
Nobel prizewinner: We are running out of helium - chanux
http://www.newscientist.com/article/mg20727735.700-nobel-prizewinner-we-are-running-out-of-helium.html
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c1sc0
We're running out of all kinds of natural resources. The main problem I see is
that natural resources are way underpriced in current markets since markets
only assign value based in the short term. We need a pricing mechanism that
spans generations and encourages conservation for the centuries to come. A
free market for helium is a start, but is still heavily biased towards short-
term profits. Or am I wrong here?

~~~
AngryParsley
If you suspect certain resources will be more expensive in the future, you can
buy futures and make a killing. You can also look at the going rates for
futures contracts and compare them to the current price of the commodity to
get an idea of future scarcity.

~~~
_delirium
There isn't really a functioning long-term futures market for most
commodities, though: the _vast_ majority of the contracts are <1 year, and
most of the rest are <2 years. There are a handful of commodities where it's
possible to trade 10-year contracts with relatively good liquidity (U.S.
natural-gas delivery is one), but they are quite uncommon, and 20-year
contracts aren't even traded on the major exchanges. So, I really tend to see
the futures markets, at least the way they currently operate, as more a way of
betting on or hedging against (depending on your other positions) short-term
logistics and demand spike issues, rather than as a long-term pricing
mechanism.

~~~
AngryParsley
I think the lack of long-term futures contracts is evidence that nobody has a
clue about the price of commodities in the long-term.

~~~
yequalsx
But then futures contracts don't give "an idea of future scarcity". How does
your current statement mesh with your previous one?

It seems like the conclusion is that no one thinks they know enough about
future scarcity to be willing to place bets on it.

~~~
AngryParsley
While the predictions of scarcity are likely correct, the predictions of the
consequences of scarcity likely aren't. For example: Once the cost of helium
increases, substitutes will be found for many applications. For a buoyant gas,
people might use hot air, or hydrogen mixed with some kind of flame retardant.
Low temperature research might rely more on computer simulations. MRIs and
other devices might use high temperature superconductors bathed in liquid
nitrogen.

The only problem would be if helium scarcity happened too quickly for people
and technologies to adapt. If you thought that was likely, you could invest in
companies making or researching helium substitutes and make a killing.

 _It seems like the conclusion is that no one thinks they know enough about
future scarcity to be willing to place bets on it._

Almost. Nobody knows enough about future scarcity to be willing to place bets
on it instead of placing bets on other investments such as index funds. If you
enter into a 20 year futures contract, you're saying, "I believe I will make
more money from selling this resource in 20 years than I would from investing
the value of this contract in index funds for 20 years."

~~~
kragen
> While the predictions of scarcity are likely correct, the predictions of the
> consequences of scarcity likely aren't. For example: Once the cost of helium
> increases, substitutes will be found for many applications. For a buoyant
> gas, people might use hot air, or hydrogen mixed with some kind of flame
> retardant. Low temperature research might rely more on computer simulations.
> MRIs and other devices might use high temperature superconductors bathed in
> liquid nitrogen.

Those are cool speculations.

Hydrogen is probably the only option for a buoyant gas. I don't think mixing
flame retardants in with hydrogen will work; you either need something lighter
than nitrogen (and hydrogen, helium, and neon are the only candidates) or
something that can retard flame appreciably in such small quantities that it
doesn't counteract the buoyancy, and I don't think any such substances exist.
They'd either have to produce a lot of non-inflammable gas, the way sodium
bicarbonate does, or absorb a lot of heat like tetraethyl lead, and in either
case they have to be pretty heavy.

For superconductor and other cryogenic coolants, as they said, liquid helium
is already recycled.

I like the idea of using high-temperature superconductors. Maybe invest in
yttrium mines? (I guess there are lots of high-temperature superconductors
today.) Why don't these devices currently use high-temperature
superconductors? Are they too expensive? (Edit:
[http://pubs.acs.org/subscribe/archive/ci/31/i06/html/06chem....](http://pubs.acs.org/subscribe/archive/ci/31/i06/html/06chem.html)
says that 123, YBCO, and its family are only superconducting within a single
crystal, which makes it hard to make large coils out of them.)

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rdtsc
I have a stupid question: If helium is so infeasable to extract from air or
get from other chemical means. How did US end up with such had such a large
supply of helium in the first place?

