BLM Completes FY 2018 Crude Helium Auction

The US Bureau of Land Management (BLM) held its FY 2018 Crude Helium Auction in Amarillo, Texas yesterday, the fourth crude helium auction conducted by the BLM since passage of the Helium Stewardship Act of 2013.

The FY 2018 auction was the penultimate crude helium auction by the BLM as the Federal Reserve of crude helium will reach the minimum level of 3 billion cubic feet mandated by the legislation after the FY 2019 auction and Conservation Helium Sale, at which time, no further sales of crude helium will be allowed to private industry. The BLM auctioned off a total of 500 million cubic feet (MMscf) of crude helium in 30 individual lots. There were 13 lots of 25 MMscf each, 9 lots of 15 MMscf each and 8 lots of 5 MMscf each. The overall result of the auction was that 500 MMscf of crude helium was sold for total proceeds to the BLM of $59,655,000, or an average price of $119.31/Mscf (thousand cubic feet). The average price represents an increase of $12.21/Mscf or 11.4% from the average price of $107.10/Mscf that resulted from the FY 2017 auction. A total of 6 companies successfully acquired crude helium during the auction, with Air Products dominating the auction with purchases of 385 MMscf. The remaining 5 successful bidders shared a total of 115 MMscf between them, with no one purchasing more than 30 MMscf. The table below summarizes the results of the auction.

BLM Crude Helium Auction Summary

The BLM will also be offering an additional 400 MMscf of crude helium for sale as part of its Conservation Helium Sale during August, bringing the total volume of crude helium sales up to a potential total 900 MMscf. The BLM will only have about 400 MMscf of crude helium available for auction and sale in the BLM’s FY 2019 sales process. For that reason, the FY 2018 auction and sale are seen as the last good opportunity for the helium refiners and other helium marketers to accumulate inventory for consumption during future years. That is the likeliest explanation for the healthy 11.4% increase in the average auction price.

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Billionaire Space Prospectors Are Racing To Mine The Moon, And That´s A Good Thing

Right now, as you read these words, there’s a galactic gold rush brewing that will make 1840s California look like a rehearsal dinner. At this very moment, a handful of billionaire-backed companies are planning to mine outer space for ungodly reserves of precious metals and other untapped treasures. On the moon alone, quadrillions of dollars of interplanetary paydirt are at stake. This isn’t just a high-flying, hopelessly optimistic plan, either. Things are already in motion. The rockets are built and the FAA has already given certain companies the all-go for launch. The cosmic golden nuggets are ripe for the picking and fortune, as the saying goes, favors the bold. Whether we like it or not, some of the wealthiest venture capitalists on Earth will soon launch mining operations on the Moon — and if we ever hope to become a multi-planetary species, that isn’t necessarily a bad thing.

The Cosmic Gold Rush

The treasures these space-age prospectors seek are myriad. The lunar surface is brimming with not only precious metals and rare isotopes, but also a litany of other natural resources. Some of these are ridiculously valuable. Helium-3, for example, currently has a projected value of $40,000 per ounce. To put that in perspective, gold is currently being traded at about $1,200 an ounce. This incredibly high valuation comes from the isotope’s relative scarcity here on earth, as well as its potential as a fuel source. Helium-3 could be used as an efficient, alternative fuel source in fusion reactors, and about 220 pounds of it could theoretically power Dallas for an entire year.
Not all the Moon’s treasures are quite so exotic, however. In addition to rare isotopes and precious metals, there’s also cold, hard cash for the taking. Google has set aside $30 million in prize money for its Lunar X Prize Competition, in an effort to challenge privately funded engineers and entrepreneurs to develop lost-cost methods of space exploration. In other words, whoever gets to the moon first not only gets unfettered access to its resources, but also millions of dollars just for arriving first. Google also offers individual prizes for completing certain milestones — including a Water Detection Bonus Prize. As it turns out, water may be the most valuable resource not only on the moon, but also in the solar system. Once frozen water has been located, the hydrogen and oxygen can easily be separated — and if you have hydrogen and oxygen, you have rocket fuel. Just imagine how much money the first lunar gas station could charge per gallon!
To top it all off, even the moon’s dirt (known as regolith) is highly valuable. Due to the high per-pound cost of sending materials into orbit, anyone hoping to set up a mining operation on the moon will need to “live off the land” as much as possible. With this in mind, a team at Virginia Tech has already used simulated regolith to create bricks that could be used for lunar construction projects. Similarly, the European Space Agency has developed a synthetic regolith that, when mixed with magnesium oxide, yields a material with 3D printing potential. Why ship a moon base brick-by-brick when you could just as easily print it — or better yet, sell the bricks to a lunar construction company?

