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Posts Tagged ‘helium shortage’

How The Helium Shortage Impacts Football Season

Friday, September 7th, 2012

The past week has been a welcome return to football season for fans everywhere. And that means a return to carbon-dioxide filled beverages, welded seats and a few helium-filled balloons. But for the Nebraska Cornhuskers, the reunion with helium balloons would be its last for a while.

Going back to the 1940s, Huskers fans have upheld a tradition of releasing red, helium-filled balloons after the team’s first touchdown of every home game. In light of the current helium shortage, this 70-year-old tradition is in jeopardy. Last Saturday, balloons were filled for the school’s season opener for one final balloon release. But instead of the usual 5,000 balloons, only about half of that was filled. The balloon release is officially “on hiatus” for an indefinite period, leaving the school in search of a new tradition. (Got any gas-filled suggestions?)

It seems that helium and football go hand-in-hand at the University of Nebraska. I came across a video on the university’s YouTube channel in a series called “Football Physics.” The video features Professor Tim Gay, who brings science to the football field to see whether a helium-filled football could give a kicker any advantage. Want to find out the answer? The video is below.

The Discovery Channel’s MythBusters did a more comprehensive test of the same question in one episode, and actually predicted that the lighter, helium-filled ball would travel farther. To their surprise, they found that a heavier ball has greater force, and actually flies through the air farther. If footballs were light enough to float, we might have a different outcome.

It should be noted that UNL’s video shows the unsafe practice of inhaling helium—and, as GAWDA distributors can tell you, the dangers associated with helium are anything but a myth.

Even with the Huskers’ storied tradition coming to an end, there are many storylines in the world of football and gases and welding that will live on. What happens when a gases and welding distributor gets together with a football superstar? Read the conversation between South Jersey Welding Supply’s Bob Thornton and Super Bowl champ Joe Theismann here.

Helium Shortage Puts GAWDA Members In The Spotlight

Tuesday, July 24th, 2012

Still-Leben Mülheim 10 iesWhen it comes to questions about gases and welding equipment, it’s no secret that GAWDA members have a great deal of expertise. In my experience, they’re also very willing and eager to share this expertise with others. I couldn’t even begin to measure just how much I’ve learned about the industry from GAWDA members.

With the helium shortage all over the news, local newspapers and TV stations have turned to GAWDA distributors to tap into this expertise and learn about the helium supply situation. While a product shortage may not be a boon to business, it has no doubt provided some exposure for these distributors.

Here are some of the distributors who have appeared in recent news stories:

Norco (Boise, ID) has been interviewed by several news sources. President Ned Pontious told KTVB, “Obviously the price on helium has been increasing quite dramatically, but what’s really frustrating is when price is not an issue and you still can’t get the product. We’re willing to pay whatever we can pay to get it, but we can’t get it.” Pontious was also interviewed by another area TV station, and the company made an appearance on news station KREM2.

Mike Storie, vice president of sales at Haun Welding Supply (Syracuse, NY), told The Post-Standard that the company has 1,000 empty cylinders that should be full of helium. “We see no signs of it going backward.” Store Manager Brian McDonald was also interviewed by a local TV station, and Sales Manager Grant Hanlon spoke with an area newspaper.

In Wichita, KS, Lampton Welding Supply President Guy Marlin was quoted in the Wichita Business Journal: “It’s probably not going to change for a while. We’re fortunate that we’ve been able to hang in there.”

nexAir (Memphis, TN) Senior VP Steve Atkins told The Commerical Appeal, “Everything we read and see leads us to expect to see more cost increases in the future.”

“Helium in the earth is depleting, not as much as there use to be, demand has gone up somewhat, and it’s a worldwide product now,” said Melo’s Gas & Gear (Bakersfield, CA) President Dave Melo in an interview with a local TV station.

Noble Gas Solutions (Albany, NY) President and CEO Dave Mahoney told with the Times Union, “The last thing I want to do is see a welding operation lay people off … so I can watch a bunch of balloons at a parade.”

