Helium prices soar as supplies shrink

12/28/2012 6:59 AM

12/28/2012 6:59 AM

Francey Freeman has seen the cost of doing business go sky-high.

Prices for buying helium to fill balloons and rental tanks at her Balloons Fantastique in Fort Worth have dramatically increased in the past year, because of a worldwide shortage of the lighter-than-air gas.

"Prices have quadrupled," said Freeman, who owns Balloons Fantastique. "And the price just went up again a couple of weeks ago.

"The more prices go up, the less people are able to get it. Thank goodness I can still get it," she said.

"I don't know what I would do if they told me one day I couldn't get any more."

Freeman is among the many florists and balloonists nationwide finding it harder to do business because the supply of helium -- a tasteless, odorless, colorless gas that inflates balloons and cools MRI machines -- is not just getting more costly, but also harder to find.

Texas is home to the country's only Federal Helium Reserve, a site outside Amarillo where more than one-third of the world's helium supply is produced, and the federal government has worked for years to deplete that supply.

Congress more than 15 years ago created a law requiring reserve officials to sell off their helium -- therefore privatizing the helium industry -- by 2015.

Now a handful of congressional leaders are trying to prevent the reserve from depleting its helium supply and closing its doors.

But at a time when congressional leaders are focused on avoiding the fiscal cliff and trying to prevent Bush-era tax cuts from expiring, preventing the helium shortage from getting worse may not be a top priority.

"We cannot let our national helium supply float away," said U.S. Sen. Charles E. Schumer, D-New York.

Looming shortage

Although it's the second-most abundant element in the universe, helium is running out.

The bulk of the world's helium supply -- which also is used in medical scanners, LCD screens, welding, electronics, metals, fiber optics, high-tech computer chips, aerospace and research -- is created through natural radioactive decay and can't be artificially created.

Federal officials created a federal helium program in 1925 to make sure they had adequate supplies of the gas for medicinal purposes, research and defense.

Although various sites throughout the state supplied helium through the years, the remaining site - an underground geological formation that stores crude helium - is about 15 miles northwest of Amarillo.

Workers there retrieve helium and pump it to customers connected to a nearly 450-mile pipeline that stretches from the Texas Panhandle through Oklahoma and to Kansas.

"Helium is the second-most abundant element in the universe, but here on Earth, it's rather rare," said Dr. Peter Wothers, a fellow of the Royal Society of Chemistry and a University of Cambridge chemist, who recently warned that the end of helium may be near. "Most people guess that we extract helium from the air, but actually we dig it out of the ground."

Some projections show there are about 11 billion cubic feet of helium at the North Texas facility -- less than half what was once there. Workers there have said they likely won't be able to sell off all the helium by 2015, but 2020 might be a reasonable target.

"Aside from being used to fill balloons, both for our entertainment, and for more serious purposes, such as for weather balloons, helium is used in other applications which depend on its unique properties," Wothers has said. "Being so light, and yet totally chemically inert, helium can be mixed with oxygen in order to make breathing easier. This mixture, known as heliox, can help save newborn babies with breathing problems, or help underwater divers safely reach the depths of the oceans.

"At minus 269 degrees centigrade, liquid helium has the lowest boiling point of any substance," he said. "Because of this, it is used to provide the low temperatures needed for superconducting magnets, such as those used in most MRI scanners in hospitals."

Reserve reauthorization?

Several congressional leaders spoke out this year in support of proposals to prevent the helium reserve from closing soon.

"American manufacturing, high-tech and medical industries are already struggling to deal with helium shortages and cannot afford to have a devastating disruption in the market," Schumer said. "If Congress does not act quickly, the key job-creating industries will face very real economic troubles."

Just last week, U.S. Rep. Doc Hastings, R-Wash., released a discussion draft of the Responsible Helium Administration and Stewardship Act - geared to put in place "a common sense plan" to sell helium from the reserve "in a responsible manner."

"This bill is an opportunity for both sides of the aisle to come together and fix a problem that will have serious impacts on American jobs and the economy," Hastings said. "Reforms are necessary to inject competition and obtain a more accurate price for helium that gets a fair return for taxpayers."

This measure would put in place a system to operate the reserve over the next decade, or until it runs out of helium; set fair prices; and ensure that retailers and the government alike get a fair share of the remaining gas.

But when only 3 billion cubic feet of helium remains, the last of it would be used for "federal national security and scientific needs," according to Hastings' proposal.

Another measure proposed this year would reauthorize the Federal Helium Reserve, making sure it doesn't close down, and work to sell off helium more carefully -- and at true market rates -- to make sure the current supply lasts longer.

"Loss of this supply would cause a severe disruption in the helium market, and significantly increase costs for American manufacturers," said Sen. John Barrasso, R-Wyo. "This legislation will ensure that American taxpayers get a fair return on the sale of helium from the Reserve."

A steady supply of helium is "critical to the manufacturing process and continued health of the U.S. semiconductor manufacturing industry," according to a statement from the Semiconductor International Association.

Government officials have said an undetermined amount of helium is available not only through the private industry, but it also is being processed in Wyoming and overseas sites such as Australia, the Middle East, Russia, Algeria and Qatar.

Local impact

Many dollar and grocery stores no longer carry helium tanks to sell helium-filled balloon. And those who are still in the business are definitely feeling a pinch in their pocketbooks.

Freeman said a 240-cubic-foot helium-filled tank that she once rented out for $60 now goes for $175. And a batch of 12 helium-filled balloons, which for years was $10.50, now costs $15.

But she creates a lot of balloon displays with air, so she may not use as much helium as some others.

"I don't know what to think about the increase," she said. "We have to go day to day."

Workers at Mary Poppins Balloons & Flowers in Fort Worth have felt the price increase as well.

"It's more expensive by far," said Chris Langeliers, a flower designer and deliveryman there.

"Some people are doing away with helium all together. Some people make a number of arches [and displays] with just air, putting air in a Mylar balloon and putting it on a stick.

"For now, we are not giving up on helium," he said.

"If it gets higher and higher, it will cost more to have it. ... Eventually, it may work us out of the helium balloon business."

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