Secretary of State Rex Tillerson is in the Middle East this week for his first experience in shuttle diplomacy. He’ll be traveling between Qatar and its neighbors trying to get negotiations going and restore some of their economic relationships. Last month, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic ties with Qatar, which meant trouble for Qatari businesses and, in the short term, the global supply of helium. Marketplace host Kai Ryssdal talked with Sarah Zhang, who’s covering this story for The Atlantic. The following is an edited transcript of their conversation.
Kai Ryssdal: Why don’t you run down the list of things for me that we need helium for, other than, like, birthday party balloons.
Sarah Zhang: Yeah, helium is actually surprisingly important in a lot of things. It’s one of the lightest elements. So that means scientists and doctors use it in, like, MRI scanners. It’s also used in the Large Hadron Collider. It’s also really good for using in making semiconductors that are in your computer chips. And of course, it’s really light, as we all know, so it’s uses in airships and helium balloons.
Ryssdal: Tell me now how this crisis of sorts between Qatar and its Gulf neighbors is factoring into the global helium market?
Zhang: Yes. Qatar is one of the largest suppliers of helium. It’s actually second, right behind the U.S., and supplies about a third of the world’s helium. And what it usually does is that it sends its helium to Saudi Arabia and then to the UAE, where it leaves a big port in these specialized containers and goes to Singapore and the rest of the world. Now Saudi Arabia and UAE have cut off that route. So it did result in kind of a short-term ending in production, but it’s since restarted. They found another way to get it through, but the port is smaller, boats are smaller, and because liquid helium is really, really cold, those containers also have to be really, really cold. And you can’t just cool them right away, because they crack and have to slowly cool over days.
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Ryssdal: So, what has happened then, to helium prices? I mean, have we seen it reflected in prices in the global market?
Zhang: So, this has been a pretty short-term hiccup. But the larger context here is that there’s been a lot of instability and drama in the helium market in the past few years. Qatar actually started producing helium around 2013 after a bunch of shortages. So Qatar isn’t really seen as a place that is super risky politically, but now they’re trying to re-evaluate that and hope that there might be other sources of helium elsewhere in the world.
Ryssdal: And it’s a little bit of an inelastic supply, right? You can only get more helium by getting more natural gas out of the ground, and that creates its own supply chain problems.
Zhang: Yeah, exactly. So, one of the reasons the U.S. and Qatar are the two biggest producers of helium is because they make a lot of natural gas. So, helium is kind of present in like really, really low quantities in natural gas. In Qatar it’s about 0.05 percent of their natural gas. So usually, in a lot of cases, it’s just kind of vented off as waste because it’s not enough to make any money from it. But because Qatar produces so much natural gas, and they do something called liquefying it, they’re able to produce enough helium to make some money on it.
Ryssdal: We should be clear here that there is plenty of helium out there in the world. It’s not like we’re running out of it. It’s a supply-chain thing.
Zhang: Yeah, that’s exactly right. There’s plenty of helium on Earth. It’s one of the most abundant elements in the universe. There’s a lot of helium in the universe. So, there has been a really exciting development in the helium world, which is a discovery announced last year — actually it was a rediscovery — people looking at old British maps found actually huge helium deposits in Tanzania. And the helium is actually high enough that you could extract it just for the helium alone. So, people are hoping that maybe you could do that and that can be acting as a buffer against other shocks in the future.
Ryssdal: And are things calming down now in light of the Qatar situation?
Zhang: Well with the helium, Yes. With the other parts, not so much.