Consumers feel helium squeeze

CHICAGO — Helium is the talk of the party-balloon industry these days, and it is not a discussion being carried out in high-pitched giggles.

The second most plentiful element in the universe (after hydrogen) is suddenly in short supply on this planet, and that means soaring prices for a lot of things, balloons included. "Some customers have told me they're just not going to sell balloons anymore because they can't get helium," said Chicago party wholesaler Lee Brody. "Everybody's scrambling."

As raw-materials crises go, the helium shortage takes a back seat to the global oil crunch. But the repercussions go beyond the cost of decorating birthdays or bar mitzvahs, while shining a light on an obscure federal helium program that has proved critical to feeding the world's growing appetite.

To most of us, helium is a novelty gas that floats blimps, bobs huge latex whales over car dealers and makes your voice sound like Daffy Duck when inhaled (which, by the way, experts say is a really bad idea that could lead to a collapsed lung).

But demand for the gas has taken off in industry and scientific research in recent years, and the helium squeeze is being felt everywhere from university physics laboratories to plants in India, China, Taiwan and Korea that make today's hottest consumer products. Japanese helium suppliers recently warned customers in the electronics industry to prepare for supply cuts of up to 30 percent.

Helium is less dense than air, which explains why it makes balloons rise and voices squeak. Sound waves travel faster through it.

It is also noncombustible and can be liquified to temperatures approaching absolute zero, properties that render it ideal for cooling metals that produce superconductivity or in processes that throw off a lot of heat. It is used to make flat-panel TVs, semiconductors, optical fibers and magnetic resonance imaging machines, and it toughens industrial welds. NASA uses a train-car load to pressurize a liquid fuel rocket.

The U.S. government is the world's No. 1 source, sucking helium out of a Texas reservoir it began filling after World War I, when dirigibles were thought to be the coming thing in transportation and warfare.

That stockpile will be empty in a decade, and new overseas sources have been slow to develop. "We're pedaling as fast as we can here, but we just can't produce enough," said Leslie Theiss, manager of the Federal Helium Reserve near Amarillo. "One-third of the world's helium comes from our little place here. That's kind of frightening."

In today's increasingly interdependent global marketplace, the balloon business is at the bottom of the helium supply chain. What began as spot shortages last year have grown chronic this year, said Kaufman, president of the International Balloon Association, a party-industry trade group.

Kaufman is also co-owner of M.K. Brody, a Chicago party wholesaler, which often goes through 100 cylinders of helium a week. The firm's distributor recently put it on a weekly allotment of 33 cylinders.

A standard tank with enough helium to blow up 400 average-size balloons cost $40 five years ago but $88 today, Kaufman said, and he's been told to expect a 50 percent price increase before Christmas.

Cindi Cronin, who runs a Chicago party-decor business, said that to stretch her supplies and save money, she dilutes the helium in balloon decorations with 40 percent air. "They still float, but not as long," she said.

By a quirk of geology, some U.S. natural-gas fields are blessed with robust helium concentrations, making the United States to helium production what Saudi Arabia is to oil.

Some of the richest sources of helium are in the Texas Panhandle, and that is where the federal government began stockpiling the gas in 1925, long before the rest of the world took much notice.

The Texas reservoir is in a geologic structure called the Bush Dome, which is not named for the president's family. The dome lies beneath the site of a ranch once owned by William Henry Bush, a 19th-century Chicago haberdasher whose father-in-law held the patent on a new fencing product called barbed wire. Bush was sent to the rangeland around Amarillo to test it.

The Federal Helium Reserve is the federally owned crude helium that resides in the Bush Dome reservoir. The Cliffside Field facility includes the storage facility on the Bush Dome reservoir and the associated buildings and pipeline.

In the 1990s, Congress decided the government should get out of the helium business. Federal law requires the stockpile to be completely sold in about 10 years.

But private industry has been slow to pick up the slack. New production facilities in the Middle East have been plagued with problems and not produced hoped-for yields.

Theiss fears the day of reckoning for world helium supplies may be coming faster than for oil.

"To our knowledge, nothing has been discovered to date that has the reserves we have here," she said. "Exports have increased 50 percent in the last five years. If you've got a finite amount and a lot more suddenly starts going overseas, do the math. It's not going to be good when we're done here."

Material from the National Academies Press is included in this report.