EDIT: The answer to the question is:

U.S. Bureau of Mines arranged for five private plants to recover helium from
natural gas. For this helium conservation program, the Bureau built a 425-mile
(684 km) pipeline from Bushton, Kansas to connect those plants with the
government's partially depleted Cliffside gas field. This helium-nitrogen
mixture was injected and stored in the Cliffside gas field until needed, when
it then was further purified.

~~~
Rod
<http://en.wikipedia.org/wiki/National_Helium_Reserve>

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gwern
> Maybe in Europe there has been a conversation, but not in the US - and the
> US supplies nearly 80 per cent of the helium used in the world. The problem
> is that these supplies will run out in a mere 25 years, and the US
> government has a policy of selling helium at a ridiculously low price.

This sounds like a prediction! 'US helium production will crash to near-zero
in 25 years.' <http://predictionbook.com/predictions/1686>

~~~
wanderr
So, because a prediction about something once was wrong, all subsequent
predictions about that thing must also be wrong?

~~~
gwern
No. I don't see how you could possibly extract any such interpretation out of
my comment. A prominent pundit^Wrespected scientist has made a prediction; I
am merely recording it for later judgment.

~~~
jbooth
Yeah, except as noted above, it's a pretty solid prediction. We're mandated to
sell all of this stuff by 2015.

Absent a change in the law, it seems like a good guess that we'll sell it by
2015.

This is not climate science, you don't have to have a chip on your shoulder --
you can objectively evaluate this evidence if you choose to do so.

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varjag
My physics is rusty, but isn't helium a common byproduct in nuclear fission?

EDIT: OK looked it up, it indeed is but totally uneconomical in practice.

~~~
cpearce
Better get cold fusion working, or find a way to mine asteroids profitably...

~~~
WorkerBee
Fusion _works_ (in that it successfully fuses atoms) and has since the 1960s
<http://en.wikipedia.org/wiki/Fusor>

You don't get more energy out than you put in, but if your goal is to make
helium, that's hardly the point - just about every other industrial process
also consumes energy.

~~~
Retric
The problem is you need to be really close to breakeven or your going to be
wasting GWh per lb of helium.

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csomar
Rising the price or not selling is not a solution. Not only we are running out
of helium, but also any other substance in the earth is concerned. The
solution is a big factory that analyses the air, water, or any other mix of
substances to extract the substance we like and classify them. It can also
create a mix, like H2O....

Sounds like a terrible idea, but it's the revolution we need for the next 100
years, if we really want to continue development in the planet Earth. If you
are not already aware, fauna and flora are already doing it for thousands of
years. And yes, they did it successfully. The sun could be a valuable
energetic resource.

~~~
gwern
> The solution is a big factory that analyses the air, water, or any other mix
> of substances to extract the substance we like and classify them.

So all we have to do is either invent perfect nanotechnology or Maxwell's
demon? Brilliant!

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scotty79
100$ per party baloon? That's pretty expensive. Maybe it would be good
strategy to buy pressurized canisters with helium, stash them under your home
and your kids or grandkids could sell it and become pretty wealthy.

~~~
ams6110
There are other lighter-than-air gasses that could be used, e.g. hydrogen.
Problem is that I think all of the practical ones are either flammable or
toxic, maybe both---a bad idea at a kid's birthday party.

~~~
Tichy
flammable sounds like extra fun

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sabj
This is a big deal! It's not something that is reflected well on the market,
IMO. Important resource that isn't priced effectively, doesn't consider the
future... definitely not the only thing that fits that bill, but this one is a
little more cut and dry.

However, it's a bit hard to bet on the price of helium. Most of the main
producers are reasonably diversified among other gas-products etc.

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csmeder
So should we start hoarding helium so that we can sell it at a premium in like
50 years?

~~~
grinich
The moon has a lot of it...

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sliverstorm
I won't be sad to see party balloons go. Even if it's only a small amount of
our total helium, it always felt like a huge waste of helium, even when I was
a little kid.

~~~
mikeklaas
How did you know that helium was a so much more valuable than the balloons
themselves as a kid?

~~~
sliverstorm
I knew that helium was lighter than air, and suspected it escaped our
atmosphere, so I figured we wouldn't be able to get it back. The balloon on
the other hand, while not recyclable, didn't leave the planet.

~~~
jacquesm
That's quite an amazing train of thought for a young kid, especially the
'escaped our atmosphere' bit.

~~~
kragen
I thought every science-minded kid had this same thought.

~~~
jacquesm
The escaped our atmosphere bit is actually pretty advanced physics. Most kids
would assume that the helium would form a spherical shell if they knew about
gravity.