Meet The Miners

elieve it or not, there are already a handful of private space companies racing each other toward the launchpad. In late 2016, Moon Express — arguably the world’s foremost lunar mining company — received approval to launch a moon mission. This marks the first time the government has approved a private mission beyond Earth orbit. “We go to the moon not because it is easy, but because it is profitable,” jokes Naveen Jain, co-founder and chairman of Moon Express, invoking John F. Kennedy’s famous Rice University moon speech. That isn’t just a clever quip, though. Moon Express has already raked in one million dollars in X Prize money for being the first private company in the competition to present and test a lunar lander vehicle. The company could cash in on other X Prizes as early as November of this year; that’s when the company hopes to land on the moon. To compete for the $20 million first-place prize, all a privately funded company needs to do is successfully place a spacecraft on the moon, travel 500 meters across the lunar surface, while transmitting high-definition images and video back to Earth. Easy enough, right? Thing is, Moon Express isn’t the only outfit in town. It’s currently in a race against a handful of other space mining companies — the most notable of which are Deep Space Industries (DSI) from Mountain View, California, and Planetary Resources from Redmond, Washington. While not explicitly focused on the moon, both companies are carving out their own slice of the burgeoning space mining market by developing technologies to survey and extract resources from Near Earth Asteroids (NEAs). Due to their proximity to Earth, many water-rich NEAs are much easier to access than the moon. For this reason, Planetary Resources has dubbed these bodies as the “low hanging fruit of the solar system” and is developing a space telescope platform to analyze NEAs to determine their makeup. This data will then be used to pinpoint which prospects to mine for raw materials (namely water and Platinum Group Metals). The company plans to launch its asteroid prospecting system in 2020. Similarly, DSI Will use its Prospector-1 spacecraft to rendezvous with a NEA to determine its composition and subsequent value. The company hopes to eventually use a fleet of “harvesters” to the latch onto resource-rich asteroids and extract water. After processing, thrusters will supposedly be able to use this water as a propellant to tow the asteroid back to near-Earth space where these assets can then be processed. The company is set to launch its prototype Prospector-X spacecraft later this year.

Finders Keepers; Losers weepers

It used to be that laying claim to space rocks was tricky business, but thanks to some forward-thinking legislation enacted in recent years, many of the legal hurdles standing in the way of these space mining operations have been ironed out. Up until recently, there weren’t many ratified international laws or treaties regarding resources found outside of our planet. In 1967, we got the Outer Space Treaty, which establishes broad parameters about the use of space for peaceful purposes, and also specifically states that no country can own anything outside of Earth. Obviously, this agreement isn’t exactly ideal for anybody looking to set up a moon mining operation. But the game changed two years ago. In 2015, the Obama administration pushed forward the Commercial Space Launch Competitiveness Act. This legislation essentially works around the semantics of existing treaties, and enables individuals to recover resources in space without outright claiming sovereignty over the lunar land that the resources were taken from. “Think of these planets as international waters,” says Jain. “Nobody gets to own the underlying things, but they can use the private resources,” “They [can] own the fish and the oil … we as a private company are flying under the U.S. flag, in some sense then, we are a ship in international waters.” With the legal framework in place to determine who owns the rights to any resources recovered on the moon and beyond, the doors of opportunity have been flung wide open. There’s a massive hoard of loot floating over our heads, and whoever gets there first basically has carte blanche to mine it — we just have to make the trip.

