Since the United States is the biggest supplier of helium globally, the market value for helium has been artificially lowered. While some other countries (Canada, Russia, and Algeria) produce helium, they collectively supply only 22 percent of global demand. When the act was first passed, the price set was close to double the market price. The stock was not depleted, and in fact, a 2000 report by the NAS concluded that everything was going fine and that the price the BLM was asking was still above market value, writing, “Based on the information assembled for this report, the committee believes that the Helium Privatization Act of 1996 will not have a substantial impact on helium users,” in part because “[s]ince the mid-1980s, there have been no drastic increases in the price of helium and no shortages of supply.” But then global demand increased and the price tripled by 2008. U.S. consumption actually decreased, but that was more than offset by increased use abroad—primarily in Asia for semiconductor and fiberoptics industries. The market bought just about every cubic foot of helium the reserve would ship, and more than half of the reserve has been depleted.
In 2010, the NAS issued a new report that detailed the slow-moving disaster, concluding that the law “could amount to a taxpayer-financed subsidy for consumption of this scarce publicly owned resource.” The reserve was being tapped too quickly, supplying one-third of world demand. Worse, since the price of helium from the reserve is so low, companies are discouraged from purifying helium because they can’t get a fair price for it. Natural gas companies have little incentive to invest in the equipment and energy necessary to purify it, especially when the helium concentration is low—so the helium is being lost to the atmosphere.
What we should be worried about now is what will happen when the BLM helium runs out. The 1996 act has addicted the global markets to artificially low prices. As the BLM raises its prices, global prices follow.
Earlier this year, scientists and industry experts testified before Congress about the problems with the Helium Privatization Act, arguing in favor of new legislation. They proposed the Helium Stewardship Act, which would grant the BLM more freedom in selling its reserves. But the new proposal still mandates selling off most of the reserve, and would cause much of it to still be sold at artificially low prices.
The Macy’s Thanksgiving Day Parade isn’t exactly the biggest problem facing helium, but it’s the most visible way to understand an element that is inert, invisible, and lighter than air. The 16 parade balloons require about 300,000 cubic feet of helium combined. Assuming a drugstore balloon is 1 cubic foot (that’s being a bit generous) that’s 18,750 drugstore balloons for each parade one. The parade has experimented with recycling helium from some of the smaller balloons, and a Macy’s spokesperson says that they are inflating balloons with combinations of helium and air to cut down on helium use. But Macy’s says, “the technology is currently not there yet to reclaim the gas in a meaningful way.”
So enjoy Spider-Man flying down Sixth Avenue, or the Elf on the Shelf bouncing down Central Park West quietly judging you and your children. Remember them years from now, as the helium supply diminishes and demand continues to grow, raising prices and leaving us with defunct MRI machines and deflated balloons.