“We are trying to spread it out so everybody gets something,” Michael Sutley, OXARC (Spokane, WA) vice president and general manager, told the Tri-City Herald.

An update on Weldstar’s (Aurora, IL) website was quoted by the Pharos-Tribune as saying, “Along with many other distributors, Weldstar is feeling the effects of a global helium shortage, which is expected to last up to three years.”

In Bend, OR, Airgas Branch Manager Phil Price told The Bend Bulletin, “As far as we know, we could see the end of helium-filled balloons.”

In these interviews, GAWDA members offered some great insights into the helium supply situation. Reading through these articles, I realized that having access to this incredible network of industry members is something that I take for granted at times…after all, I get to speak with members about a variety of business and industry related topics on a daily basis (whereas it takes an event like the helium shortage for mainstream media outlets to pick up the phone) . All I can say is it’s about time that the general public got to see how knowledgeable and well-spoken GAWDA members are.

If I left your company out of the list of news appearances about the helium supply, feel free to add a link in the comments area.

Two Myths Surrounding The Helium Shortage

Tuesday, May 29th, 2012

HeTube
The helium shortage has captured headlines across the country. Over the past few months, there have been hundreds of articles written about the current state of supply and the rising costs of helium. Just in the past few days, headlines like “Helium shortage deflates grad parties” and “Helium shortage threatens parties as we know them” have graced the banners of local and national news outlets across the country. While most of these articles fail to capture the gravity of the situation beyond the outlook for party balloons, this is not the real concern. What is concerning is the amount of misinformation swirling around about the helium shortage.

“The helium shortage was caused by the government.”

This fallacy pervades news reports, and the bottom line is it’s simply not true. An Associated Press article appearing in such publications as The Washington Post states, “Helium is in short supply because of the 1996 Helium Privatization Act that called on the government to sell off most of its helium reserves by 2015.”

Meanwhile, an editorial in Tuesday’s edition of The Boston Globe reads, “The nation is selling off its vast helium reserve — in such a ham-fisted way that it’s led to a shortage of the gas.”

These statements are not only simplistic, but inaccurate. The Chicago Tribune, on the other hand, correctly reported that the helium shortage has been caused by a variety of coinciding factors, particularly plant outages and shutdowns across the globe. It helps that The Tribune spoke with industry experts like Linde’s head of global helium, Nick Haines.

I also had the pleasure of speaking with Haines a few months ago, who explained that helium is a globally traded product, and outages anywhere in the world affect everyone. Planned and unplanned outages across the world are largely to blame for the current situation, not the U.S. government’s plan to sell off its reserves.

“The United States is running out of helium.”

While partially true, it’s not for the reasons outlined by the media. An article in The Washington Post attempted to explain the need for legislation to replace the Helium Privatization Act of 1996 (HPA), but when it was reprinted in The Boston Globe, careless editing made the statement even more off base: “Thanks to a 1996 law that has forced the government to sell off its helium reserves at bargain-bin prices, the country’s stockpile of the relatively rare and nonrenewable gas could soon vanish.” (WP used the word “dwindle” in place of “vanish.”)

Here’s the problem with that statement. Under the existing system, the federal helium program will be shut down long before it ever runs out of helium. This is one of the main reasons the industry is scrambling to get new legislation in place before the HPA expires. Air Products’ Director of Helium Sourcing Walter Nelson told the Senate that “At current production rates of about two billion cubic feet per year, the reservoir could continue to produce helium for five to six more years.” He also noted that “Helium was removed from the reservoir at rates lower than those projected.”

So while we may run out of helium if the HPA expires, it’s not because the government is selling it off too fast. It’s simply because we would lose access to stockpiles that currently provide almost a third of the world’s helium, stranding valuable helium supplies.

Overall, the media is sending a lot of fuzzy and often incorrect messages. Distributors may be wise to take advantage of this opportunity to share their expertise with local news outlets, and receive some visibility in exchange.

Gas Industry Members Testify On Helium Bill

Tuesday, May 15th, 2012
BLM Helium Enrichment

The Bureau of Land Management's crude helium enrichment facility near Amarillo, Texas.