The Technology Is Underway

It might seem like all this space mining business is still multiple decades away from coming to fruition, but Ian A. Christensen, a Project Manager with the Secure World foundation, believes this new era is closer than you might think. “In the next couple of years, we will see companies fly technology demonstrations and early “prospecting” missions, in Earth’s orbit, to asteroids, and on the lunar surface,” he explains. “Commercial demonstration and validation missions for the actual resource extraction technology are possible within a decade.” Former NASA researcher, Dr. Phil Metzger, shares a similar sentiment. “The main challenge for this concept,” he explains, “is neither technology nor cost, but simply convincing people it is realistic.” As futuristic as it may seem, the technology is already in development. NASA has partnered with machinery giant Caterpillar Inc. as part of the Innovative Partnerships Program. The joint collaboration looks to develop “regolith moving operations” such as trenching, strip-mining, boring, and excavating. NASA’s Resource Prospector mission — which could be launched as soon as the early 2020s — will utilize a rover to search for subsurface lunar resources. Once a deposit has been located, the vehicle will deploy a drill to extract materials up to one meter deep. A single meter might not sound like much, but on the moon, many of the most valuable materials don’t require massive excavation projects to obtain. Due to millions of years of impacts, the surface of the moon itself is covered in rich deposits. At the beginning of the California gold rush, gravel beds were so concentrated with gold, the early forty-niners could pan by hand for these resources in streams without heavy extraction methods. The uncolonized moon will likely be similar, which is precisely why Jain dislikes using the term “mining” as it pertains to the lunar surface. “Mining has such a negative connotation, people think you’re drilling a hole and destroying things,” Jain explained in an interview with The Guardian. “This is more like collecting or harvesting.”

Space Travel Is Getting Cheaper By The Month

Not too long ago, sending something into space cost a lot of money. In fact, it still does. But that cost is rapidly decreasing, thanks in large part to innovation and competition amongst private-sector launch providers like SpaceX, United Launch Alliance, and Orbital ATK. Right now, it costs roughly $10,000 per pound to launch something into orbit. SpaceX hopes to bring that down to $1,000 in the next few years. “NASA has been building rockets for god knows how long. It took Elon Musk to build a reusable rocket,” says Jain. “NASA didn’t do it … Elon disrupted the rocket industry by bringing the cost of the rocket down from 200 million [dollars] to 70 million [dollars]. I know people that are building rockets for a million [dollars]. And those rockets will come to cost thousands of dollars.” He’s not exaggerating. Moon Express is working with companies on the bleeding edge of space travel. The company currently has a contract with a company called Rocket Lab, and plans to use the company’s Electron rocket system for its inaugural moon mission. The Electron utilizes Rocket Lab’s revolutionary Rutherford engine for both stages of propulsion. The body is created out of carbon composite, greatly reducing overall weight. The engine itself is made almost entirely out of 3D printed components. Normally it takes months to build a rocket engine from scratch, but Rocket Lab can build its engine in just three days. “It’s not [NASA’s] job to innovate,” according to Jain. “Their job it to create the foundation of science and the foundation of research. It’s the job of the entrepreneur to go out and commercialize and reduce the cost and create the businesses around it.”

Boomtowning

As soon as one of Earth’s intrepid space prospectors sets up the first outpost on the moon, the floodgates will open up. After one group builds the lunar infrastructure necessary to support a mining operation, it will also pave the way for other companies to follow suit. Moon Express has its sights set on much more than mining the moon’s untapped resources, The company’s endgame is to set the foundation for a lunar supply chain. As such, Naveen Jain sees himself as less of moon marauding space pirate and more of a space-age Steve Jobs. “What Moon Express is really doing is building the iPhone of the moon, and that iPhone will obviously have an app store,” Jain explains. “We’re going to build a bunch of apps and we are going to let third parties build a bunch of apps too. When we land on the moon and we build the underlying iPhone infrastructure, what will be the Pokemon Go of the moon and who will build that?” From harvesting rare-earth elements, to building moon motels made of regolith, to building a lunar gas station; the moon is ripe with economic potential. This is more than a space-age cash grab, though; it’s a necessary step for humanity if we ever hope to become a multi-planetary species. Oddly enough, handing over the keys to the universe to literal corporate golddiggers — as off-putting as it may be — might just be the most viable and economical step toward establishing humanity’s first extraterrestrial colony. “In 15 years, the moon will be an important part of the Earth’s economy, and potentially our second home,” Jain notes. “Imagine that.”

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This One Imperfection In Nuclear Physics Allowed Earth To Exist


The Bubble Nebula is on the outskirts of a supernova remnant occurring thousands of years ago. Nebulae like this showcase where massive stars are born, and also where heavy elements get added back into the Universe, giving rise to rocky planets and organic materials like what we find here on Earth.

