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Not too long ago, no one could have imagined that we would be facing the challenges that we do. At the start of the millennium, we were clueless of today’s problems. Who would have thought that Russia and Ukraine would be on the brink of war, or that China would be a dominant economic power or that Islamic fundamentalists would be a near unstoppable force in the Middle East? And no one would have believed that we would be running out of helium!

It was only a few decades ago, that we thought our helium supplies, being the second most common element in the universe, would last forever. We filled party balloons up with it, inhaled it to make squeaky voices or filled enough balloons to lift a person (https://www.youtube.com/watch?v=bSUBL4OQzrA).

Science and industry also used this “limitless” resource for deep sea diving, filling blimps and hot air balloons, as well as metallurgical processes, such as arc welding. As the American magazine ‘Science Monitor’ noted in June 1980, “It is abundant in the United States and relatively cheap.”

However, even then there were alarm bells sounding at the thought of wasting our resources, with the General Accounting Office of the US government estimating that, “13 billion cubic feet of helium escapes into the atmosphere each year in the normal production of natural gas”.

Clearly, even then someone had noticed that the vast majority of the Helium in the universe was deep in space, inside stars, and from that spark of doubt about the efficiency of our use of helium, grew a sense of panic. What will we fill our party balloons with when the helium has gone!

This problem is made all the worse because today’s science and medical technology has found plenty more uses for the stuff, as it was found to be an excellent super-cooling material and relatively easy to work with.

Today, it has uses in space exploration, is used in modern battlefield weapons, it cools the Large Hadron Collider and satellites in space, it is used to inflate car airbags after impact, it provides an inert atmosphere for making fibre optics and semiconductors and, as they must be kept near to absolute zero to function, it is used in modern hospital MRI scanners (which accounts for one quarter of world helium use), as well as NMR spectrometers. It is also used with neon to create the lasers that scan barcodes in supermarkets and more recently has been used in developing a helium-ion microscope that can give better image resolution than a scanning electron microscope.

Helium has a wide and important role to play in modern life, but worryingly, as the US Federal Helium Program observes, “Helium … is indispensable … (and) for many of these uses there is no substitute for helium, so when shortages occur, operations must cease.”

So where on Earth is all the Helium?

Being incredibly light, the gas is high up in the air. It is thinly dispersed in the upper reaches of our atmosphere, and as such, is very difficult (and that means expensive) to collect.

The rest of the helium is locked deep underground in areas with high levels of uranium and other radioactive materials, where underground natural gas deposits can contain as much as 7 per cent helium by volume.

As Graham Templeton, the renowned technology writer and molecular biologist, explains, “This is because uranium and other similar elements give off so-called alpha particles as a major source of their radioactivity, little two-proton-two-neutron units that are identical to helium nuclei. This means that alpha particles are technically helium isotopes, and by acquiring electrons from their environment these particles can form He2, a stable gas. Cryogenic purification (separation by freezing point) allows the helium to be coaxed out of the underground mixtures of natural gases“.

As you can probably tell from the description of sourcing underground helium, the process is complex, and as such capture cannot keep up with demand. The US is by far the largest producer and maintains a National Helium Reserve of about 1 billion cubic metres, with current world consumption set at 200 million cubic metres per year. This means that drastic measures are not needed; yet.

But one day something must be done, for demand continues to outstrip supply, and this is being reflected in today’s market prices, and it is these dramatic price increases that are causing all the fear of running out.

As the US produces 90% of the world’s helium, it has historically fallen on the Americans to regulate helium production. To do this the US government has passed a lot of legislation to control and influence the helium market, beginning with the Helium Acts Amendments of 1960 which promoted production. Then as the National Helium Reserve fell into debt (totalling $1.4 billion), the Helium Privatization Act of 1996 was introduced, which planned to sell off the reserve.

However, not much of the reserve or production was ever sold, as the government later realised the importance of helium to the world economy and strategic defence. To this end, the Helium Stewardship Act of 2013 was enacted. This was a simple and sensible reform to fix the helium market. Simply put, the bill directs The Secretary of the Interior to slowly raise the price of crude helium, whilst at the same time phasing out a system which meant that 90% of production was earmarked for sale to four big companies.

As Paul Ferrel states, “the Federal Helium Program’s “open market sales” created windfall profits for Air Products, Praxair, Linde, and Keyes (the big four).” Buying, as they did, 90 – 96% of American production at prices that were artificially set.

Now that this system is being phased out, it is hoped that the market will soon begin to compensate and that production will grow to match demand.  Already the position is improving, as Qatar has opened a new helium facility that produces 60 million cubic metres. Whilst an Algerian plant has also opened annually producing 17 million cubic metres, this added with the booming gas industry and the development of fracking, means that we have little to fear at present.

As helium expert A.G.A. Hammoutene of Delft University of Technology states, “The economically extractable world reserve of helium was estimated at 18,066 million cubic meters in 2008.” Given that since 2008, prices have since grown by more than the 5 – 10% increase in demand, the economically extractable world reserve can be calculated as growing at a rate that means we will not run out for a very, long time.

However, this does assume that end users are prepared to pay ever increasing prices. In the short to medium term, that seems likely, given that there is no easy way to replace it in the vital areas of medicine, defence and space exploration.

But this has resulted in today’s shocking times, where prices are continually increasing for an indispensible product. This is a situation that cannot be maintained indefinitely. We have to change the way we use and think about helium.

