Bad news: The Federal Helium Program is not a parody

posted at 2:41 pm on April 26, 2013 by Mary Katharine Ham

I can’t even anymore.

Please read the Washington Post explain, with one program, every single thing that is wrong with putting the federal government in charge of things. A program that doesn’t now, and probably never, accomplished its initial goal? Check. An expenditure that should have been deemed unnecessary circa 1930 but has nonetheless stuck around beyond the lifespan of most of the Greatest Generation? Check. A function that never had any business being under the purview of the federal government instead of the private sector? Check. A program that has risen, zombie-style from its grave every time someone tries to kill it? Check. A service that crowded out private sector replacements with below-market rates subsidized by taxpayers and then justified its continued existence by complaining the private sector had not jumped to replace it at a loss? Check.

The Federal Helium Program. I could not write a more devastating, achingly elegant example of stupidity if I tried.

President Ronald Reagan tried to get rid of it. So did President Bill Clinton. This October, their wish is finally set to come true.

The Federal Helium Program — leftover from the age of zeppelins and an infamous symbol of Washington’s inability to cut what it no longer needs — will be terminated.

Unless it isn’t.

On Friday, in fact, the House is planning a vote to keep it alive.

“Many people don’t believe that the federal government should be in the helium business. And I would agree,” Rep. Doc Hastings (R-Wash.) said on the House floor Thursday.

But at that very moment, Hastings was urging his colleagues to keep the government in the helium business for a little while longer. “We must recognize the realities of our current situation,” he said.

You’re probably thinking, “Yeah, why is the federal government in the helium business?”

The program at the center of this debate has its origins after World War I, in a kind of arms race that sounds ridiculous now. In Europe, countries such as Germany were building sturdy, if slow, inflatable airships. The U.S. military was worried about a blimp gap.

So Congress ordered a stockpile of helium to help American dirigibles catch up. It was assumed to be a temporary arrangement.

“As soon as private companies produce [helium], the government will, perhaps, withdraw?” asked Rep. Don Colton (R-Utah.) in the House debate.

“That is correct,” said Rep. Fritz Lanham (D-Tex.).

That was 1925.

Today, 88 years later, the zeppelin threat is over. Private companies have learned to produce helium. But the U.S. government still has its own reserve: a giant porous rock formation under the Texas Panhandle, whose crannies hold enough helium to fill 33 billion party balloons.

The reserve sells off portions of its helium every year, accounting for about 42 percent of the U.S. supply of the unrefined gas. The program, with 52 employees, pays for itself with proceeds from the sales.

But since the 1980s, politicians have been saying this shouldn’t be the government’s job. Reagan said so in his 1988 budget. Clinton said so in his 1995 State of the Union speech.

Timely stuff. So, Congress has tried to kill it at least twice. The euthanization attempts were bipartisan, by Presidents Reagan and Clinton, and the program is now clinging to life after a 1996 bill required it to wind down after paying off “a more than $1 billion debt to other agencies.” (I love how even small federal agencies that allegedly “pay for [themselves] with proceeds from the sales” manage to rack up $1 billion debts.) Now it has paid that debt, but oh noes! The private sector has not stepped into the market to cover the 40 percent of helium provided by the federal government. Why might that be, pray tell?

Congress says private industry simply didn’t step up to supply more helium, in part because the federal government was selling its helium so cheaply. In industry, it’s said that there has been a spike in demand for helium, and that finding new supplies isn’t easy. That requires drilling in a certain kind of natural gas field, where helium comes up along with the gas.

Emphasis mine. Only the federal government could possibly pile up $1 billion in debt selling 40 percent of the market share of a valuable commodity that many people want and need. Only the federal government could survive selling said commodity under market value by subsidizing it with other people’s money and then scratch its head wondering why no one else had jumped into the game. “Why is no one playing this delightful game of Three Card Monty with us?”

Oh, but we have not yet gotten to the impassioned floor speeches on behalf of this travesty. Hold on tight, y’all. I know you’re determined, but like an overly confident bachelorette on her third appletini, you are in danger of getting bucked by the mechanical bull in this wild, wild rodeo of idiocy.

Imagine a world without balloons, people. Imagine a world in which Carrot Top cannot call upon this natural resource to reach the comedic heights to which we’ve become accustomed. A Congressman of these United States actually thinks we cannot possibly inflate balloons or make funny voices without the federal government, even though it is demonstrably bad at owning and operating the current reserves and the country has other helium sources. Call me crazy, but if the federal government exited the helium market tomorrow, I have a feeling the forces that have brought us Google Glass, the decadence of the baby wipe warmer, and the ability to stream “The Grinch Who Stole Christmas” literally any season of the year could figure out how to get this country’s Sponge Bob balloons flying high once again in a beautiful mylar pageant of Kroger-bought approbation.