In order to create a rocky planet that’s teeming with life, the Universe needed to create large amounts of the heavy elements required for life’s processes. To make many of those elements, such as Tin, Iodine, Selenium, Molybdenum, Zinc, and Copper, you need supernovae to have occurred many times in our galaxy’s past. To get many more, such as Iron, Calcium, Cobalt, Sulfur, and Potassium, you need stars massive enough to create them. Yet the Universe was born, almost exclusively, with mere hydrogen and helium. If all you had was hydrogen and helium, it would be impossible to make a star more massive than about three times the Sun’s mass; these heavy elements would never be created and spread throughout the Universe. The only reason we can exist, today, is because one tiny imperfection in the early Universe allows the stars to grow hundreds of times as massive. In order for the Universe to exist as we know it, we need these massive stars. In a star like our Sun, the central region reaches high enough temperatures to fuse hydrogen into helium, which we’ll do until the core run out of fuel. When that happens, the inner parts of the Sun contract down, heating up to temperatures large enough to fuse helium into carbon, along with trace amounts of other elements. But when we’re out of helium fuel, that’s the end-of-the-line for the Sun; we don’t have it in us to fuse carbon or any heavier elements. It takes a star at least eight times as massive as the Sun to do that. It’s those very same massive stars that end their lives in supernovae, creating and recycling large amounts of heavy elements back into the Universe. In most Milky Way-sized galaxies, we see multiple supernovae every century, indicating that these massive stars are common. In fact, there’s strong evidence that wherever in the Universe you form large bursts of stars, even for the first time, you’ll make many stars massive enough to create these heavy elements. But if all you had were hydrogen and helium, this would create a huge problem: hydrogen fusion begins at temperatures of approximately 4,000,000 K, which requires at least 1.6 × 1029 kg of mass to collapse down into a star. Once hydrogen fusion ignites, however, the outward flux becomes so energetic, very quickly, that no new mass can be added to that star. Once you become a star, you push those gaseous elements that would otherwise gravitate towards you away, preventing your star from growing further. If all you had were conventional hydrogen and helium, where hydrogen is made of one proton and helium is made of two protons and two neutrons, your proto-star would contract down rapidly, heating up to fusion temperatures in short order and emitting large amounts of high-intensity light. This radiation pushes against the nearby material that helped form the star in the first place, blowing it away from the star and overcoming gravity. You might form stars up to about three times the mass of the Sun, but the more massive ones — the ones we need to create an Earth-like world — would never come to exist.Thankfully, the Universe has, even from birth, an extra ingredient that makes much more massive stars possible. That extra ingredient is a heavy isotope of hydrogen: deuterium, which contains a proton and a neutron together. When you have deuterium and normal hydrogen nuclei together, it takes only a temperature of 1,000,000 K to fuse them together into helium-3, producing radiation that’s much less violent and forceful. This deuterium-burning is the first nuclear reaction to happen in a proto-star, and it pushes the core outwards enough to cause the temperature to rise far more slowly than if there were only hydrogen. Even a small amount of deuterium, less than 0.01% of the initial star’s mass, can delay the temperature increase up to hydrogen fusion by tens of millions of years, buying gravitation the time it needs to grow stars up to tens or even hundreds of times the mass of the Sun.

From beginning with just protons and neutrons, the Universe builds up helium-4 rapidly, with small but calculable amounts of deuterium and helium-3 left over as well.

So where did this deuterium come from? During the first few seconds after the Big Bang, the Universe was made of protons and neutrons, which attempt to fuse in a chain reaction to form heavier elements. But that first step involves making deuterium, which is easily destroyed by the high-energy radiation permeating the young Universe. It isn’t until minutes have passed that you can make deuterium without it being blasted apart. While this leads to a Universe that’s about 75% hydrogen and 25% helium, there are tiny, trace amounts of deuterium and helium-3 that get formed, along with even smaller amounts of lithium-7.


The abundances of helium, deuterium, helium-3 and lithium-7 are highly dependent on only one parameter, the baryon-to-photon ratio, if the Big Bang theory is correct. The fact that we have 0.0025% deuterium is needed to allow stars to form as massive as they do.

Even though only about 0.0025% of the Universe, by mass, becomes deuterium (about 1/40,000th) in this process, that’s enough to give even the first stars up to 50 million years to grow in size before hydrogen fusion takes over. Once you make stars that massive, the standard story of hydrogen-helium-carbon fusion takes place, generating large quantities of heavier elements that will get returned to the Universe for future generations of stars. Rocky planets become possible; the essential elements for life get spread throughout the Universe. By time many billions of years have passed, planets like Earth can form, and organic materials like sugars, amino acids, and aromatic hydrocarbons will simply bind together naturally. The raw ingredients for everything we know life requires automatically pop into place. But without that tiny bit of inefficiency — without that easily-destroyed deuterium left over from the Big Bang to delay the fusion reactions in the cores of stars — it would all be impossible. Our Universe is an imperfect place. But that’s an absolute necessity. Without those imperfections, we’d never be able to exist.