It’s quickly becoming more apparent that the Helium Privatization Act of 1996 has a few flaws. The act called for the Bureau of Land Management to sell off the nation’s helium reserve by 2015. 16 years later—and only 3 from the Helium Privatization Act’s end target—we are amidst a helium shortage. Just recently, legislation was introduced to address the shortcomings of the Helium Privatization Act. The Helium Stewardship Act of 2012 seeks to preserve the supply of helium and reconsider how the government approaches the sale of this precious resource.

Last week, the Senate committee held a hearing regarding the new legislation. Two GAWDA member companies, Air Liquide and Air Products, were represented at the hearing. Many more member companies will be impacted by its outcome.

Walter Nelson, director of helium sourcing & supply chain at Air Products, testified on the urgency of this new legislation. “Unless BLM has the authority to continue to operate the federal reservoir— which it won’t if there is no successor statue—all of the helium that remains in the reserve will be inaccessible. That means that 30 percent of the worldwide supply will be essentially locked up, causing prices to skyrocket, some users with no ability to access helium, and chaos in the economic sectors that now rely on helium.”

Nelson expressed Air Products’ support for the new legislation, but asked the Senate committee to reconsider how the BLM sets the price of its crude helium supply. “Guidance must be established for the Department of Interior and BLM to ensure the market-based price methodology is sound and fair,” he stated.

Air Liquide Helium America President David Joyner also commented on the pricing of helium, noting that recent price increases from the BLM have been “sudden, significant jumps, leading to an irregular domestic pricing mechanism.” He adds, “To complicate matters further, helium sourcing agreements beyond the closed BLM system reference the BLM crude price as an index for their own pricing formulas. This, in effect, drives up the price of helium for all consumers not only here in the United States but also around the world.” Ironically, the BLM price increases have been made in an effort to bridge the gap between federal and market pricing, creating a cycle in which prices will only continue to climb.

Both Joyner and Nelson made interesting points, and it’s clear that action from the government is required to bring the helium situation under control until a sufficient privatized system can be put in place. Within their testimonies is an interesting debate about the sale of helium to refineries, and whether the government should reconsider its 94 percent allocation to six domestic refineries.

You can read or watch an archive video of the full testimonies of Air Products and Air Liquide here.

Is the Helium Stewardship Act the answer the gas industry needs? Let me know what you think of the new legislation.

Helium Shortage Turns Into Force Majeure

Friday, April 13th, 2012

Still-Leben Mülheim 10 ies
Despite hopes that the supply of helium might straighten itself out in 2012, it appears gases and welding distributors won’t have it so easy after all. The most recent development is the announcement from the U.S. Bureau of Land Management about a two-week maintenance outage in June 2012, which coincides with a planned 8-week outage of ExxonMobil’s helium supply. There are several other outages, including the shutdown of Skikda in Algeria in anticipation of tying in the Skikda megatrain, which is expected to come online in the Third Quarter. Even in the short term, helium supplies in Qatar and Australia have outages planned for April and May.

Up until now, most distributors I’ve talked to have escaped the clenches of tight helium supply. But with additional outages, several suppliers have allocated their available helium supplies, leaving distributors with little choice. Now the only question is how they will respond.

Cee Kay Supply announced that it will not accept new customers and that existing ones may be subject to price increases and allocation. Gas applications in medial, laboratory and manufacturing are currently exempt from this allocation.

Included in the announcement from Cee Kay were letters from Linde and Air Products explaining the circumstances of their allocations. Air Products writes that it is “providing you formal notice of force majeure,” a term many distributors are familiar with from challenges with calcium carbide supplies in 2011.

As GAWDA Consultant and General Counsel Rick Schweitzer referred to in Welding & Gases Today:

Force majeure is a French term meaning “superior force.” When the seller’s performance is affected by some unforeseeable event, the seller’s performance is excused. The event may be an “Act of God” such as a fire, flood or tornado, or it may be labor unrest, war or insurrection. In order for the seller to take advantage of this provision, the event may not be caused the seller’s negligence or intentional act.