But I’m an optimist. I close with Barney Frank, proving that there should be no ideology that can deny or defend the stupidity of this endeavor, with which we will no doubt continue indefinitely.

“If we cannot at this point dispense with the helium reserve — the purpose of which is no longer valid — then we cannot undo anything,” then-Rep. Barney Frank (D-Mass.) said back in 1996, when Congress thought it finally killed the program.

Sigh.

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You want a replacement for the programs?

Pull my finger!

pilamaye on April 26, 2013 at 2:46 PM

Today, 88 years later, the zeppelin threat is over. Private companies have learned to produce helium.

It’s too bad that we haven’t categorized the temperature of the helium, otherwise we might truly be talking about HotAir.

It’s also strange because of this:

In years past, there have been periodic shortages of helium — in 1958, the giant balloons in the Macy’s Thanksgiving Day Parade were filled with air instead of helium and hoisted onto trucks — but physicists, industry experts and federal officials said that this year’s shortage had been one of the worst, for its duration and scale.

“People are scrambling right now,” said Jonathan G. Erwin, vice president and general counsel of Wally’s Party Factory, a 32-store chain that had to start turning down donation requests for balloons. “Customers will show up as a walk-in on some day when we may not have enough, and you tell them there’s a helium crisis or a shortage, and they haven’t heard of it first of all, and second of all, they probably think you’re just making something up.”

The shortage is the result of a complex interplay between commercial gas companies and the federal government, which maintains an underground helium reserve northwest of downtown Amarillo that produces roughly 30 percent of the world’s helium.

Experts say the shortage has many causes. Because helium is a byproduct of natural gas extraction, a drop in natural gas prices has reduced the financial incentives for many overseas companies to produce helium. In addition, suppliers’ ability to meet the growing demand for helium has been strained by production problems around the world. Helium plants that are being built or are already operational in Qatar, Algeria, Wyoming and elsewhere have experienced a series of construction delays or maintenance troubles.

“The shortage is due to demand exceeding our ability to produce helium,” said Sam Burton, assistant field manager for helium operations for the federal Bureau of Land Management, which operates the reserve in Amarillo. “Typically in the past, there’s been enough helium in the distribution system that the end consumer never saw the problem. This has been an extended shortage, and all of the helium that’s been in the supply chain has been expended.”

So do we risk a shortage, or is this truly a waste of Federal resources?

Stoic Patriot on April 26, 2013 at 2:49 PM

And folks think getting rid of Obamacare is gonna be easy.

But, helium, balloons…it’s for the children.

Gotta push more money into it.

Hate to admit it, but I agree with Barney Frank…if we can’t even end the federal helium reserve…we can’t get rid of anything.

Sniffin’ helium will change your hair color…

coldwarrior on April 26, 2013 at 2:49 PM

At the rate this country is going..

Zeppelins leave a smaller carbon footprint..

Electrongod on April 26, 2013 at 2:50 PM

The constituents of Hank Johnson are as dumb as those of Maxine Waters, fools one and all.

Schadenfreude on April 26, 2013 at 2:50 PM

Mr. Johnson is waxing ecstatic on the thought that the Republican House is considering legislation on helium when there are so many other things which need legislation.

Well, helium legislation, pro or con, is far less damaging than health care legislation, in which I’m sure Mr. Johnson was fully in favor…

At least the helium program pays for itself — something which can never be said about most of the other programs in which Mr. Johnson is in favor.

unclesmrgol on April 26, 2013 at 2:50 PM

Boehner is the biggest fool in DC.

Schadenfreude on April 26, 2013 at 2:51 PM

As Ron White has said, “You can’t fix STUPID!”

GarandFan on April 26, 2013 at 2:52 PM

Imagine a world without balloons, people

I can’t, it’s too horrible to imagine. Besides the only thing keeping Guam from tipping over are all those giant helium filled balloons tied to that island.

On the other hand, if it gets rid of Carrot Top . . .

rbj on April 26, 2013 at 2:54 PM

My florist said there won’t be any helium balloons in the near future anyway. The price for the tanks has doubled recently. She was told it was because it is a rare earth mineral that is being depleted. I told her it sounds more like the Democrats found something else to tax and regulate out of existence. Why do they hate children and fun?

txhsmom on April 26, 2013 at 2:54 PM

At least the helium program pays for itself — something which can never be said about most of the other programs in which Mr. Johnson is in favor.

unclesmrgol on April 26, 2013 at 2:50 PM

I hope you are joking.