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More Helium Is On The Way

Entrepreneurs forge ahead with new, on-purpose wells, but they need Congress to clarify lease terms

Changing a few words in a U.S. law governing mineral resources could help ensure more domestic helium for cutting-edge science. Late last month, the U.S. House Subcommittee on Energy & Mineral Resources held a hearing on the proposed Helium Extraction Act of 2017. It would update the Mineral Leasing Act of 1920 and allow drillers to push wells into underground caverns on federal lands solely to extract the element. Under the existing law, well operators can lose their leases if they aren’t producing oil or natural gas along with the helium. That arrangement was fine when helium prices for scientific users were in the low-single-digit dollars per liter and producers recovered the element only as a by-product of extracting natural gas. A result of uranium and thorium disintegration, helium is found in some gas wells at concentrations ranging from 0.2 to 7% by volume. But shortages in the past few years have sent helium prices ballooning to the teens. Market jitters over the long-term availability of a domestic source of the commodity have also kept prices high. Now, with prices for helium staying buoyant, the economics of developing wells solely for their helium is suddenly attractive. A number of those on-purpose helium wells are up and running, and developers promise more of them are on the way—provided they can get good lease terms. Scientists use helium as a coolant for nuclear magnetic resonance magnets and as a carrier gas for gas chromatography and mass spectrometry. It’s prized because it is chemically inert and is a liquid at temperatures near absolute zero. Helium is also used for welding, medical imaging, and making semiconductors. Helium is largely extracted by energy companies such as ExxonMobil and refined by Air Products, Linde, and other industrial gas firms. Over the past decade, most big helium projects have been in places such as Qatar and Algeria that are plagued by geopolitical uncertainty. Russia, often at odds with the U.S., plans to bring a large helium plant on-line in 2021. Meanwhile, helium development in the U.S. has been less aggressive. “Without a domestic source of helium, American industries will be forced to rely on foreign-sourced helium,” noted Paul Gosar (R-Ariz.), chairperson of the House subcommittee considering the new helium act. The recent blockade of shipments from Qatar and the looming end to U.S. government sales of excess helium inventories further highlight the precariousness of the helium supply situation. Because of a political dispute, Saudi Arabia cut off helium shipments from Qatar to the Port of Jebel Ali in Dubai, United Arab Emirates, in June. Qatar then shut down units that separate helium from natural gas, severing about 30% of global helium production. Users braced themselves for a shortage, but earlier this month, helium began flowing again when regular shipments of the element resumed from a port not subject to the blockade. While the Qatari situation appears to be resolved for now, shortfalls are likely to occur again after the U.S. government conducts its last sale of excess helium inventory in the summer of 2018. Sales from the helium stockpile annually add more than 20 million m3 of helium to the market. The government helium, together with helium from private sources, brings annual U.S. output to about 80 million m3. The U.S. produced 53% of global helium supply in 2015, consumed 42%, and exported the balance, according to Bala Suresh, industrial gases research director at consulting firm IHS Markit. Without the annual government helium sales, Suresh says, the U.S. will need to import helium or develop more untapped resources on its own. But on-purpose helium production won’t take up the slack right away, and it’s not clear if it will ever completely replace helium now sold from the U.S. reserves, says Phil Kornbluth, a consultant who previously ran the helium operations of Matheson Tri-Gas. Wells producing helium alone put out less than 5 million m3 of the element annually, he says. Testifying before the House Subcommittee on Energy & Mineral Resources last month, Jason Demers said, “The United States is blessed with abundant helium resources.” Demers, president of Tacitus Ventures, an Alberta-based helium exploration firm, is now working to lease land in the central Colorado Plateau, where he hopes to produce the noble gas in 2019. Many helium resources, Demers told the subcommittee, “have been left largely undeveloped, as the helium has often been found in its highest concentrations within subsurface gas deposits that are regarded as noncommercial.” Demers tells C&EN that land his company is considering for lease, including federal lands, contains between 83 million and 195 million m3 of the element. Projects that Tacitus is considering would yield high-purity helium gas. Industrial gas companies could further process and cool the gas into liquid helium used, for instance, by operators of nuclear magnetic resonance spectrometers. “You can’t just snap your fingers and get new helium. It takes years to develop from concept to plant,” points out Scott Sears, upstream helium production president at IACX Energy, a Dallas-based helium processor and producer. In 2013, the firm started helium production at the Harley Dome field in Utah. The Harley Dome, designated a federal helium reserve in 1934, contains a mixture of nitrogen and 7% helium. A workaround with the federal government now allows IACX to produce helium from the reserve, Sears says, “but we need congressional action” to clarify leasing arrangements for IACX and others. The firm is developing a second helium-only site at the Woodside Dome field, also in Utah. Another federal helium reserve, the dome contains largely nitrogen and about 1.4% helium. Though the concentration is lower, the Woodside reserve actually contains more helium overall, Sears says. The company plans to start the facility in 2018. The Woodside and Harley Dome projects are relatively small, Sears says. “There’s no way we’re in the same echelon as ExxonMobil,” which produces about 20% of the world’s helium at a gas processing plant in Wyoming. But Sears sees no reason why IACX can’t become a large helium producer in time. “You’ve got to crawl before you walk and then walk before you run,” he says. Even Canada, which didn’t produce helium for more than 40 years, is once again a source of the noble gas. For example, Weil Group, a Richmond, Va.-based natural resources exploration firm, opened two helium wells in Mankota, Saskatchewan, in 2016. Using a pressure swing adsorption unit designed by Linde, Weil’s processing plant separates helium from other gases in the well and is capable of producing 1.1 million m3 of ultrapure helium annually, says Scott Cardozo, chief financial officer. Leasing government lands for helium extraction is more straightforward in Canada than in the U.S., Cardozo says. He notes that Weil has helium prospects in the U.S., but—as is the case for projects being considered by Tacitus and IACX—the decision to move forward will depend on federal leasing terms. Clearer terms will help all on-purpose helium projects move ahead, Cardozo says.

