all, there's the part about how if you're selling helium at the same clip every year for 30 years, you destroy any sort of semblance of a market for private production. That's interesting. Another interesting thing is that, okay, like helium itself is sort of scarce and not all over the place. And then the scarcity of the containers, he kept coming back to the containers. There aren't that many containers in the world because helium can go through glass. That means it's so small. Not allowed, can trap. And even the containers that exist, can only hold it for so long. And then the fact that the helium that's needed for the most advanced science, as you mentioned at the end, they want the six nines purity, not the five nines purity. And so they have their own separate set of containers that it's almost impossible to imagine, like at this point, like a sort of, like, truly coordinated, like commodity helium, just because kind of like natural gas. So much of the story seems to be in the shipping and holding of it rather than the commodity.

Tracy Alloway: No, it strikes me as very similar. And helium is even more natural gas than natural gas, right? In the sense that we don't even have any pricing to look pricing basically, which is just shocking to me. As someone who's been staring at a Bloomberg terminal for many, many years, it feels really weird when you can't get a price of something. So there is so like typically speaking, if you enter in any ticker in the terminal, something will come up and there is actually a something. There's a helium bond. No, there's a helium index. But whatever it was, it was put together by the Bureau of Land Management. And they ended it in 2018. Like they stopped whatever. Like whatever this index is in 2018. So there is not a lot of, there is not a lot of data on helium. And I found that to be the case with a lot of the nausea.

Joe Weisenthal: Yeah. Discontinued. It's for historical purposes only, according to the DNS page.

Tracy Alloway: Well, the other weird thing about it is it doesn't actually look that volatile at all. Right.

Joe Weisenthal: Seems like I. So I don't even believe that. Yeah, exactly. Okay. Well, if anyone wants to create some sort of pricing index for helium, let us know. Yeah, we'd love to check it out. Shall we leave it there? Let's leave it there.

Joe Weisenthal: This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me @tracyalloway. And I’m Joe Weisenthal. You can follow me @thestalwart. Follow our producers Carmen Rodriguez @carmenarmen, Dashiel Bennett @dashbot, and Cale Brooks @calebrooks. And if you want more Odd Lots content, you can go to Bloomberg.com/oddlots and you can find our daily newsletter. And you can chat about all of these topics, including helium, 24-7 in our Discord discord.gg/oddlots. And if you enjoyed this conversation, then please leave a comment or like the video. Or better yet, subscribe! Thanks for watching.