Already the US Helium industry is valued at an impressive US$830 million. But maybe helium should be much more expensive than the markets suggest. As Paul Ferrell, a Stanford based economist notes, “If price were equal to true value … the industry would be much bigger.”

Maybe this is where we went wrong all along. We have spent so much time filling our party balloons and making sqeaky voices that we never stopped to see the gas as a finite resource. We shouldn’t panic that helium is running out, because it scientifically isn’t, and neither should we panic that prices are now unreasonable. It is more that we need to change our unreasonable way of thinking about helium and start to value this noble element with the worth it deserves.

When Fredrich Wohler first synthesised a compound (oxalic acid) in 1828, he could hardly have imagined the number of synthetic compounds that we would be using nearly 200 years later. Today, these compounds are all around us, in any number of things from clothes to packaging to cosmetics, but as this number grows, more and more people are beginning to question the health aspect of a world surrounded by synthetic compounds.

To combat these concerns, various agencies have been put in place to regulate, inspect and enforce standards of care for the growing number of new products that enter the market every year.

But given the huge number of new products and developments in chemical engineering that occur daily; can legilsation keep up?

If anybody knows the answer to this question, it is the European Union, who by putting in place the REACH legislation (Registration, Evaluation, Authorisation and Restriction of Chemicals). These laws were introduced as an assessment system for every new individual complex substance for export or import across the continent.

Despite the huge complexity and uniqueness of the task it was set the program appears to be performing well. Whilst this in itself is a noticeable achievement, it is even more worthy given that the legislation disadvantages the EU’s chemical industry in the global market.

Even more noteworthy, is that the legislation is working, despite the huge pressures laid upon it, putting (as it does) manufacturers, importers, exporters, traders and businessmen in direct conflict with scientists.

But now the process has hit a bump in the road, that will show its true value, for the complex compound of unsaturated polyfluorinated alkyl (PFAS) has been questioned by scientists for its bioaccumulation and toxicity. This is a problem, for some of these compounds form part of a group of surfactants widely used in waterproof fabrics, food packaging and cosmetics.

Other compounds in question include PFOA (perfluorooctanoic acid) and PFOS (perfluorooctane sulfonate) as they have been linked to tumour growth and neonatal deaths, as well as toxic affects on the liver and immune system.

Recently, around 200 European scientists signed a declaration calling for a ban on production and use of these substances and suggested alternative products focus on shorter polymer chains.

So what happens next?

As usually happens when business meets science, the matter turns from being one of economics and science into one of politics. Where only time (and possibly money) will decide on implementation of laws and who is to be punished (if anyone).

We must therefore only trust in the system, and hope that the health of the people and the environment will be given proper consideration. For despite REACH’s successes, the regulations are still fresh and this new test case may well show its real strength or weakness.

Ever since the Great Crisis of ’08, business has looked different.

Those of us who are old enough to remember those heady, pre-crash days, look back fondly on the positive world of trading with a view to making profit. But ever since 15^th September 2008, when Lehman Brothers collapsed, leaving Western civilisation staring into the abyss, the approach to making a deal has shifted. We are now all more concerned about not losing money.

This has led us into a mental spiral of driving costs down, and that means driving down the prices of our suppliers.

This is a message maintained by consumer society, where adverts bombard us with ‘Buy Cheap’, ‘Watch the Pennies’ and ‘Save Money Now’, a theme that has been upheld by big corporations the world over.

For example, as the Wall Street Journal reported soon after the credit crunch, Kraft used the slogan, “the wallet-friendly meal your family will love.” Meanwhile, Campbell’s Soups (a well established brand that usually focuses on quality, promoted its condensed soups with ads that read, “To save you money, we left one ingredient out (we figured you have plenty of water at home)”.

If these two successful brands are keen to concentrate their marketing on low price; shouldn’t we all be doing it?

Julia Cupman, Global Director of business consultants, B2B International, doesn’t think that price focus is always the correct approach. She notes that, “Luring buyers into a low value mindset is dangerous.” She refers to the Campbell’s Soup Company’s decision to highlight the low cost of a tin of soup as a negative move. “A company that at one time was positioning itself in its marketing communications as a provider of quality has now damaged its brand by changing its focus (to price).”

Much has been written on this topic. With numerous experts, marketers, economists and psychologists arguing that price is not the greatest factor in deciding to buy or not. They speak of ‘perceived value’, ‘price leadership’ and ‘value propositions’.

But why do so few experts want to acknowledge the importance of price?

Price is important. As the British government private/public support partnership, Business Link, states, “Price is the only element in the marketing mix that produces revenues; all others represent costs.”

Certainly fortunes have been made by those devising new products and markets; Microsoft, Colgate, Facebook, Hoover and others did not focus on price, and made a fortune. But plenty of others have had huge successes based on price.

The British supermarket giant, Tesco, was founded by Jack Cohen on the principle of ‘Stack it high and sell it cheap.’ Similarly, one of Walmart’s first stores was called “Walton’s Five and Dime”, thus incorporating low cost even into the brand name.

Certainly Henry Ford was innovative and is often quoted for his belief in quality, but his business model was greatly dependent on price. In fact he said, “I will build a car … from the best materials, by the best men to be hired, after the simplest designs … but it will be so low in price that no man making a good salary will be unable to own one.”

Ultimately, something can be too cheap, but only if bought from the wrong supplier. If your business connections are trustworthy, have a good credit rating and a reliable trading history, then there is no shame in driving prices low. After all, business is business, and if your trading partners are wise, then they will look to the long-term and ensure that each deal is satisfactory to both parties. If this is the case, then cheapest is best.