<http://en.wikipedia.org/wiki/Atmospheric_escape>

~~~
kragen
Well, people can happen on the right prediction for the wrong reasons. I'm
sure I didn't know about thermal atmospheric escape when I thought this, or
probably even that a gas at a temperature consisted of molecules with a random
distribution of kinetic energies centered on that temperature. I think I just
thought that there would always be stuff denser than helium that would push it
further and further away from the earth, without limit. (This is almost true,
but most of the solar system is filled with hydrogen, which is less dense than
helium.)

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tofutim
Time to hoard helium.

~~~
Tichy
Or research alternative party balloon technologies.

~~~
pjscott
Hydrogen! Even more buoyant than helium, and if you get it near a flame, the
balloon turns into a fireball. Just one of those would make a party more fun.
(Do _not_ let oxygen into the mix, though, or you'll get a lot more than just
a fireball if the thing ignites.)

~~~
kragen
A hydrogen-oxygen mixture in a flexible container like a balloon is unlikely
to amplify a deflagration into a detonation. However, either way, the fireball
radiates mostly in the ultraviolet. You might want to mix some methane or
acetylene or something in there to help it radiate in the less-dangerous
visible spectrum.

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Natsu
I can't help but feel like there should be an investment opportunity here...

~~~
phreeza
I wonder if this Richardson made an investment before issuing this statement
;)

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Rod
As expected from a _New Scientist_ article, this is not very informative. If
you wanna learn more, you might wanna take a look at these:

[http://pubs.acs.org/subscribe/archive/ci/31/i06/html/06chem....](http://pubs.acs.org/subscribe/archive/ci/31/i06/html/06chem.html)

<http://www.wired.com/wired/archive/8.08/helium.html>

<http://books.google.com/books?id=A-lS1ZD8yOkC>

~~~
mattmanser
It's an article, not a thesis, what do you expect?

~~~
Rod
I expect content. Do note that the _acs.org_ link is an article too, not a
thesis, so you have no point.

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stretchwithme
I agree 100%. Keep enough to cover the military's needs for 50 year and sell
off the rest.

~~~
phaedrus
I'm not sure what you're agreeing with considering the article is arguing the
US govt should NOT be selling off helium.

~~~
TheEzEzz
I think stretchwithme meant sell it off wholesale to private distributors,
rather than selling off directly to consumers.

~~~
gwern
Like it matters? Helium is helium, it's fungible, the private distributors
have every incentive (like the consumers) to use or waste helium. An annual
discount rate of 5% or more means that value 20 or 50 years from now is very
small indeed.

~~~
stretchwithme
No, that's not the case. If you own something, selling it immediately for
whatever cash you can get is what you want to do. You want to sell it for as
much as you can and that means not dumping it in to the market all at once.

This is especially true when getting more is very difficult. The price is
likely to go up in the future, making even more sense to hold on to it.

And not sure what fungibility has to do with it. Doesn't that just mean its
easy to quantify and trade? A pound of helium is a pound of helium no matter
where you buy? Why would that give you an incentive to dump what you own for
whatever you can get now?

Many people like buying assets that hold their value and like holding them
instead of pieces of paper the government can and will soon have to inflate
away.

~~~
gwern
The fungibility point is that it doesn't matter who the helium gets sold to,
the price will be affected. It's like oil - it's all pretty much the same, so
it doesn't matter whether you boycott Venezuela and specify that the oil you
buy must come from Brazil rather than Venezuela, since that just means someone
in Brazil will buy Venezuelan oil for you or a potential Brazilian customer
would switch to Venezuelan. The oil flows where demand is.

> This is especially true when getting more is very difficult. The price is
> likely to go up in the future, making even more sense to hold on to it.

The price has to go up beyond the opportunity cost and one's discount rate.
One doesn't invest in a merely profitable activity - one invests in the _most_
profitable activity, and if that isn't bigger than one's discount rate one
just consumes rather than invests.

If helium goes up 2% a year but Treasuries return 3%, then the savvier
merchants will sell helium and buy Treasuries, and laugh at you all the way to
the bank.

~~~
stretchwithme
That makes sense. If the US government is selling it cheap, those who purchase
from the US and other holders have the incentive to hold on to their helium
til later when the price returns to normal. You're right.

Oil is a good example. That's why embargoes don't work. The target country
just has to buy it through a third party to defeat the embargo. Embargoes can
really only work when the country embargoed is shooting itself in the foot
with price controls, as we did in the 70s.

