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Policy / ECONOMY

Helium Shortage Has Balloon Sales Dropping

Republican vice presidential nominee Paul Ryan and presidential nominee Mitt Romney soak it in as the balloons begin to fall during the Republican National Convention in Tampa on Thursday.((AP Photo/J. Scott Applewhite))

August 31, 2012

Balloons are in the public eye in a big way during the political season, starting with the thousands of red, white, and blue orbs that rained down on the Republican National Convention after presidential nominee Mitt Romney’s acceptance speech on Thursday.

But little known to the millions of convention viewers, the balloon industry is in a down cycle these days due to a shortage of the gas that makes balloons go up, helium.

Gift shops around the country are unable to get enough helium to fill the usual array of balloons featuring Dora the Explorer, Spider-Man, and greetings ranging from “Happy Birthday!” to “You’re the Greatest!” And the University of Nebraska football program has decided to cut back on the tradition of releasing hundreds of red balloons after every touchdown this fall so there won’t be a shortage of balloons for kids in hospitals.

 

Burton and Burton, a Georgia-based balloon supplier, has seen a 20 percent decrease in balloon sales, said Steve Casso, the company’s general manager. “We tell [balloon retailers], don’t walk away from the balloon business,” he said. “As we get through this shortage and the allocation, make sure that you continue to offer some sort of balloon product to your customers.”

Burton and Burton provides training to their clients, including tips such as making an air-filled balloon more appealing to customers by attaching a stick to keep it up.

The helium crunch has a serious side, too: Hospital radiology departments use liquid helium to cool magnets in equipment such as an MRI scanner, the magnet of which begins to melt if there’s no liquid helium to cool it.

Dr. William Bradley, chairman of the University of California (San Diego) radiology department, said the 10 UC campuses learned this summer that their monthly allotment of helium for research was being cut by 20 percent. Bradley said that as helium prices increase, patients could find MRI tests more expensive. He worries that outpatient imaging centers won’t be able to continue operating, which in turn could make it more difficult to obtain an MRI in rural locations. “We could be facing a very serious situation here,” he said.

The company Airgas supplies about 22 percent of the helium delivered to U.S. companies, but its suppliers have cut back. Spokesman Doug Sherman said Airgas has had to turn away customers who had no contract. For those with a contract, some of them will learn that they are only getting 99 percent of their order filled. “Believe me, if we could get helium, we would get it and sell it,” he said.

Helium is the second most abundant element in the universe, so why the shortage? The finger of blame is pointed in several directions. According to the British newspaper Daily Mail, helium-plant shutdowns in Algeria, Poland, and Australia have put a crimp on global supply this year. And in Texas, which has one of the largest geological deposits of helium-rich natural gas in a region around Amarillo, a pipeline that carries about 30 percent of the global supply of helium was closed for maintenance in July.

But a favorite target of blame for the shortage is the Federal Helium Reserve.

Few know of the underground facility 20 miles north of Amarillo, which houses the world’s largest reserve of helium. About 13 billion cubic feet of helium is stored in the reserve, according to Joe Peterson, assistant sales manager for helium resources.

The facility dates back to the 1920s, when the government assumed control of all U.S. production of helium to meet the needs of the military for observation balloons and airships. Private companies, including Phillips Petroleum, got into the helium-extraction business later, but the federal Bureau of Land Management still sells an annual allotment from the reserve stocked from a government-run helium plant near Amarillo.

Under the 1996 Helium Privatization Act, the government reserve is allowed to sell only a specific allotted amount of helium annually to private companies. The law expires in 2015, but the Senate Energy and Natural Resources Committee is considering legislation that would continue the sales beyond 2015. Critics say the low government sale price is discouraging private companies from investing in helium extraction. So when events occur like the Texas pipeline shutdown and overseas plant closures, a helium shortage emerges.

Meanwhile, outside Chicago, Anthony Cook—otherwise known as “Anthony the Balloon Guy”—is trying to get by with air-filled balloons attached to PVC pipes for his party displays. Cook says the price of a 242-cubic-foot tank of helium has increased to $205 from $150 a year ago.

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