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Helium Shortage
Helium supply for many in our industry has been rationed and for some, cut off altogether. Helium prices are rising too, reflecting the short supply. Are we running out of helium?
 The short answer is no, we are not running out of helium. But because helium demand worldwide is equal to supply, anytime a plant goes down for maintenance and/or production is lowered, a shortage results. The Bureau of Land Management (BLM), who currently supplies 30% of the world's helium, down from 70% in 2008, has helium stores for the next 10-15 years.
So why is there a shortage in the US?
As was the case last winter, when plants in Russia and Algeria went down for several months, domestic suppliers shifted capacity to fulfill demand overseas. The six helium refining facilities that are linked to the BLM Pipeline and Storage System then upped their demand on the pipeline which caused a strain on an aging Crude Helium Enrichment Unit (CHEU). Planned and unplanned shutdowns for maintenance on the CHEU coupled with high demand from the six helium refiners who were seeking to compensate for foreign outages forced the BLM to allocate.The BLM has plenty of helium but can only put out so much on the pipeline. Matters only got worse when ExxonMobile, responsible for 20% of all global helium sources, had a three-week planned maintenance shutdown in August. History of the Federal Helium Program.
What is the outlook?
According to Joe Peterson, an official at BLM's helium office, the BLM is operating back up to capacity. However, the ripple effect of reduced supply has not quite caught up with steady demand and we can expect that suppliers will continue to allocate product giving the balloon industry lower priority over the medical industry. The BLM also has plans for a two week shutdown in April 2012 for maintenance which will affect supply to some degree again.
The bottom line in terms of helium supply at the BLM is that there is very little excess helium refining capacity, and domestic supplies of crude helium are growing ever tighter. Until overseas plants are fully online and/or additional plants are built, we're potentially facing additional supply disruptions and shortages.
What about these new sources?
Cryogas International reported in their October 2011 World Helium Market Report that new sources and expansions to helium production/capacity have come onstream or are planned in Darwin, Australia, Big Piney, WY, in the US, and in the Middle East/Africa during the next three years. These sources should be sufficient to supply world demand however consensus is that helium prices will be higher than what users are accustomed to paying due to the investment required to build a helium extraction/refining plant. The good news is that due to its unique properties, helium cannot be substituted and the demand for helium will continue to grow. The value of helium will increase and justify these new projects to extract more helium with hopes that they will find creative ways to store excess production (like Amarillo), thereby stabilizing prices and returning value back to these investors.
What to Do?
In the meantime, resourceful event planners/decorators are building lots of air-filled decor into their quotes and utilizing 60/40 inflation devices to make their helium stretch farther. Independent balloon stores and florists are letting their "fingers do the walking" to find alternative sources for helium. Party stores and grocery chains are meeting their needs by contracting with multiple sources as well. Allocations will continue into 2013 but helium supply is still out there, we just have to work harder to get it. We may also have to adjust our retail pricing a few cents per balloon to accommodate the higher helium prices.
Final Note
If there's a silver lining to this problem for the balloon industry it's this:
If you ask any average citizen what helium is used for the typical answer will be, "balloons". Not MRI's, the space program, or industrial welding. Because of this, it is imperative that we band together as an industry and leverage our numbers to lobby for continued supply of helium. Please join the IBA in an effort to create one very loud voice for our industry!
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