If you’ve been following my previous emails, you’d know that I’ve been very active in my research about helium. What has been primarily driving my interest in this topic is the ongoing global helium crisis.
That’s because this commodity is aligned with the kind of investments we pursue here at MRAP.
Helium could be categorized as a “real world asset” much like Real Estate, Oil & Gas, and Clean Energy like Carbon Capture and Sequestration.
Like any viable asset, the helium industry is affected by drivers that lead to its continual increase in demand and continued future growth.
The U.S. is considered to control helium, as it’s the world’s largest helium producer and provides 40 percent of the world’s supply.
The U.S. government has historically employed economic and national security policies to maintain its position and ensure a reliable supply.
It began with the Helium Act of 1925 which established the Federal Reserve and asserted strong government control over the development of helium.
Then in 1996, Congress tried to privatize helium and ordered the US government to sell much of the National Helium Reserve. But the transition from a public to a private market was not successful.
It had to be done in a way that would not disrupt prices in the helium market. But Congress says private industry didn’t step up to supply more helium, in part because the federal government was selling its helium so cheaply.
So in 2013, Congress stepped in again, this time to rescue the federal helium reserve with the Helium Stewardship Act.
This law established an auction system for helium sales and mandated that all property, equipment, and interest in the FHR be disposed of by September 30, 2021.
The “Helium Shortage 4.0” began on July 1, 2021 when a four-month maintenance outage of the US
Bureau of Land Management’s (BLM) Crude Helium Enrichment Unit (CHEU) removed more than 10% of worldwide capacity from the market.
Reduced supply means that prices have shot up, in some retail stores up to 4x. But this shortage goes beyond party balloons — it may just be the world’s next medical crisis.
Helium is a necessary element needed for the successful operation of all MRIs. Most MRIs require thousands of liters of liquid helium to keep their magnets cool for optimal function.
As helium dwindles in production, patients are at risk of foregoing MRI studies that are necessary to establish important diagnoses and guide the treatment of serious diseases and illnesses.
At Match Real Asset Partners, we are working on a syndicated fund that would help alleviate this situation by purchasing a field with high concentrations of helium.
I believe that privatization of the helium industry is possible with the right players and we will invest in the equipment to get it to market.
We will also own mineral rights for the field, which gives us a working interest in the production of natural gas, so all of our equipment depreciation will be able to offset ordinary income.
If you would like to be part of a solution that aims to resolve this historic commodity crisis, join our Advance Notice List to be among the first to learn about new offerings.
Schedule a call with me to get started!