The federal helium reserves actually drive up the cost of helium because they create a disincentive for any new discovery by private firms.

tetriskid on April 26, 2013 at 2:54 PM

But at that very moment, Hastings was urging his colleagues to keep the government in the helium business for a little while longer. “We must recognize the realities of our current situation,” he said.

Hastings was heard to say in a squeaky voice reminiscent of an Oz munchkin. Follow the yellow brick

goldbrick road.

viking01 on April 26, 2013 at 2:55 PM

Hey, we’ve all seen what happened to the Hindenburg. It will be on all your heads if we end this program and something like that were to happen again.

Happy Nomad on April 26, 2013 at 2:56 PM

/Yeah, ban balloons. No more bubbles will burst inflating too big to fail./

maverick muse on April 26, 2013 at 2:56 PM

Maybe we can use the helium balloons to lift the heavy side of Guam.

forest on April 26, 2013 at 2:57 PM

Also from the NYT article:

Heightening fears about the long-term supply of helium is the uncertainty surrounding the future of the federal reserve in Amarillo. Under a 1996 law aimed at privatizing the government’s helium program, Congress mandated that the Bureau of Land Management sell off nearly all of the reserve by 2015. Fulfilling that requirement would further strain the national helium supply, said industry experts, several of whom are urging Congress to adopt new legislation that would extend the sales.

Evidently we’re at the transfer-of-ownership juncture. My immediate suspicion is that there’s no real reason to care one way or another, and people are simply jockeying to see whose pockets get lined.

Stoic Patriot on April 26, 2013 at 2:58 PM

Dear MKH –

It’s not about balloons.

It’s about basic science research like particle acceleration and low-temp Physics. The only terrestrial source of Helium comes from oil wells. Once released into the atmosphere, He actually escapes from the Earth.

I used to work in a science lab that consumed a lot of He gas and believe me, the worry about Helium prices is real. He conservation is a big issue and many labs that use it actually have He reclamation systems installed to avoid some of the costs associated with buying it.

I’m also not a huge fan of Government programs, but this is one area that would devastated if the free market “priced” He…it would become even more expensive than it is now under the Federal program. Innovations can help (like better reclamation systems), but He is a very scare commodity (like gold) contrary to what people might think.

powerpickle on April 26, 2013 at 2:58 PM

She was told it was because it is a rare earth mineral that is being depleted.

Sure. And after 1970, grocery stores stopped bagging in paper to “save the trees”. As if that explains why all paper junk mail still.

maverick muse on April 26, 2013 at 2:59 PM

We can’t shut down the helium reserve because then you might see more natural gas drilling, and that of course is an evil fossil fuel. If you could get helium from wind turbines, that’d be a different story.

JEM on April 26, 2013 at 3:00 PM

So, Congress has tried to kill it at least twice. The euthanization attempts were bipartisan, by Presidents Reagan and Clinton, and the program is now clinging to life after a 1996 bill required it to wind down after paying off “a more than $1 billion debt to other agencies.”

Let Kermit Gosnell deal with it, he’ll make sure this program gets … snipped.

powerpickle on April 26, 2013 at 3:00 PM

NPR / Planet Money did a sort of good podcast on it a while ago.

It’s not that good (it is NPR) but it gets some of the basic facts right. You might as well listen since we all paid like $100,000 for the podcast anyway.

The Weird Story Of Why Helium Prices Are Going Through The Roof

tetriskid on April 26, 2013 at 3:00 PM

http://www.youtube.com/watch?v=9nn1b6KANEc

Opposite Day on April 26, 2013 at 3:01 PM

The constituents of Hank Johnson are as dumb as those of Maxine Waters, fools one and all.

Schadenfreude on April 26, 2013 at 2:50 PM

Maybe we can store it on Guam to keep it from tipping over.

zmdavid on April 26, 2013 at 3:01 PM

Dear MKH –

It’s not about balloons.

It’s about basic science research like particle acceleration and low-temp Physics. The only terrestrial source of Helium comes from oil wells. Once released into the atmosphere, He actually escapes from the Earth.

I used to work in a science lab that consumed a lot of He gas and believe me, the worry about Helium prices is real. He conservation is a big issue and many labs that use it actually have He reclamation systems installed to avoid some of the costs associated with buying it.

I’m also not a huge fan of Government programs, but this is one area that would devastated if the free market “priced” He…it would become even more expensive than it is now under the Federal program. Innovations can help (like better reclamation systems), but He is a very scare commodity (like gold) contrary to what people might think.

powerpickle on April 26, 2013 at 2:58 PM

Interesting stuff which I was not aware of.