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Qatar Crisis Spells Big Trouble For Asia

Asian countries depend on Qatar as a resource supplier and labor destination.

A crisis over the fate of the government of Qatar and the West Asian peninsula it rules is already having an impact across Asia. The crisis has had a big impact on Asian companies who are invested in Qatar, as results on regional stock markets suggest. However, the crisis will have far-ranging impacts that are only now beginning to be understood. The repercussions will not only impact natural gas importers, but also impact a host of other markets ranging from helium to guest worker programs. Nine countries in Africa and Asia joined together in early June to sever all diplomatic ties with Qatar. Djibouti and Jordan also downgraded their ties. The bloc also implemented an embargo on trade with Qatar. The showdown was meant to force Qatar to end support for Hamas and other Islamist groups. Doha has long supported the Muslim Brotherhood and given shelter and citizenship to Yusuf al-Qaradawi, a controversial scholar who has argued in defense of suicide bombing. Qatar admits it has ties with a number of unsavory groups. The Qatari government, however, suggests that these relationships are part of its mediation efforts in regional conflicts. Qatar has not backed down during the crisis; Qatar’s ruling emir hosted a Ramadan dinner attended by al-Qaradawi in June. The only Asian country to join the Qatar embargo so far is the Maldives, whose elite are increasingly under the influence of Saudi Arabia and the United Arab Emirates. The Maldives government is also worried about the radicalization of young Maldivian Muslims. The country has sent more terrorist to fight for Islamic State in Syria and Iraq than any other country in per capita terms. “Yusuf al-Qaradawi has followers in Maldives and so does the Muslim Brotherhood in the Maldives,” explained Animesh Roul, executive director of the Delhi-based Society for the Study of Peace and Conflict. “In particular, the opposition Adhaalath Party has been influenced by the Muslim Brotherhood. That might change, but the rise of other extremist groups… has eroded the influence of the Muslim Brotherhood’s ideology to some extent.” However, natural gas — not terrorism — is the primary concern for most Asian countries when it comes to Qatar. Qatar is the world’s largest exporter of liquefied natural gas (LNG), and roughly two-thirds of the nation’s exports are sent to Japan, South Korea, India, Taiwan, China, and Thailand. India alone imports 65 percent of its natural gas from Qatar. Such contracts are awarded on a long-term basis, and the market is highly regional. The highest prices for such long-term contracts in recent years have originated in East Asia. One-third of LNG traded internationally originates in Qatar. As a result, unlike with oil, it will be difficult for Asian industrial consumers to find a replacement. Qatar’s ability to meet these contracts are likely to continue short of full-scale war. Iran controls the Straits of Hormuz, and Qatari-Iranian relations have strengthened as a result of the crisis.
When Qatar’s long-term LNG contracts come up for negotiations, though, buyers may seek greater supplier diversity. The short-term market will also be impacted. As a result, some of the long-term beneficiaries of such a switch could include Indonesia and Australia, which are both LNG exporters. “The Qatar crisis may well lead Asian LNG importers to consider supplier diversification for gas and will give importers leverage in future negotiations,” said Richard Rossow, a senior adviser and U.S.