You Can't Have a Party Without Helium Balloons
The Helium Problem No One Is Talking About
Helium is one of the best examples of a “hidden strategic commodity”—and the U.S. situation is a mix between a mistaken policies, geopolitics and demand increases causing supply concerns. Now, with the war in the Middle East, we’re seeing a perfect storm develop.
Helium
Helium is produced as a byproduct of natural gas drilling. Its unique properties as a nonreactive gas and supercooling liquid make it invaluable for MRI machines and rocket fuel. Helium in itself is not rare like some of the metals covered with State Speculators, but current market dynamics are pinching supplies.
Helium is also used in semiconductor manufacturing, space and defense industries. The USA obtains the vast majority of its helium from domestic natural gas processing, with key production hubs in Texas, Oklahoma, Kansas, and Wyoming. Every year, US leads with about 40% of the global production.
However, as technology advances faster and faster, helium has received some attention as of late because of a real, ongoing fragility—especially for chips + defense— with no real substitutes. Periodic shortages already happened (2019–2023).
The Helium Story (A Story of Government Intervention)
The government first began collecting in 1925. This was for the military (airships, surveillance) mostly for NASA and Cold War technology. This gave the US a near monopoly on helium. The reserve held ~1 billion cubic meters, extracted from gas production. However, after the reserve grew and grew, something happened in 1996. Congress passed the Helium Privatization Act of 1996 whereby the government was ordered to sell off the reserve since it was deemed “no longer strategic”.
The Reason? The reserve had accumulated $1.4B in debt after borrowing money from the treasury to build the infrastructure for helium storage.
One problem lead to another. Since they had a near monopoly and dumped this supply onto the market, helium was sold below market prices. The cheap gas crushed private investment in new supply from private companies (since they couldn’t turn a profit). By then demand was rising again but private supply still hadn’t the chance to grow supply inventories enough.
The reserve was winding down with no upside supply coming anywhere. Industries panicked (MRI, semiconductors, research) and this caused Congress to act (as they always do) by signing the Helium Stewardship Act of 2013 which slowed the sell off and introduced auctions. The US government maintained a controlled sell-off from 2013 to 2024 when it finally sold off its Federal Helium Reserve.
Now, the industrial gas company, Messer claimed the remaining storage system and distribution infrastructure spanning Texas, Kansas and Oklahoma, plus about 1 billion cubic feet of the gas.
Market Opportunity
One stock exploding upon finding new sources of helium.
For an inert gas, it’s very volatile.
Fast Forward: The Current Perfect Storm:
Geographically concentration:
Supply is now tied to places like Qatar, Algeria, and Russia
Qatar (around 1/3 of global supply) disrupted has created a huge sudden shock. Now the market is missing millions of cubic meters per month. Worse yet, ~10–15% comes from Algeria, not the friendliest of sorts with the USA, and Russia produces around 10% of global supply but sanctions and infrastructure to scale remain a problem.
This problem is further complicated by the fact it’s not “mined” normally. Rather, it is a byproduct of natural gas—and new domestic shale deposits hold very little helium.
Nature
Helium being so light literally escapes the planet—there’s no recovery process once it’s gone.
Storage is difficult
It must be compressed or liquified with specialized equipment—this requires investment and the correct infrastructure.
Healthcare beginning to panic again
MRI machines need thousands of liters of liquid helium to function. Health care workers across the United States say they can’t afford any disruptions to the helium supply chain.
Lucky for the USA, they are sitting the largest deposits of helium in the world to get moving again, while their adversaries are sitting on the rest.
In short, with supplies now disrupted (and it recent years), the largest domestic deposits, a history of (mis)managing helium, and growing demand for its irreplaceable use-cases—it’s worth speculating that helium sources will be brought back into the next big funding package from domestic sources.
State Speculator
Helium is more than just a gas, it’s a case study in how government intervention can distort a strategic market.
The United States built the world’s helium system, dismantled it through mispriced privatization, and ultimately exited the market entirely in 2024—transferring not just supply, but infrastructure and control to private hands like Messer Group, a German company.
Today, additional consequences are compounding
Supply is geographically concentrated (Qatar, Algeria, Russia)
Production is structurally constrained (as a byproduct of natural gas)
Demand is accelerating (semiconductors, defense, space)
At the same time, helium has no substitutes, cannot be recycled once lost, and is difficult to store at scale—hence, none of this can be ignored.
With recent geopolitical disruptions and prior shortages still fresh, the market is once again tightening. Healthcare systems are already signaling concern, and advanced manufacturing remains highly exposed. The U.S. still possesses meaningful helium resources, but no longer operates a strategic reserve or acts as a stabilizing force in the market. Something has to give.
Which raises a simple question:
How long before helium becomes strategic again?
History suggests that when critical inputs become scarce—especially those tied to defense and technological leadership—policy eventually follows. And when it does, capital tends to follow first.
If the USA is going to keep the American Empire party going, they’re going to need helium.
Follow State Speculator to learn of some helium players that I believe are very interesting as a piece of your portfolio.
You could use hydrogen for balloons but the party probably would end with a bang.
Thanks for the update.