Stoic Patriot on April 26, 2013 at 3:02 PM

This isn’t as ridiculous as people are making it out to be. Unlike Hydrogen, which exists in vast quantities on Earth (in every hydrocarbon and every water molecule on the planet,) we actually don’t have that much Helium around.

MailOnline:

Nobel laureate Robert Richardson, a professor of physics at Cornell University in New York, told New Scientist magazine that once our helium reserves are gone there will be no way of replacing it.

…’There is no other substance which has a lower boiling point than helium. It is also used in the manufacture of fibre optics and liquid crystal displays.

Keeping an eye on what we are using for, isn’t that stupid. Now, whether this particular government agency is of any use or not is another question.

HakerA on April 26, 2013 at 3:02 PM

Speaking of utter fools, at Mother Jones.

Schadenfreude on April 26, 2013 at 3:03 PM

Well, obviously the solution is to tax helium!

GWB on April 26, 2013 at 3:03 PM

If that video and the one on Guam does not kick Hank Johnson out of office, our country is lost.

NickelAndDime on April 26, 2013 at 3:03 PM

He is a very scare commodity (like gold) contrary to what people might think.

powerpickle on April 26, 2013 at 2:58 PM

Nah. Your local Party City has tons of it already pre-packaged in tanks for easy use :)

MikeknaJ on April 26, 2013 at 3:04 PM

If that video and the one on Guam does not kick Hank Johnson out of office, our country is lost.

NickelAndDime on April 26, 2013 at 3:03 PM

Don’t get your hopes up for Hank Johnson being defeated anytime soon. His district is gerrymandered to point where it’s pretty much his seat for life.

midgeorgian on April 26, 2013 at 3:07 PM

Nah. Your local Party City has tons of it already pre-packaged in tanks for easy use :)

MikeknaJ on April 26, 2013 at 3:04 PM

Actually the stuff in the tanks at Party City is probably only a couple of % He gas. The rest is probably N2 gas. Balloons are usually filled with mixed gas.

Also, for any deep sea divers out there, you know how expesive it is to fill up a HeliOx tank so you don’t get the bends….

powerpickle on April 26, 2013 at 3:07 PM

Guam may tip over if something isn’t done soon!

trs on April 26, 2013 at 3:07 PM

Oh great, now Big Sis Incompetano will start stockpiling helium just in case she needs to nuke us to keep us safer.

viking01 on April 26, 2013 at 3:09 PM

Private companies have learned to produce helium. But the U.S. government still has its own reserve: a giant porous rock formation under the Texas Panhandle, whose crannies hold enough helium to fill 33 billion party balloons.

Think of all the CO2 that could be stored down there to stave off manbearpig.

weaselyone on April 26, 2013 at 3:10 PM

powerpickle on April 26, 2013 at 2:58 PM

Arguments like that are what keeps all federal programs alive that should not be alive.

“This program is tooooooo important for the feds to shut down.”

Sorry, I don’t buy it. Plus the feds could sell the reserve in the Texas panhandle to a private company and that source will keep on producing helium.

Bitter Clinger on April 26, 2013 at 3:11 PM

We may need to be thinking about prohibiting it use for frivolous things like party baloons. It is an “endangered resource” and we con’t get more without leaving Earth

krome on April 26, 2013 at 3:12 PM

… the U.S. government still has its own reserve: a giant porous rock formation under the Texas Panhandle, whose crannies hold enough helium to fill 33 billion party balloons.

Aha! I knew there was a reason those folks in the panhandle talk so funny!

Droopy on April 26, 2013 at 3:14 PM

Guam may tip over if something isn’t done soon!

trs on April 26, 2013 at 3:07 PM

Not only that, but with all the glaciers melting and diluting sea water (making it less dense), the island is in danger of sinking.

BobMbx on April 26, 2013 at 3:21 PM

powerpickle on April 26, 2013 at 2:58 PM

Arguments like that are what keeps all federal programs alive that should not be alive.

“This program is tooooooo important for the feds to shut down.”

Sorry, I don’t buy it. Plus the feds could sell the reserve in the Texas panhandle to a private company and that source will keep on producing helium.

Bitter Clinger on April 26, 2013 at 3:11 PM

Actually, the better thing to do would be for the Government to give its well to a consortium of Universities and Institutes that need it and let them operate it (much like how some of our National Labs are run by Universities).

Sorry, but this is one area where the “private economy” and the “public good” would not mix well. The private economy would price He so far up that it would choke off the ability to do basic science research.

powerpickle on April 26, 2013 at 3:25 PM

Resist We Much on April 26, 2013 at 3:14 PM

I didn’t realize Guam is a region.

