Helium Crises Explained – Part 1
There I was, sitting in a convention hall in Las Vegas at the International Balloon Association (IBA) meetings this year. As a former Vice-President and International Convention Director of the association, I feel I have a vested interest in this group as well as everything it stands for. I was pleasantly surprised the room was pretty full. Well over 150 people were there at the beginning of the meeting to hear an important discussion about the helium problem in our world today.
Most unfortunately, by the end of this session, what was discussed and disseminated to us were not the only issues making me very uncomfortable. Just as serious as the facts given and issues debated was another fact – there were less than ten people left at the end of the meeting! To be sure, this was a very long discussion. A number of people took the podium to speak.
Many questions were asked, debated and answered.
This meeting was linked to the International Halloween, Costume and Party Show. Many in attendance had booths to man and because of the length of discussions the time began to creep into show floor time. So a number of audience members had to leave to be in their booths. However, the seriousness of the issues being discussed should really have trumped ANYBODY running off to their booth or to walk the aisles of a trade show. If the helium problems of supply and demand do not correct themselves, or if we do not work with the gas in a more careful way, there won’t be much of a balloon industry left to tend to.
All of these distributors and manufacturers running to their booths to sell balloons and related materials and equipment missed the forest for the trees. The same can be said for anyone else who took off to walk the show.
IF HELIUM SUPPLIES DWINDLE WE WON’T BE ABLE TO SELL MANY BALLOONS (OR RELATED SUPPLIES AND EQUIPMENT) BECAUSE WE EITHER WON’T BE ABLE TO ACQUIRE OR WON’T BE ABLE TO AFFORD THE GAS TO FILL BALLOONS!!
If there is no helium to use there will be no need to buy or sell balloons!
If there is no helium to use there will be no equipment needed to purchase!
If there is no helium to use there will be no need for ribbon or tulle and hundreds of other items we need and use every day!
Helium is the “horse before the cart” of this industry. Without the gas, we’ll be selling lots of lovely air-filled creations to be sure. But, what gives this industry a real “lift” (and no need to pardon my pun) is the fact that the gas gives our product an other-worldly quality. Balloons floating skyward, going against what our eyes and minds say should be happening is what makes them so uniquely different than anything down here on Earth. Balloons floating high above our heads as single items purchased, as arrangements, in arches or columns, or used to lift other items are what gives magic and wonder to our business. This business of balloons would not be an industry without helium.
At this meeting, we received (and what too many people missed) a whole lot of information. Some of it surprising, much of it made perfect sense and some of it was downright upsetting.
If you need it in a nutshell, here it is:
The shortage has not been contrived.
Expect more price increase; as many as two or three a year until perhaps 2012.
There is almost NOTHING we can do about this problem but hang on for the ride.
The meeting hosted by The International Balloon Association (IBA) brought together a number of manufacturers, distributors, decorators, party store owners and others. The keynote speaker of this meeting was Phil Kornbluth. Mr. Kornbluth is the Executive Vice-President of Global Helium, Matheson Tri-Gas. His company supplies bulk and specialty gases and gas handling equipment. His company is one of only six companies in the world today that refines and supplies helium.
Let me repeat that:
His company is one of only six companies in the whole world today that refines and supplies helium!
And here is something else startling – there are only 15 sources of helium in the entire world! Ten of those 15 are in the United States.
So, there are very few sources for helium and even less refiner/suppliers of the gas. One little hiccup in the supply of helium at the source, in refinement or in distribution and everything goes haywire. In 2006, the United States Bureau of Land Management started hiccupping and the whole world got indigestion. Mr. Kornbluth called this the beginning of the “perfect storm” not only for us, but for everyone on our planet that needs and uses helium today.
The Bureau of Land Management (BLM) is THE major supplier of crude helium to refiners in the United States, who market and sell pure helium throughout the world. Managing the nation’s “federal helium
Mr. Kornbluth said the #1 cause of our shortage problem was the BLM losing pressure in two of its three compressors in 2006. This caused outages to supply the helium and the shortages began. And because America supplies 75% of all the helium in the world and the BLM holds most of the helium, pretty much every helium supplier experienced tight supply, reserve” was a quiet federal program until 2006 when temporary shortages made news around the world.
2006 was just a real bad year for helium. Beside the BLM issues, there were capacity utilization problems in both Algeria and Qatar. This impacted 8% of the worldwide supply. Planned shutdowns and unplanned outages occurred in four other plants as well.
2007 really wasn’t much better as price increases continued, surcharges were employed by suppliers and almost every supplier of the gas was put on “allocation” (i.e. they were being rationed). Added to these issues was trouble at the huge ExxonMobil plant throughout much of the year. First, production was off 15% from April-September because of a CO2 removal problem. Then in October their output was reduced by 50% while repairs were being made to fix the initial problem.
This brings us to 2008. While supply shortages have eased somewhat, there is still so much that could go wrong to create more troubles for not only price increases but supply shortages as well. Price remained high.
For the next few years supply and costs seemed to stabilize but this was really nothing more than just a smoke screen as more doomsday issues crept slowly forward. 2011 saw several increases in pricing for the gas.
What’s happening in 2012? Read Part 2 to see where the crises of Helium takes us today.