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    The Global Helium Crisis Is About To Get A Lot Worse

    Written by

    Grace Wyler

    Contributor

    The second-lightest element in the universe, helium is a relative rarity on earth, and supplies are running low. Image: Wikimedia

    It may be the second-most abundant element in the universe, but here on Earth, helium has been running in short supply. Balloon sales have dropped about 20 percent over the past two years, and party supply stores are turning away customers because they don’t have enough helium in their tanks. And the crisis is about to get a whole lot worse, if Congress doesn’t act soon to avoid a planned shutdown of the federal helium supply.

    After years of warnings about the rising demand for helium, Congress has just 10 legislative days left before the nation goes off the so-called “helium cliff” on October 1, when federal law requires the government to shut off access to the Federal Helium Reserve, which provides nearly half of the helium in the United States and a third of the helium worldwide. Helium users are starting to panic, warning that an abrupt shutdown will send the entire helium market into chaos, causing prices to skyrocket and exacerbating shortages that have been disrupting the global helium supply since 2011.

    It’s not just party suppliers who are worried. Helium is the essential component for an amazing range of serious industries, including aerospace, defense, high-tech electronics manufacturing, medical imaging—not to mention welding, commercial diving, and quantum mechanics research. Helium is used to test rocket engines, heat-treat aircraft landing gear parts, make flat-screen TVs, cool nuclear reactors, produce semiconductors and fiber-optic cables, fill weather balloons, and operate MRI machines. And in most of these cases, there is no known substitute for the noble gas, which has the lowest melting and boiling point of any element, and is relatively scarce on earth.  

    Industry giants like Intel, Samsung, General Electric, and Seimens, as well as trade associations for the semiconductor, IT, and medical imaging industries, have been lobbying Congress hard to extend the life of the helium reserve. Now that it’s down to the wire, they are making apocalyptic predictions about the consequences a shutdown could have, not only for helium users, but for the U.S. economy at large.

    "In the semiconductor industry, there is no true substitute for helium,” a Samsung spokesperson said in a statement to Motherboard. “A disruption in the global helium supply to industrial users would threaten jobs at our manufacturing facility, our investment in the U.S. market, and ultimately could lead to higher prices for consumers for smartphones and tablets. Any shortage of supply would also threaten growth of the U.S. semiconductor industry in the long term.”

    The situation would be even worse for the medical imaging sector. About 40 million MRI exams are conducted in the U.S. each year, and the scanners, which must be constantly cooled by liquid helium, account for about 20 percent of helium usage worldwide. The MRI field is already suffering from the current helium shortages, with most machines running at 60 or 70 percent helium capacity, according to Brian Connell, director of government relations at the Medical Imaging & Technology Alliance, an industry lobbying group. Further tightening of the helium supply could actually put some machines at risk for permanent damage.

    “At the very least, it would be a very costly problem to replace the magnets,” Connell said. “At the worst, you have to replace the entire machine, which costs even more money, and is a very long and extensive process.”

    Clowns have had to get really good at face-painting. Image: Flickr.

    How we got to this point is a lesson in both the benefit and pitfalls of government intervention in the natural resource market. Back in the 1920s, when blimps were the weapons of the future, the U.S. government decided to set up a national helium program, and until 1960, the feds were the only domestic supplier of helium. In the 1960s, in response to a dramatic increase in demand, Congress set up the Federal Helium Reserve, a massive helium stockpile stored in the 11,000-acre Bush Dome, a porous brown geological formation that stretches from Texas to Oklahoma and Kansas. The reserve is one of the only areas conducive to helium storage in the world, and the natural gas that surrounds the field is particularly rich in helium, which is relatively rare.

    But by the mid-1990s, the Federal Helium Reserve had stockpiled way more helium than the government was using and incurred about $1.3 billion in debt. So Congress decided to get out of helium business altogether, and passed the Helium Privatization Act of 1996, which required the reserve to start selling its helium and pay off its debt by the end of 2014.

    At the time, the idea was that the private market would step in to fill the government’s role in supplying crude helium. So far, that hasn’t happened. The 1996 law screwed with the economics of the helium market by setting a minimum price for the government’s helium. At the time, that price was about double the market rate for helium, but because the U.S. was such a dominant supplier, the government price inevitably became the market price. Due to the skyrocketing demand for helium over the past decade, that price is now about half of what helium would probably cost in an open market.

    In the meantime, the Federal Helium Reserve has paid off its loan faster than Congress anticipated, and is set to close up its tab at the end of the fiscal year, on September 30. Due to an odd technicality in the 1996 law, the fund that pays for the national helium program is set to terminate once that debt is paid. That means that if Congress doesn’t act, the Federal Helium Reserve has until October 7 to shut down operations, which will effectively cut off access to the roughly 370 billion liters of helium still left in the stockpile.

    Donna Hummell, a spokeswoman for the Bureau of Land Management, which oversees the Federal Helium Reserve, confirmed that the agency is preparing to start shutting down operations on October 1.

    “That is to give Congress the maximum amount of time to provide some kind of reauthorization of the program,” Hummel told Motherboard. “Congress has a lot on their plate, and it’s not clear whether they can pass something [by the deadline]...That uncertainty requires us to do a lot of contingency planning, from the orderly shutdown to working empathetically with our employees, to keeping the refiners along the helium pipeline informed.”

    “I don't think anyone anticipated where we are right now,” she added. “It was Congress' intent to get the federal government out of the storage and sale of crude helium ... But private infrastructure is not where it needs to be to have a seamless transition.”

    The government's Crude Helium Enrichment Unit near Amarillo, Texas, supplies 42 percent of the helium used in the U.S. Image: BLM

    Like most crises in Washington these days, the helium cliff problem is of Congress’ own making: Lawmakers have known about the cliff since at least 2011. What makes this crisis even more absurd is that nearly everyone agrees that something should be done to extend the reserve. In a rare moment of bipartisan panic last spring, the House of Representatives passed a bill that would avert the helium cliff, and the Senate Energy Committee unanimously passed their own version in June. But for whatever reason—distraction, obstruction, general lack of urgency—the bill hasn’t advanced to the full Senate yet.

    “We’ve been working on getting it done,” Senate Energy Committee press secretary Keith Chu told Motherboard. “We're well aware of the deadline. Our staff has had conversations with many other offices, as well as with folks in the House, and we're pretty confident that we can get this passed by the end of the month.”

    As of Friday, however, the Senate had not yet scheduled a vote. And with the clock ticking, panic is starting to set in.

    “If you follow Congress these days, there are no guarantees,” said David Isaacs, vice president for government affairs at the Semiconductor Industry Association. “We're down to the wire, and we're a lot closer than we should be.”

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