Global Helium Shortage

A global helium shortage has turned the second-most abundant element in the universe (after hydrogen) into a sought-after scarcity, disrupting its use in everything from party balloons and holiday parade floats to M.R.I. machines and scientific research.

There have been shortages of helium in years past, like in 1958 when the Macy's Thanksgiving Day Parade balloons had to be filled with air instead of helium. However, industry experts and physicists say that this year's helium shortage has been one of the worst because it's lasting longer.

"The shortage is due to demand exceeding our ability to produce helium. Typically in the past, there's been enough helium in the distribution system that the end consumer never saw the problem. This has been an extended shortage, and all of the helium that's been in the supply chain has been expended," says Sam Burton, assistant field manager for the Bureau of Land Management, which operates a helium reserve in Amarillo, Texas, and produces 30% of the world's helium.

The shortage is the result of a complex interplay between commercial gas companies and the federal government.

Experts say the shortage has many causes. Because helium is a byproduct of natural gas extraction, a drop in natural gas prices has reduced the financial incentives for many overseas companies to produce helium. In addition, suppliers’ ability to meet the growing demand for helium has been strained by production problems around the world. Helium plants that are being built or are already operational in Qatar, Algeria, Wyoming and elsewhere have experienced a series of construction delays or maintenance troubles.

Heightening fears about the long-term supply of helium is the uncertainty surrounding the future of the federal reserve in Amarillo. Under a 1996 law aimed at privatizing the government’s helium program, Congress mandated that the Bureau of Land Management sell off nearly all of the reserve by 2015. Fulfilling that requirement would further strain the national helium supply, said industry experts, several of whom are urging Congress to adopt new legislation that would extend the sales.

“People are scrambling right now,” said Jonathan G. Erwin, vice president and general counsel of Wally’s Party Factory, a 32-store chain that had to start turning down donation requests for balloons. “Customers will show up as a walk-in on some day when we may not have enough, and you tell them there’s a helium crisis or a shortage, and they haven’t heard of it first of all, and second of all, they probably think you’re just making something up.”

The U.S. Senate is considering a bill called the Helium Stewardship Act of 2012. It would extend the 2015 deadline for the sell-off of the Federal Helium Program and allow the federal government to continue supplying world markets with helium, selling it at market prices instead of government-set prices. Walter Nelson, director of helium sourcing for Air Products and Chemicals, Inc., testified on behalf of the bill, saying that if it’s not passed, the funding mechanism for the BLM’s helium operations will expire, leaving researchers and MRI manufacturers in the cold by the end of next year. But Congress has taken no action on the bill since its introduction in April.