As the helium situation continues to linger, how are you responding?

One suggestion from LinkedIn is to switch customers to a trimix for GMAW and FCAW applications. Although most trimixes contain helium, it certainly requires less helium.

How is your company handling the helium shortage over the next few months?

A Second Helping Of Helium, Plus Dessert

Friday, February 17th, 2012

Helium is on everyone’s minds right now. As mentioned in my last blog post, a flurry of media attention has emerged on the helium shortage lately. It’s not just media hype or the balloon retailers who are talking about it. As I learned via Twitter, helium has been a big topic of discussion at the most recent Independent Welding Distributors Cooperative meeting in Orlando. Certainly there are a lot of questions surrounding helium, and hopefully an email exchange I had earlier this week can shed some light on these questions.

As indicated in Eyeing Potential Shortages In 2012 (thanks to the insights of Nick Haines, head of global helium source development at Linde), there are two helium plants slated to come on stream in 2012, and until the new plants are on stream, supply is likely to remain tight. From the current situation, I’d say Haines was right about supply remaining tight.

So when exactly will things ease up? One of the two plants mentioned is a joint venture between Air Products and Matheson that is expected to bring an additional 200 million standard cubic feet per year of helium to the market. Bob Lein, director, helium sourcing and supply at Matheson sent me this update on the anticipated startup of the Wyoming plant:

“Startup of the APMTG Helium plant in Big Piney, Wyoming, will commence as soon as a reliable supply of helium feedgas is made available to the plant by our feedgas supplier. We expect that to occur sometime in the next few months.”

Edible Helium BalloonLong term, popular belief (among distributors I’ve spoken with) is that the cost of helium will go up, as is the nature of basic supply and demand. As seen in my last blog, the cost and availability is certainly affecting the business of balloon retailers. Just think—some day, a helium balloon could be a rarity, a novelty reserved for special occasions.

Of course, if you’re going to pay extra for a balloon, some people think it might as well be edible too. Apparenlty one restaurant in Chicago does, where they’ve developed a helium-filled balloon for their dessert menu.

The green apple flavored delicacy created by Alinea Restaurant starts out as a syrup that is inflated with helium (See bottom left). Even the string is edible, as it’s made from dehydrated granny smith apple. Of course, whenever dealing with helium, it is always dangerous to inhale the gas. For that reason, Alinea attaches a needle to the bottom of the string, allowing diners to pop the balloon (to let the helium out) and eat up.

Edible balloon starts as syrup

The edible helium balloon starts as syrup.

Needle for popping edible helium balloon.

Needle for popping balloon

Photos via YouTube.

Helium Shortage Takes Over Valentine’s Day

Tuesday, February 14th, 2012

Valentine’s Day is one of the busiest days of the year for balloon retailers, and the ongoing helium shortage has been a cloud over many such businesses. I’ve been reading local news reports from around the country, all discussing the fact that helium-filled balloons are harder to come by and a little pricier this Valentine’s Day.

Welding & Gases Today has been following the helium shortage for the last few months, and with balloon retailers in the news, it seemed like a good time to check in with distributors. How is the shortage affecting distributors and their customers? The response is mixed.

Scott Myran, operations manager at Mississippi Welders Supply (Winona, MN), noted the helium supply strain in a conversation with me this past November, and told me this week that the situation has not changed in the last several months. “Helium is going to be an ongoing issue on into the future,” he says. “There’s a finite quantity. Eventually, we will get to the point where the U.S. is no longer the largest exporter in the world, and we’ll have to start importing. Helium’s probably going to become harder to procure, and it’s no doubt going to get more expensive.”

Despite the tight supply, MWS has been able to keep up with customer demand. Myran says the company created a backup plan on how it would prioritize if forced to put customers on allocation. “Medical needs would have been priority number one,” he says. Thankfully, the company has not had to call on this plan.