BobMbx on April 26, 2013 at 3:25 PM

Bitter Clinger on April 26, 2013 at 3:11 PM

Plus, you’d pay the price anyway….if the Government funds basic science research at your local University and uses taxpayer dollars to supply that funding, then the price increase in He associated with it going into “private industry” hands would just mean that the government will pay more for basic science research….

But then again, HotGas users are all conservative troglodytes that are anti-science, gun-loving, Bible-thumpers anyway, right?

powerpickle on April 26, 2013 at 3:29 PM

next they will declare helium a green house gas and demand the stoarge of it. watch

unseen on April 26, 2013 at 3:42 PM

I propose we move the helium reserve to Guam and thus assure the tiny island nation doesn’t capsize, but rather floats above the sea in a cloud of silliness that the peoples of Guam could all hold near and dear. – dim rep Hank Johnson

jbtripp on April 26, 2013 at 3:42 PM

8 Surprising High-Tech Uses for Helium
including MRIs, super magnets and particle accelerators.

Quisp on April 26, 2013 at 3:42 PM

The private economy would price He so far up that it would choke off the ability to do basic science research.

powerpickle on April 26, 2013 at 3:25 PM

econ 101. Price must equal supply vs demand. If the “private sector” prices He so far above the ability of the major users to use it then it will create a “glut” of He on the market which will force the price to drop in spectuarly fashion.

If the price is above the ability of “basic science research” then the colleges will have to cut their woman studies program to fund chemisty class.

the free market works everytime its tried. It might take a couple months/years for the eocnomic forces to align but it works.

unseen on April 26, 2013 at 3:46 PM

Work harder, producers.

You need to be fluked more.

Schadenfreude on April 26, 2013 at 3:46 PM

As long as someone somewhere is getting their wallet lined with government money, nothing will ever change.

Let it burn.

Neo on April 26, 2013 at 3:48 PM

Ice Cream Balloons, Mandrake. Children’s balloons

JohnGalt23 on April 26, 2013 at 3:49 PM

You understand that your critiques are contradictory, right? You want the government to sell their helium supply as quickly as possible. But you’re upset that they’re selling it cheaply. Economics 101: If you want to sell more of something than the market would naturally take, you’ve got to make it cheaper. Yes, that cheap helium is crowding out the market and making a rare commodity overly used. And that’s bad. But the alternative is keeping the program alive, the very thing you are agitating against!

(I’d assume the lack of an arbitrage opportunity here has to do with the storage cost of the second least-dense substance on earth. Otherwise, we’d all buy helium and just wait for the inevitable shortage.)

calbear on April 26, 2013 at 3:52 PM

Yes, powerpickle and others. Of course helium has other uses than balloons. I’m well aware of this, though notably that’s not the oh-so-eloquent argument being made on the floor of the House. There are plenty of issues in the helium market about which I will never be an expert, though I have read about its various shortages and the predictions of disaster. Your response is kind of the point of the whole article. There will ALWAYS be someone who will argue, “Sure, the market works for many things but it can’t possibly work here.” What they usually mean is actually something more along the lines of either, “This is scary and may cause interruptions or price fluctuations,” or “Damn, we really need to be on the government teat, for serious.” The people who make those arguments are the reason we never cut a damn thing. Yes, there may be interruptions and price fluctuations. That’s what happens when the government takes over 40 percent of a market for 90 years, and it’s not a justification for continuing stupidity. As usual, plenty of people want to cut spending or programs; just not the ones they like.

Mary Katharine Ham on April 26, 2013 at 3:53 PM

We may need to be thinking about prohibiting it use for frivolous things like party baloons. It is an “endangered resource” and we con’t get more without leaving Earth

krome on April 26, 2013 at 3:12 PM

really?

In 1996, the U.S. had proven helium reserves, in such gas well complexes, of about 147 billion standard cubic feet (4.2 billion SCM).[81] At rates of use at that time (72 million SCM per year in the U.S.; see pie chart below) this is enough helium for about 58 years of U.S. use, and less than this (perhaps 80% of the time) at world use rates, although factors in saving and processing impact effective reserve numbers. It is estimated that the resource base for yet-unproven helium in natural gas in the U.S. is 31–53 trillion SCM, about 1000 times the proven reserves.[82]

unseen on April 26, 2013 at 3:56 PM

Sorry, but this is one area where the “private economy” and the “public good” would not mix well. The private economy would price He so far up that it would choke off the ability to do basic science research.

powerpickle on April 26, 2013 at 3:25 PM

And when no one is buying helium because it’s priced too high, the price will fall to a price where buying begins again.