-India expert at the Center for Strategic and International Studies in Washington, DC. There is no denying Qatar’s role in the natural gas trade as the world’s largest exporter of LNG. Qatar holds an equally dominate, if not a more critical position, in the global helium market. Qatar is the world’s second largest producer of helium behind the United States. While Qatar’s massive LNG tankers continue to ply, Qatar’s exports of helium have stopped completely. Qatar moved to cut off helium exports to Saudi Arabia in response to the blockade, a decision that upped the stakes of the crisis. Previously all of Qatar’s helium exports were trucked through Saudi Arabia on their way to other ports. Helium is used in everything from the balloons at a child’s birthday party to defense applications. The market for the world’s lightest inflammable gas is a heavy matter for industrial companies. For Asian industries, helium is vital to the production of electronics, semiconductors, fiber optics, and a host of other industrial applications. On its website, Qatar’s Rasgas company succinctly explains the importance of Qatari helium to Asia: “Since 2000, world demand for helium has increased by approximately 20 percent. Future growth in helium consumption is expected to be driven by demand from electronics manufacturers in Japan, China, Republic of Korea, and Taiwan.” Qatar’s move to end helium exports will have ripple effects across the economies of East Asia. South Korea alone gets a third of its helium from Qatar. Iwatani, a Japanese firm involved in the helium trade, told Reuters that it has only a month of helium stockpiles to meet demand. Iwatani is considering new ways to import from Qatar, but logistical considerations will take some time to develop. Experts say helium consumers will start feeling the shortage in July. Indeed before Qatar’s move to shut down helium supplies, global demand for the gas was growing at 2 percent a year. Even after new supply routes are found the impact will remain. In the long term it could well mean Asian countries will seek helium elsewhere. The quest for alternative helium suppliers could benefit the United States, which is the world’s largest producer and maintains a national helium reserve in Amarillo, Texas. The U.S Bureau of Land Management accounts for a fifth of the global helium supply and has increased helium production in response to the Qatari move. For other Asian states, the Qatar crisis presents a separate quandary as Qatar has been an important destination for labor exports for decades. Both Qatar and the surrounding Arab states are a major destination for South Asian expatriate labor. Indeed South Asian nationals constitute the largest expatriate group in the Gulf countries. The crisis is already having an impact on the labor market. The Philippines temporarily stopped Filipino workers from traveling to Doha; Vietnam has also reportedly suspended workers from traveling to the emirate. Qatar is seeking to prevent some guest workers in vital industries from leaving during the embargo as well. An extended blockade will mean a slowdown in the Qatari construction market due to the embargo. That will harm Qatar’s ability to finish the infrastructure needed to host the FIFA 2022 World Cup. “The tournament organizers will have allowed for some delays when devising the original schedule,” said Matt Ross, the editor of the trade publication Stadia magazine, “but a serious crisis could jeopardize even those contingencies.” So far it seems unlikely that the Qatari crisis will lead to open conflict. There is some precedent for the situation as Bahrain, UAE, and Saudi Arabia withdrew their ambassadors for eight months in 2014. The Saudi-UAE led coalition believes given the embargo and increased diplomatic pressure that Qatar will eventually cave to international pressure. In order to end the crisis, Qatar agreed to deport several Muslim Brotherhood leaders. The countries unveiled a list of 13 demands in late June, ranging from severing ties to the Muslim Brotherhood to closing Al Jazeera, Qatar’s state-funded internationals media company. Agreeing to the list, which also includes an audit of Qatari finances, is inconceivable for Qatar, but it does suggest a basis for negotiations to end the deadlock.

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