Exploration work by helium startups in Western Canada has been tapering off and the rate of production growth slowing over the past year, with one company (Royal Helium) going bankrupt, another private (Global Helium), and others appearing to be in financial distress.

Privately held North American Helium appears an important exception.

To identify the major causes for this downturn, and explore the likely path for Canadian helium production growth over the next several years, DOB Energy interviewed three prominent helium experts — Phil Kornbluth, president of New Jersey-based Kornbluth Helium Consulting, Brad Hayes, president at Calgary-based Petrel Robertson Consulting Ltd.; and Richard Dunn, executive director of the Helium Developers Association of Canada (HeDAC).

Soft helium prices

Market conditions have become more challenging for helium exploration companies in Canada and elsewhere in 2025 with prices falling back from their 2022-23 highs, while a wall of new supply — much greater than probable demand over the next several years — looms over the market, according to Kornbluth.

“Prices have come down significantly from where they were during Helium Shortage 4.0 due to oversupply in the market,” he said.

“Russian supply is on the rise with the first phase of Amur coming back online after its fire in early 2022, while being priced at a low level due to sanctions. This is having a spillover effect, negatively impacting prices for other helium producers. Additions to capacity by exploration start-ups has also been adding to oversupply and lower prices.”

For example, the U.S. export price for Grade-A helium averaged US$373 per thousand cubic feet in September —the latest month available — compared to a post-COVID low of US$126 in August 2021 and almost US$500 in the second half of 2022.

Prices are down almost 10 per cent year-to-date.

“The [price] outlook will be impacted more by what happens on the supply side than the demand side, with only modest demand growth — two to three per cent per year — driven by semiconductors and aerospace, and partially offset by MRI [magnetic resonance imaging] shrink,” Kornbluth said.

In contrast, “the pipeline of new projects is very full with three large helium production projects nearing completion — Russia’s Amur 2, Qatar 4, and Blue Spruce in Wyoming.”

These three projects alone could add 99 million cubic metres (MCM) to global helium supply by the second half of 2028, increasing it by more than half (see Figure 1).

Total global helium supply was 180 MCM in 2024, based on U.S. Geological Survey data.

In terms of future helium prices, “if some of this new capacity is delayed or cancelled, prices should begin to stabilize,” Kornbluth said. “If all of these projects force their way into the market, prices could still have significant downside.”

However, there is always potential for Black Swans on the supply side, such as the previously mentioned fire at Amur 1 shortly after it was commissioned, to prop up helium prices, according to Kornbluth.

“Of course, there is always the possibility that a Black Swan event could take supply off the market, such as a Middle East war or a drone attack on Amur,” he said. “The nature of Black Swans is that they are unexpected and difficult to predict.”

Small pool size

A core issue for helium startups in Western Canada to date has been the small size of their helium finds, according to Hayes.

“Helium discoveries have generally been quite small and limited in extent,” he said. “Most initial activity was in the ‘green helium’ fairway of southern Saskatchewan and southeast Alberta where reservoir geology dictates small pools.”

“North American Helium has found a number of these pools and has built standalone extraction facilities, but many new prospects drilled by others, particularly Royal Helium, have not demonstrated adequate/economic reservoir geology,” Hayes added.

Steveville in southeast Alberta was a more significant helium discovery by Imperial Helium, but when the company could not raise the necessary funds to develop it, Royal Helium acquired the asset and built a plant, according to Hayes.

“Unfortunately, it didn’t perform as expected, leading to Royal’s bankruptcy,” he said.

“There are potentially bigger pools and better economics in helium prospects in west-central Alberta, where helium can be co-produced with natural gas and liquids [rather than nitrogen, as is the case with so-called green helium], but explorers there are finding it difficult to attract investors in part because of the limited success in Saskatchewan and the Royal bankruptcy,” Hayes said.

Discriminatory federal policies

“In the current low commodity price environment, Canada’s uncompetitive tax treatment for helium, as compared to what is provided to all other critical minerals in Canada, is proving especially impactful,” Dunn said.

“Helium exploration and development activity has tapered off significantly, production is levelling off, investor confidence has fallen, and increasingly Canada’s small-cap helium companies are looking to the U.S. given preferential tax treatment and investor sentiment,” he said. “At this point, after four or five years, we should be growing exponentially.”

Canada’s nascent helium sector is ineligible for both standard tax measures — including competitive depreciation treatment and the proven flow-through share program — as well as the targeted measures designed to bolster critical minerals that have been introduced by the federal government in recent budgets (including the Critical Mineral Exploration Tax Credit and the Productivity Super-Deduction programs), according to Dunn.

To revive Canada’s helium industry, it’s imperative that the federal government provide “fair tax treatment to helium on the same basis provided other Canadian critical minerals,” he said.

In addition, the feds should support “domestic helium liquefaction facilities and champion market expansion for Canadian helium, consistent with measures brought forward by the federal government in Budget 2025,” Dunn added. “This would bolster the emerging helium sector, support Canada’s economic and digital ambitions, and address Canadian end user security of helium supply concerns.”

In contrast, Dunn and Hayes both believe the Alberta and Saskatchewan governments have done basically all they can to support the helium production industries in their provinces.

“Saskatchewan and Alberta have provided strong support over the past several years for helium startups,” Dunn said.

“Saskatchewan led the way through its comprehensive 2021 Helium Action Plan which implemented incentive programs targeting sector innovation and addressing the high cost of helium processing facilities. Both provinces have implemented competitive royalty frameworks and have invested in foundational geological and geophysical studies that the helium sector has been able to leverage.”

“Saskatchewan is already particularly supportive in land tenure and provincial taxation,” Hayes said. “I’m not sure what else either province [Alberta and Saskatchewan] could do.”

Helium production outlook

Looking forward, Hayes and Kornbluth are relatively pessimistic about substantial helium production growth in Canada, whereas Dunn is optimistic, with their outlooks dependent upon a combination of luck — stronger helium prices and greater exploration success — and the federal government treating helium fairly compared to other critical minerals.

“Short- to mid-term growth prospects are poor for Canadian [helium] explorers,” Hayes said. “We need a market turnaround, and some real, public exploration success to attract investor attention.”

On that note, North American Helium, the dominant producer in Canada — accounting for the vast majority of the country’s six MCM total in 2024, and over three per cent of the global total — is a privately held company, so there is no publicly available information about the performance of its wells and the company’s overall financial performance.

“The shift from shortage to oversupply has reduced prices and made it more difficult to sell the helium story to investors,” Kornbluth said. “Some of the exploration start-ups were never more than stock promotions who were attempting to jump on the helium bandwagon.”

“North American Helium is the major exception as they acquired the most prospective acreage, raised significant amounts of capital, built a highly competent team and progressed to production,” he added. “They are the major success story in this space.”

“With Canada’s prairies estimated to hold the world’s fifth-largest helium resource and worldwide demand for helium growing given its fundamental role in a range of high-tech applications — including semiconductor manufacturing and quantum computing — with the right fiscal framework in place, Canada has the potential to be a major helium producer,” Dunn said.