Capitalism isn’t as hard as you make it out to be.

Bitter Clinger on April 26, 2013 at 3:57 PM

I didn’t realize Guam is a region.

BobMbx on April 26, 2013 at 3:25 PM

Neither did I, but nothing slips by old Tipping Guam. You learn something new everyday from him. lol

Resist We Much on April 26, 2013 at 3:58 PM

Thanks God they DIDN’T get rid of it!

Helium is very, very valuable and our strategic stockpile is worth a fortune. This stuff is completely non-renewable (unless we get fusion energy working) and essential for many scientific purposes. If we raise the price to what it really should be, we would protect the supply for future research plus help reduce the deficit.

Yes, helium balloons might become a thing of the past. They probably should.

Pythagoras on April 26, 2013 at 3:59 PM

Mary Katharine Ham on April 26, 2013 at 3:53 PM

Same arguments are made for ethanol.

Bitter Clinger on April 26, 2013 at 4:00 PM

. It is estimated that the resource base for yet-unproven helium in natural gas in the U.S. is 31–53 trillion SCM, about 1000 times the proven reserves.[82]

oh and that was before all the shale gas finds of the last 5 years.

unseen on April 26, 2013 at 4:00 PM

I propose we move the helium reserve to Guam and thus assure the tiny island nation doesn’t capsize, but rather floats above the sea in a cloud of silliness that the peoples of Guam could all hold near and dear. – dim rep Hank Johnson

jbtripp on April 26, 2013 at 3:42 PM

We can also send all of the ‘M’s’ to the ‘equator’ of Guam where they can inhale some helium and sing The Munchkin Land Song in their ‘high-pitched’ voices.

Resist We Much on April 26, 2013 at 4:01 PM

Same arguments are made for ethanol.

Bitter Clinger on April 26, 2013 at 4:00 PM

yeah but the ethanol producers know if the gov stops buying it no one else will, unlike helium that has many productional, scientific and entertainment uses.

unseen on April 26, 2013 at 4:02 PM

Thanks God they DIDN’T get rid of it!

Helium is very, very valuable and our strategic stockpile is worth a fortune. This stuff is completely non-renewable (unless we get fusion energy working) and essential for many scientific purposes. If we raise the price to what it really should be, we would protect the supply for future research plus help reduce the deficit.

Yes, helium balloons might become a thing of the past. They probably should.

Pythagoras on April 26, 2013 at 3:59 PM

really?

In 1996, the U.S. had proven helium reserves, in such gas well complexes, of about 147 billion standard cubic feet (4.2 billion SCM).[81] At rates of use at that time (72 million SCM per year in the U.S.; see pie chart below) this is enough helium for about 58 years of U.S. use, and less than this (perhaps 80% of the time) at world use rates, although factors in saving and processing impact effective reserve numbers. It is estimated that the resource base for yet-unproven helium in natural gas in the U.S. is 31–53 trillion SCM, about 1000 times the proven reserves.[82</blockquote

as long as we drill and pump natural gas there will be plenty of helium.

unseen on April 26, 2013 at 4:04 PM

will this put mimes out of business? or clowns?

unseen on April 26, 2013 at 4:07 PM

You understand that your critiques are contradictory, right? You want the government to sell their helium supply as quickly as possible. But you’re upset that they’re selling it cheaply. Economics 101: If you want to sell more of something than the market would naturally take, you’ve got to make it cheaper. Yes, that cheap helium is crowding out the market and making a rare commodity overly used. And that’s bad. But the alternative is keeping the program alive, the very thing you are agitating against!

(I’d assume the lack of an arbitrage opportunity here has to do with the storage cost of the second least-dense substance on earth. Otherwise, we’d all buy helium and just wait for the inevitable shortage.)

calbear on April 26, 2013 at 3:52 PM

Actually, if I understand the claims going on here, that’s not really what’s at issue. What powerpickle seems to be conveying is that helium needs to be made available cheaply, but to restrict its availability to a particular set of customers.

The issue with allowing it to be for-profit is that the supply would be exhausted by going to frivolous uses, while R&D work that could potentially result in far greater benefits from new discoveries / inventions (and that often require subsidies due to prohibitive entry costs) would essentially be shut down.

There’s also a bit of dispute as to what extent the existing stock of helium is fixed. It sounds like there is some kind of capacity to manufacture helium, but that it’s much easier / cheaper to obtain it in a natural form. I’d love to have some more clarifications on this.

