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.

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.