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Updated May 2022

 

What is Helium

Helium is a colourless, odourless inert gas. Helium is a product of nuclear fusion within a star or by the decay of uranium and thorium deep inside the earth.

Helium can be extracted from the atmosphere, but this process is costly. Alternatively, high concentrations of helium can be extracted from natural gas reservoirs at a more cost-effective rate.

Helium has many uses, including in magnetic resonance imaging, nuclear magnetic resonance, welding, rocket propulsion systems, and laboratory research. Other gasses such as hydrogen can substitute for helium in some applications. However, there are many applications where helium cannot be substituted, indicating a strong and stable demand for this element over time.

Royalty Program

In May 2020, the Ministry of Energy (formerly Alberta Energy) announced the introduction of a 4.25 per cent royalty rate for helium.

Because Alberta produces more than half of Canada's natural gas, the province has a big opportunity to become a key supplier for helium. Alberta has several competitive advantages. The province's helium reserves are found in the same regions that have historically been known for oil and gas drilling. Alberta has proximity to the U.S., the world's largest consumer of helium.

Production in 2021 and Forecast

In 2021, total helium production was 1.5 thousand cubic meters per day (103 m3/d) (see Figure S9.3) from two wells. The annual number of wells placed on production represents the cumulative number of active wells.

Projects

Thor Resources' Knappen project was the only source of helium production in 2021. More projects are currently under development.

Imperial Helium, First Helium, and Avanti Energy are currently developing helium projects in Alberta with wells expected to be placed on production beginning in 2022.

In addition to projects currently in the construction phase, there are several that have been announced and are concluding tests to determine helium concentrations. These are expected to move forward later in the decade.

Limitations or Risks to the Outlook

Potential risks to the helium production forecast include land leasing, where many economic areas for helium could also be used for carbon storage. Increased competition for land leases from other commodities could crowd out helium developments. With all the emerging commodity sources (helium, hydrogen, and geothermal), Alberta will need to adapt and design the necessary regulations to avoid future property rights and management issues.

Another potential limiting factor to Alberta's future helium production is competition for capital with Saskatchewan, where the helium industry is being developed at a faster pace.