Stoic Patriot on April 26, 2013 at 4:20 PM

This:

He is a very scare commodity (like gold) contrary to what people might think.

powerpickle on April 26, 2013 at 2:58 PM

DrDeano on April 26, 2013 at 4:28 PM

Let’s let those 33 billion party balloons off at once when Obama leaves office! Fill the sky with red, white, and blue patriotism!

Let’s make it a National Day of Celebration and Personal Hygiene: the end of the America’s helium reserve and the end of America’s most bombastic, gaseous demagogue!

Stepan on April 26, 2013 at 4:40 PM

It sounds like there is some kind of capacity to manufacture helium, but that it’s much easier / cheaper to obtain it in a natural form. I’d love to have some more clarifications on this.

Stoic Patriot on April 26, 2013 at 4:20 PM

Helium is lighter than air so it escapes the atmosphere into space. Thus why helium ballons go up up and away. Most helium is extracted by the process of fractional distillation from natural gas:

For large-scale use, helium is extracted by fractional distillation from natural gas, which can contain up to 7% helium.[77] Since helium has a lower boiling point than any other element, low temperature and high pressure are used to liquefy nearly all the other gases (mostly nitrogen and methane). The resulting crude helium gas is purified by successive exposures to lowering temperatures, in which almost all of the remaining nitrogen and other gases are precipitated out of the gaseous mixture. Activated charcoal is used as a final purification step, usually resulting in 99.995% pure Grade-A helium.[5] The principal impurity in Grade-A helium is neon. In a final production step, most of the helium that is produced is liquefied via a cryogenic process. This is necessary for applications requiring liquid helium and also allows helium suppliers to reduce the cost of long distance transportation, as the largest liquid helium containers have more than five times the capacity of the largest gaseous helium tube trailers.[33][78]

In 2008, approximately 169 million standard cubic meters (SCM) of helium were extracted from natural gas or withdrawn from helium reserves with approximately 78% from the United States, 10% from Algeria, and most of the remainder from Russia, Poland and Qatar.[79] In the United States, most helium is extracted from natural gas of the Hugoton and nearby gas fields in Kansas, Oklahoma, and Texas.[33] Much of this gas was once sent by pipeline to the National Helium Reserve, but since 2005 this reserve is presently being depleted and sold off.

Diffusion of crude natural gas through special semipermeable membranes and other barriers is another method to recover and purify helium.[80] In 1996, the U.S. had proven helium reserves, in such gas well complexes, of about 147 billion standard cubic feet (4.2 billion SCM).[81] At rates of use at that time (72 million SCM per year in the U.S.; see pie chart below) this is enough helium for about 58 years of U.S. use, and less than this (perhaps 80% of the time) at world use rates, although factors in saving and processing impact effective reserve numbers. It is estimated that the resource base for yet-unproven helium in natural gas in the U.S. is 31–53 trillion SCM, about 1000 times the proven reserves.[82]

Helium must be extracted from natural gas because it is present in air at only a fraction of that of neon, yet the demand for it is far higher. It is estimated that if all neon production were retooled to save helium, that 0.1% of the world’s helium demands would be satisfied. Similarly, only 1% of the world’s helium demands could be satisfied by re-tooling all air distillation plants.[83] Helium can be synthesized by bombardment of lithium or boron with high-velocity protons, but this process is a completely uneconomic method of production.[84]

Helium is commercially available in either liquid or gaseous form. As a liquid, it can be supplied in small insulated containers called dewars which hold up to 1,000 liters of helium, or in large ISO containers which have nominal capacities as large as 42 m3 (around 11,000 U.S. gallons). In gaseous form, small quantities of helium are supplied in high-pressure cylinders holding up to 8 m3 (approx. 282 standard cubic feet), while large quantities of high-pressure gas are supplied in tube trailers which have capacities of up to 4,860 m3 (approx. 172,000 standard cubic feet).

http://en.wikipedia.org/wiki/Helium#Modern_extraction_and_distribution

oh and for those saying it should be conserved for scientific uses. the best way to do that is raise the price of Helium so that ballon sellers can’t make any money off their ballons. The government is making Helium cheaper thus promoting more use of the gas. But it’s in no danger of going away.

unseen on April 26, 2013 at 5:03 PM

At 21 seconds he shakes his head as if he is saying ‘I can’t believe I am saying this’.

Be aware of peak helium/

tommer74 on April 26, 2013 at 5:14 PM

Reagan was right yet again, “the only thing that lives forever is a government program” (paraphrased).

This is going over like a Lead Balloon.

kirkill on April 26, 2013 at 5:37 PM

unseen on April 26, 2013 at 5:03 PM

Thanks for the wiki article! Good stuff!

