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Buying that party balloon may not seem like a big deal — until you realize you may be contributing to the helium shortage by doing it.

And while a shortage of helium to fill party balloons may not seem earth shattering — except to companies like Party City, which filed for Chapter 11 bankruptcy partly due to helium’s ballooning costs — lacking the helium needed to do things like run MRI scanners presents a much bigger concern.

Let’s dig into the dynamics of helium a bit — including what’s happening with the Federal Helium Reserve near Amarillo, Texas.

A Helium Snapshot

In March, Statista published a brief overview of “Global helium production 2022, by country” that provides a nice snapshot of the current state of helium.

Details include:

  • Helium is “one of the six naturally occurring noble gases” and is “an odorless, colorless, tasteless monoatomic gas that presents a very low chemical reactivity.”

  • The U.S. is the “largest helium producer worldwide.”

  • In 2022, domestic production of helium equaled “approximately 75 million cubic meters, taking into account helium extracted from natural gas and helium production from the Cliffside gas field in Texas.”

  • In 2022, “global sales of helium produced in the United States amounted to 75 million cubic meters, whereas domestic helium consumption reached 43 million cubic meters.”

  • The U.S. also possess the “most extensive helium reserves worldwide. As of 2022, the country’s helium reserves amounted to more than 8.5 billion cubic meters, surpassing the reserves of runners-up Algeria and Russia combined.”

  • The healthcare sector is the major consumer of helium (32% share of global helium consumption as of 2021), using it “mostly as a cooling gas in magnetic resonance imaging (MRI) and nuclear magnetic resonance (NMR) spectrometers.”

  • Helium is also “widely used in semiconductor and fiber optic cable manufacturing…”

The Helium Shortage 4.0

The current shortage isn’t helium’s first rodeo for being in short supply. In a recent article for Assembly Magazine, writer Austin Weber notes there have been four helium shortages since 2006.

“There’s a lot of frustration among helium users today, because this is ’helium shortage 4.0,’” Phil Kornbluth, president of Kornbluth Helium Consulting reportedly said. “Prices have gone up quite dramatically over the last 16 months, and they’re at levels we haven’t seen before.”

“Since January 2022, there’s been a worldwide shortage of helium,” Weber writes. “The war in Ukraine has cut off supply of helium from Russia, a leading exporter of the gas. Four of the world’s five largest major helium suppliers were forced to ration the gas for their customers, including manufacturers that rely on it to check for leaks in appliances, auto parts, medical devices and other products.”

He notes that as an inert gas, helium is popular for many different types of applications — including a “variety of analytical, cryogenic, heat transfer, lifting, leak detection and shielding applications.”

“The largest industrial users of helium are hospitals, where the extremely low temperature of liquid helium is used to maintain the superconducting properties of magnets in MRI equipment,” Weber says. “It’s also used as a coolant to transfer heat effectively, thanks to its high thermal conductivity, in the fiber optics and electronics industries.”

Noting that those types of applications account for about 40 percent of the helium market, he said party balloons are responsible for 15 percent of helium’s use and leak testing only about five percent.

The Federal Helium Reserve

In light of the helium shortage, it’s ironic that the U.S. is “home to the largest helium deposits in the world,” Weber says, noting that the U.S. Bureau of Land Management (BLM) “operates a federal stockpile near Amarillo, TX, and a pipeline system that delivers crude helium feed gas to four privately owned plants in Kansas and Oklahoma.”

What Weber is referring to is the Federal Helium System, which the BLM says is comprised of:

  • Federal Helium Reserve,

  • Cliffside Field,

  • Federal Helium Pipeline, and

  • All other infrastructure owned, leased, or managed under contract by the Secretary of the Interior for the storage, transportation, withdrawal, enrichment, purification, or management of helium.

In a May 8 post, writer Mihai Andrei describes how difficult it is to store helium and says the “best bet” for doing so is to “turn to geology.”

“At the Federal Reserve in Amarillo, helium is compressed at the surface and injected into a layer of dolomite rock, 3,000 feet (914 meters),” Andrei writes. “Above these dolomite locks, there lies a layer of halite (salt) that traps the helium in place. This is the best process we have available at this moment to store helium, and as you can imagine, it’s expensive and time-consuming.”

In light of the fact that helium has periodically been in short supply, it may seem a bit confusing that the federal government has been in the process of selling off the supply at the Federal Helium Reserve for a number of years.

Getting out of the helium business

It all started in 1996, when Congress implemented a 25-year plan to get out of the helium business.

Dubbed the Helium Privatization Act of 1996, it provided various directives to the Secretary of the Interior about how the helium in the Reserve should be handled — including a requirement to “…make crude helium sales in amounts that will cause minimum market disruption. …” and an instruction to “to eliminate helium stockpiles by a prescribed deadline.”

Seventeen years later, another helium-related bill updated guidance about the Federal Helium Reserve.

The summary of the Helium Stewardship Act of 2013 says it “Amends the Helium Act…” and includes numerous directives to the Secretary of the Interior — including many related to the phasing out the Reserve’s helium supply and eventual sale of the entire system.

“Requires a Phase D for disposal of assets, beginning not earlier than two years after the commencement of Phase C, and ending September 30, 2021, during which the Secretary shall designate as excess property and dispose of all facilities, equipment, and other real and personal property held by the United States in the Federal Helium System,” one directive states.

There were also two directives related to the BLM and the U.S. Geological Survey (USGS):

  • “Directs the Secretary, acting through the Bureau of Land Management (BLM), to make specified information available on the Internet relating to the Federal Helium System, including an open market and in-kind price. Requires the BLM Director to establish a timely and public reporting process to provide data affecting the helium industry.”

  • “Directs the Secretary, acting through the Director of the U.S. Geological Survey (USGS), to: (1) undertake a national helium gas resource assessment; and (2) submit to certain congressional committees assessments of global and domestic demand for helium, including an inventory of diverse uses of helium.”

For Sale: The Federal Helium System

Some have been hoping that a recent request from the USGS for public comments about the state of the helium supply may be a sign up hope that the government could potentially maintain control — as national field producer Mary Pflum noted in a February NBC News article.

“For the better part of a decade, scientists…have urged government officials to hold on to the reserve, instead of selling it to a private entity — likely a major industrial gas or pipeline company, and possibly one that is foreign-owned,” Pflum writes.

She notes that a January notice posted to the Federal Register by the USGS seeking public comments about the state of the helium supply may be a sign of hope that the government could potentially maintain control.

However, a June 2022 news release from the U.S. General Services Administration (GSA) indicates that likely, that won’t be the case.

“GSA Announces Sale of Federal Helium System Assets,” the headline reads.

“Today, the General Services Administration (GSA) announced the upcoming sale of the Federal Helium System assets, currently managed by the Bureau of Land Management (BLM), as directed by Congress under the Helium Stewardship Act of 2013,” the statement says. “In accordance with that law, BLM is required to sunset its management of the system and report any excess helium and helium assets to GSA to follow the statutory disposal process.”

According to the GSA, “The sale process, planned to start July 12, 2023, will include the Cliffside Gas Plant, Federally owned Plant Equipment, Mineral Rights, Helium Storage Reservoir, Natural Gas Wells, and Federal Helium Pipeline. GSA expects the sales process will take between 8 and 9 months, and will engage with industry and stakeholders throughout to ensure an orderly and efficient transfer of assets. …”

Detailed information about the sale, including bidding procedures and asset specifications, are available on the GSA website, which sets November 15, 2023 as the sealed bid opening date.


Please join us again next week, when we’ll dig into current efforts to ensure an adequate domestic helium supply.

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