However, it appears some distributors have had to follow this route. End-user Donna Ryan, owner of Donna’s Helium and Balloon told Amarillo’s Pronews 7, “The way they are allocating the helium now, hospitals are on the top of the list, which is exactly where they belong. Balloon helium is at the bottom.”

While MWS has not had any difficulty meeting customers’ supply needs, Myran says costs have gone up. “Whether it’s helium or gas for your car, customers make that individual decision as they need to. Sometimes when we’re aware that something is in tight supply, price is not such an issue.”

In Wichita, KS, Lampton Welding Supply has not felt the pressure of tightening supply. “We haven’t had any strain. We’ve been able to fill 100 percent of our needs,” says vice president Doug Lampton. Lampton Welding Supply prepared for the helium shortage by purchasing additional helium cylinders, and it seems to be paying off. Lampton says the company has added quite a bit of business over the last few months due to other distributors’ inability to secure a steady supply of helium.

Similar to MWS, Glenn Bliss, president of General Distributing Company in Great Falls, MT, told KFBB “With our existing customers, we don’t foresee any issues whatsoever, but it’s a situation where we are not able to go out and proactively look for new helium business right now.” General Distributing invested in a tanker last year, allowing the company to pick up helium in bulk and bring it back to Montana. Bliss says the tanker allows the company to absorb some of the rising costs of helium.

How is your business handling the helium supply strain?

Of course, with the cost of helium going up, you can’t go wrong with a bouquet of welded flowers, like the ones created by a group of high school students in Washington for Valentine’s Day.

How To Handle A Helium Shortage

Tuesday, October 25th, 2011

Still-Leben Mülheim 10 ies
Two weeks ago, I went into a party store to buy a balloon. “Sorry. The helium’s all gone,” the clerk told me. It wasn’t that the store hadn’t gone for a refill or that the store’s gas distributor was unresponsive—there simply was no helium to be had.

For most of the industrial gas industry, the ongoing helium shortage is nothing new. However, the latest helium hiccup has drawn a fair amount of attention from mainstream media. Believe it or not, most of the attention has been on party balloon dealers. The Scranton Times-Tribune in Pennsylvania, The Wichita Eagle in Kansas and The Globe Gazette in Iowa all had articles within the last few days about local businesses that have been hurt by the shortage.

The latest supply squeeze was caused by a helium plant outage in Wyoming back in August and September. As Matheson Executive VP for Global Helium Phil Kornbluth told the Wichita Eagle, the root of the problem is that current supply nearly matches demand, so an outage such as this one means a shortage. “When you have a tight supply balance to begin with, maybe 95 percent, it doesn’t take much of a shut down to cause a shortage,” he says.

The question is: with inevitable helium supply challenges, how do you deal with it? Do you ration your customers equally? Do you prioritize medical and industrial facilities over balloon dealers, as one of the above articles says is happening?

How did you handle the latest supply challenge? Let me know by leaving a comment.

Should We Raise Helium Prices?

Thursday, July 15th, 2010

HeTube
The world is running out of helium.

At 2008 usage rates, it’s estimated that the world’s helium supply would only last for another 25 years. Take a minute to digest that.

I came across a memorable quote from Robert C. Richardson, 1996 Nobel Prize winner in physics and Cornell physics professor, a credible source who has devoted much of his life’s research to helium. “That which God has taken 4.7 billion years to create will be dissipated in a little more than 100 years,” Richardson stressed.

The question is: what can be done? To address the anticipated shortage, should the price of helium be regulated to control usage? Richardson says a 20-fold increase in the price of helium would be about right. The idea may not be easy to swallow, but in the best case scenario, higher costs would fuel innovation—finding ways to recycle helium and finding alternative gases to replace helium, like using argon in welding. It goes back to the famous quip, “Necessity is the mother of invention.”

Higher costs for helium may not be an attractive solution, but it is better than the alternative of completely depleting the world’s helium supply. But hey, in another 4.7 billion years, everything will be back to normal.

Do you think it’s a good/bad idea? Is there a better solution than raising the cost? Tell me what you think.