Stoic Patriot on April 26, 2013 at 5:54 PM

econ 101. Price must equal supply vs demand. If the “private sector” prices He so far above the ability of the major users to use it then it will create a “glut” of He on the market which will force the price to drop in spectuarly fashion.

If the price is above the ability of “basic science research” then the colleges will have to cut their woman studies program to fund chemisty class.

the free market works everytime its tried. It might take a couple months/years for the eocnomic forces to align but it works.

unseen on April 26, 2013 at 3:46 PM

Helium has to be captured and stored, at a cost, otherwise it’s a waste product of natural gas production. It’s cheaper to let it escape, than to capture it. There would be no glut, because no one would store it, if they couldn’t sell it.

If the the science and balloon markets will not support the costs of containment and distribution, because the price is too high, HE will become very scarce.

danielreyes on April 26, 2013 at 5:55 PM

The issue with allowing it to be for-profit is that the supply would be exhausted by going to frivolous uses [....] What powerpickle seems to be conveying is that helium needs to be made available cheaply, but to restrict its availability to a particular set of customers.

Wasn’t that what we did in the 30s for gold?

There’s also a bit of dispute as to what extent the existing stock of helium is fixed. It sounds like there is some kind of capacity to manufacture helium, but that it’s much easier / cheaper to obtain it in a natural form. I’d love to have some more clarifications on this.

The only way to manufacture helium would be nuclear fusion. Needless to say, helium would be the least of the benefits of accomplishing that on an industrial scale. Perhaps you mean extraction from natural gasses?

calbear on April 26, 2013 at 5:57 PM

Wait. Whose fault is this. I need to know who to be mad at it.

Politricks on April 26, 2013 at 6:04 PM

I have to imagine that HE is available in different grades. Balloons must use the coursest grade. This might make enough of a price difference to make it practical.

danielreyes on April 26, 2013 at 6:26 PM

If the the science and balloon markets will not support the costs of containment and distribution, because the price is too high, HE will become very scarce.

danielreyes on April 26, 2013 at 5:55 PM

If the market is not artificially manipulated, there will be no scarcity.

TexAz on April 26, 2013 at 6:37 PM

but He is a very scare commodity (like gold) contrary to what people might think.

He is a gas used in manufacturing, mainly as a shielding gas for welding. For the manufacturing world the cost of He is real and a component of product cost. And unless a suitable alternative is found/developed, when He is gone…it’s gone, along with some manufacturing.

Buck_Nekkid on April 26, 2013 at 6:55 PM

22% of the annual total world production of 32 million kilograms goes into cooling the superconducting magnets in MRI scanners. 78% is used to pressurize and purge pipelines, in the maintenance of controlled atmospheres, and in welding.

Turns out we need it for more than just balloons and it can’t be replaced by any other gas.

This makes having a national reserve even more important.

danielreyes on April 26, 2013 at 6:56 PM

Well, I am not so sure that the libs aren’t about to BAN Balloons as a result of these CONTINUING problems!

Clearly, this problem deserves consideration by Hank Johnson! Maybe he thinks that the ballons are what keeps Islands from tipping over.

Freddy on April 26, 2013 at 7:11 PM

Unfortunately, DC has identified an actual need…for once. He is in very limited supply and literally cannot be substituted for if it runs out. Manufacturing and medical devices HAVE to take precedence over party balloons.

MelonCollie on April 26, 2013 at 7:20 PM

Let it burn.

Neo on April 26, 2013 at 3:48 PM

Actually, that only works for hydrogen, not helium.

After reading all of the comments so far, why not institute private market control with a limited strategic reserve, such as we have for oil?

AesopFan on April 26, 2013 at 10:52 PM

Some people bought into the idea that Ocare could be repealed, too.
Hank got reelected?!
If the govt is hiding helium, what else have they got buried in the sand somewhere.

Kissmygrits on April 27, 2013 at 10:24 AM

Private Industry has testified before congress to keep it, the very companies which refine and market helium.

Just saying…

Kermit on April 27, 2013 at 12:27 PM

The Federal Helium Reserve stopped taking in helium in 1973. In 1996 the Helium Privatization Act was passed and the reserve to be closed when the debt was paid off, which is this year.

That being said, private industry has wanted the reserve to stay open. PRIVATE industry purchases the crude helium from the Feds AND private sources, then refines it cryogenically at -452 Deg F to arrive at the required 99.9% purity for the market. It actually is a strategic reserve now, not a balloon gas repository as most think of helium. It does create revenue for the Federal government. Again, I repeat that private industry actually wants the reserve (which is self supporting) to remain open. That is why congress opted in the way it did.

Kermit on April 27, 2013 at 1:37 PM