Helium shortage sends balloon prices sky-high
- Published on 06/14/2012 - 10:55 am
- Written by Ben Keller
Imagine a birthday party with no balloons. Or a hospital with no MRI scanners. Or telescopes that produce nothing but distorted images.
All of these are potential realities as the global supply of helium dwindles. A by-product of natural gas extraction, mostly in the giant oil and gas fields of the American Southwest, experts say the world could run out of the non-renewable gas in as little as 30 years.
And as the precious substance slowly floats away, prices are expected to increase for all users in response to 16-year-old legislation requiring the federal government to sell off its reserves to commercial suppliers by 2015.
Recently, the Bureau of Land Management, which oversees the nation’s underground helium reserves near Amarillo, Tex, revised its methodology for calculating the price of crude helium to reflect fair market values and more quickly recoup its cost for storing the nearly one billion cubic meter supply. The move is also expected to encourage greater industry conservation.
As a result, federal crude helium will be sold at $84 per thousand cubic feet (Mcf) in 2013, up from $75.75 Mcf in 2012 and around $65 in 2010.
This comes as little surprise to many who deal regularly with helium and have seen the price rise steadily every year since around 2005.
Cathy Lopez, owner of Balloon Décor of Central California in Fresno, said the price she pays went up 20 percent last November and she couldn’t get the smaller tanks she uses.
“It’s the highest I’ve seen since I started,” said Lopez, who launched her Fresno business in 1994 creating balloon sculptures for birthday parties, weddings and other celebrations. “It’s probably almost tripled in price.”
Instead of passing on those prices to her customers, Lopez says she has changed up her game by doing more balloon sculptures on frames and columns and using less helium than in the past.
“Customers seem to be fine with it,” said Lopez, who does around 25 events a month. “You can’t raise your prices where they’re not going to buy. You’ll price yourself out of the market.”
Margie’s Hallmark on Kings Canyon Avenue in Fresno has also stuck with the same prices over the last few years despite the climbing cost of helium. Owner Milt Pearce said he had to begin charging $3.99 for a Mylar balloon a few years ago after sticking with $2.99 for quite a while.
“We figure helium costs about as much as the balloon does,” Pearce said. “Prices kept going up for a long time but it’s kind of leveled off lately.”
Pearce said he recently switched to Fresno gas supplier Weco Welding Supply for his helium after using Praxair, one of the largest industrial gas companies in North America, since opening 25 years ago.
By picking up the gas himself, he now saves on delivery charges and enjoys a lower rate through Weco. At $117 for a single tank holding 200 cubic feet of helium, Pearce said he can fill up anywhere from 300 to 400 balloons.
He admitted that sales haven’t been what they once were when Fresno was home to several shops specializing in balloons, while a new Save Mart opening up near the Hallmark around four years ago didn’t help matters.
“In the last month they seemed to have picked up again over the last few years,” said Pearce, pointing to several graduation-themed balloons lining the shop’s front wall. “It’s nowhere near where it was years ago, but it still brings them in.”
Many local drugstores and grocery stores fill their balloons with helium from Airgas, the largest distributor of industrial, medical and specialty gases in the country. The company holds 25 percent of the U.S. market in packaged gases and welding hardgoods, while local independent suppliers like Weco claim around 50 percent of the market combined.
Helium is used in a wide variety of applications. Thanks to its low boiling point and thermal conductivity, it’s well suited to cool the superconducting magnets used in magnetic resonance imaging (MRI) scanners. It’s also used as a shield gas to ward off corrosive gases like nitrogen and oxygen in arc welding and as a leak detector in high-pressure or vacuum tanks.