Helium shortage sends balloon prices up

SPRINGFIELD, Mo -- Birthday parties beware! If you are hoping for floating balloons in the near future, it's going to cost you. Even worse, you may not be able to get them at all.

The reason is a shortage in helium.   

From your local florist to the Macy's Day parade, balloons bring a smile to the faces of many.

"There's rumors going around," said Florarama Manager Rcena Denney. "You don't know what to believe. There may be no helium tomorrow; there may be no helium next year. You just don't know."

But what goes into those balloons is in short supply.

Flowerama used to be able to get large tanks that could fill up hundreds of balloons, but their supplier cut them off around Mother's Day of 2012. Now, they are left to getting smaller tanks that can fill up about 25 balloons.

The reason for the shortage is that demand is outpacing supply.

"It's affected our balloon prices. Our balloons are almost twice what they were in price," said Denney. 

Helium is a byproduct of natural gas extraction.  It isn't just for fun.  It has scientific purposes as a cooling agent and is used in the medical field for MRI machines.

"We took second priority. We weren't as important as welding and hospitals and things like that," Denney explained.
 
Right now, there aren't enough people mining for helium.

"You take it for granted," Denney said, "you don't realize it's a natural resource, that it's exhaustible."

Experts argue whether or not the situation is going to get better or worse.

"You just take it one day at a time," Denney said, "stay creative and stay hopeful and just figure it out."

According to the Christian Science Monitor, "the supply-demand imbalance isn't coming from market forces, it's a public-private vacuum. The federal government is getting out of the business after more than eight decades, and so far private industry hasn't stepped in to fill the void."

From the Bureau of Land Management: Helium was pretty much unknown before the twentieth century.  It was first discovered in natural gas in 1903 when an exploratory well in Kansas produced a gas that "refused" to burn. The only economical source of helium is from natural gas, and some of the richest sources are under the Panhandle of Texas.

BLM's Crude Helium Enrichment Facility near Amarillo, Texas. The facility provides crude helium to refiners that supply about about 40% of U.S. helium production.
 
A federal helium program was created in 1925 to ensure that the gas would be available to the government for defense needs. Over time, it evolved into a program to supply the government with refined helium for research and aerospace uses.

By the 1990s, the demand for helium by the private sector was ballooning and far surpassed government needs.  Congress decided that the feds didn’t need to be in the business of supplying refined helium to U.S. users. 

The Helium Privatization Act of 1996 redefined the program’s mission as operating a crude helium storage reservoir and pipeline system, and providing crude helium (enriched to about 80 percent helium) to private refiners.