No More 99 Red Balloons? Global Helium Shortage!

Helium Shortage Sends Prices Up, Up and Away

By THOMAS J. SHEERAN - The Associated Press

CLEVELAND - The shortage affecting some suppliers results from a series of unconnected events, including delays in getting helium plants on line in Algeria and the Mideast, the U.S. Bureau of Land Management said.

The agency manages public lands, mostly in the West, and their mineral resources. It handles 42 percent of the U.S. production of crude helium, the colorless, odorless gas best known for inflating balloons that is derived from natural gas production.

The government provides more than one third of the world's helium, selling it to private plants for processing.

The various factors involved in the shortage in recent months should be resolved by November, according to Leslie Theiss, who manages the BLM office in Amarillo, Texas, the heart of U.S. production of helium.

The U.S. government helium production remains at 100 percent, but output will be trimmed in the fall for up to two weeks for scheduled maintenance that has already been postponed to reduce further supply disruptions, Theiss said.

Any supply disruptions are most likely to affect occasional users _ such as stores that sell seasonal party balloons _ with year-round contract users in better shape.

In Cleveland, Cornelia Franklin at A Pink Gorilla party-supply store said she has used the same supplier for 17 years and has been assured her store will get uninterrupted priority shipments.

Helium use for balloons can be seasonal, including busy Valentine's Day and Christmas holiday demand, Franklin said. Any reduced supplies probably won't affect people much because fall is not a peak period, she said.

Inflating _ "lifting" in industry lingo _ represents less than 7 percent of helium use. Most uses are industrial, including aerospace, electronics, fiber optics, metals and medical imaging equipment.

The first public hint of the shortage emerged when party-supply stores warned customers that they were coping with reduced supplies amid reduced production and demand rising about 4 percent annually worldwide.

A key issue in the shortage involves contracts for helium supplies from a Qatar plant and two in Algeria which that been off-line, said Hans Stuart, a BLM spokesman. One overseas plant has been involved in lengthy maintenance and two are behind on construction schedules.

Along a 1-mile suburban Cleveland commercial corridor, the helium supply situation was uneven.

Factory Card and Party City stores, both with a wall of inflated sample balloons, reported no helium supply problems. But Party Place, whose logo includes red and blue balloons, warned customers with a notice taped to the entrance that temporary supply limits meant it cannot rent helium tanks used for mass inflating.

Pam Brooks, emerging from the Party City store with $9 worth of eight white and translucent balloons to promote an office-supply store open house, wasn't too worried, as long as the temporary shortage doesn't mean big price increases.

"Any kind of balloon _ especially helium balloons that float around _ are visual and attract attention and display a sense of fun," she said. "When people see balloons they know that's where the party is."

Would she pay a premium if helium gets expensive? "I guess it depends on how much more. It's not expensive as it is to get a display like this," she said.

Praxair Inc., a leading helium supplier based in Danbury, Conn., announced a 10 percent to 15 percent price increase Friday, in part due to high demand and energy costs. Airgas Inc. in Radnor, Pa., said in May it was raising prices for various items, including 15 percent or bigger hikes for helium because of higher energy and operating costs.

Praxair said it was working to keep its regular customers satisfied. "Given the fragile nature of the helium supply system, we are not able at this time to supply spot, backup, or unplanned volume," the company said Monday.

A high-profile helium user, the blimp fleet of Goodyear Tire & Rubber Co. in Akron, said it was more concerned by price increases resulting from any shortage. About 10,000 cubic feet to 20,000 cubic feet of replacement helium is pumped yearly into the blimps, which have capacities of 170,000 cubic feet to 180,000 cubic feet.

Blimps lose more helium in hot, humid weather, said Roger Rydell, a Goodyear vice president. He said the company would not disclose what it pays for helium.