Hopes lifted by Senate vote to keep federal helium reserve afloat

Party supply stores and the semi-conductor industry hope the government can deflate rising helium prices

Fear of reserve shutdown has inflated prices of helium balloons.
Rodger Bosch/AFP/Getty

The U.S. government is set to keep hold of its helium reserve for a bit longer, a move that will surely keep the tech, medical and party supply industries' spirits afloat.

The Senate on Thursday voted 97-2 in favor of a measure that would prevent an abrupt shutdown of the Federal Helium Program, a reserve in Amarillo, Texas, which provides 42 percent of the gas to the United States and 35 percent worldwide. If passed by the House of Representatives and President Barack Obama, the bill will allow for a more gradual transition of the reserve from government control to the private sector.

Under a law passed in 1996 called the Helium Privatization Act, the government agreed to operate the Amarillo reserve until the reserve paid off more than $1 billion debt to federal agencies. The act states that once the debt is paid off, which is expected later this month and two years earlier than planned, the helium reserve would be terminated and immediately handed to private sector.

But Donna Hummel, chief communications officer of Bureau of Land Management (BLM), which operates the Amarillo reserve for the government under the Department of the Interior told Al Jazeera that private companies are not yet equipped to it take over. "Because natural gas is relatively cheap, private companies haven’t invested in preparing themselves" for the helium project.

Helium gas, a non-renewable resource, is the second most abundant element in the observable universe, but it is difficult to capture and store. Most often, helium is recovered from natural gas deposits, but once it is released into the atmosphere it's all but impossible to re-capture.

Although most commonly associated with making balloons float and voices high-pitched, the gas is used in a variety of industries. Companies including Siemens, Philips, Samsung and General Electric wrote to Congress last week urging it to keep the reservoir open or risk putting millions of U.S. jobs at risk. It is used for MRI magnet cooling, lung tissue visualization and heart catheterization methods in medical technology industries; and rocket engine testing, scientific balloons and blimps in the defense industries.

Helium is also vital in semiconductor production. "The sectors that rely on helium spur innovation, boost economic growth and employ millions of people," chairman of Semiconductor Industry Association Ajit Manocha said in a statement. "By enacting legislation to secure the supply of helium, Congress can also help secure America’s economic strength and global technology leadership."

Even though less than 10 percent of helium consumption is used for party industries, the shutdown scare has also had an immediate effect on helium balloon prices.

Shant Celikian, vice president of Joker Party Supply in Los Angeles, says his shop used to charge "25 cents to fill one latex balloon. Now we charge one dollar."

"If it continues this way, the price can double what it is, and I don't know if people will pay $2 for a helium balloon," Celikian told Al Jazeera.

It is not just the price that concerns party supply stores. Celikian said helium distributors are only allocating a fraction of his orders in preparation of a possible shutdown of the Amarillo reserve.

"They told us they're only going to allocate 40 percent of what we ordered last year. We're running out of helium every two days."

The government has not only earned a profit and paid off more than $1 billion in debt with the Federal Helium Program, but also receives refined helium for various projects at a discounted rate.

"The government sells crude helium to private companies that refine the helium. In return, the companies give the government refined helium at a rate lower than the industry price," Hummel said.

This year, the government paid about 20 percent less in helium than the market, according to BLM. Government programs that use helium include NASA, Department of Defense and U.S. Air Force Academy.

Avoiding shutdown of the Amarillo reserve also benefits the private sector. In anticipation of an immediate shortage of helium, the price of the gas has jumped to over $20 a liter from $8 last year.

A sudden shutdown would spike the price even higher because the reserve supplies more than one-third of the nation’s and world’s helium.

Moses Chan, physics professor at Penn State University, says that even though his department heavily relies on helium for scientific research, an increase in the price has a silver lining.

"Raising the price of helium does something good, because it will make people conserve it more," Chen told Al Jazeera. "If you keep the price so low, the world will run out of helium in 20 to 30 years."

Certainly to deal with ballooning helium prices, the party supply industry has learned to innovate. At the Joker Party Supply, Celikian said, "One thing we've done was attach long sticks to air balloons to make it look like they’re floating."

"But," he added, "nothing can replace helium."

With wire services

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