Chemistry

A look at the Helium Industry in the us Economy



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Just hearing the word helium brings thoughts of party balloons and squeaky voices. Helium, however, is serious business. Many fields of endeavor rely on a consistent supply of helium to function. Although many people are unaware of it, we are in the midst of a helium shortage. Ironically, helium is the second most abundant element in the universe. It is a colorless, odorless, inert gas. Helium was first observed on the sun during a solar eclipse in 1868 by the French astronomer Pierre Janssen. It was subsequently named helium after the Greek word helios, meaning sun. Helium makes up about 0.0005 percent of Earth's atmosphere. It is a byproduct of the radioactive decay of uranium and thorium, and readily dissipates into the atmosphere, making large deposits of helium rare on Earth. It can be found in relatively small quantities in natural gas deposits and is extracted as part of the mining process.

Until recently, all production and purification of helium in the United States was controlled by the government. The Helium Act of 1925 placed all US helium production under the control of the US Bureau of Mines. In 1960, amendments to the Helium Act gave the Secretary of the Interior the job of purchasing and storing helium as well as maintaining helium production. The US government established the Federal Helium Reserve at the Cliffside Storage Facility outside of Amarillo, Texas. They eventually stockpiled more than 30 billion cubic feet of helium, enough to last 100 years at the current rate of consumption. In the mid-1990s, Congress decided that maintaining this program was too costly to maintain. The Helium Privatization Act of 1996 ordered the shutdown of government helium facilities and the sale of most of the Reserve by 2015, putting helium production into the hands of private corporations.

Since then, the helium industry has become a growing segment of the economy. The uses for helium are many and varied. Some useful applications for helium are:

- Coolant for nuclear reactors
- Inert environment for arc welding
- Mixed with oxygen, creates breathable air for divers
- Protective environment for growing silicon crystals
- Buoyancy for balloons used in atmospheric research
- Coolant for high powered magnets in MRI equipment
- Pressurization of liquid rocket fuel
- Manufacture and research of semiconductors
- Control of heat transfer in fiber optic technology

These are only a few examples of the industrial uses of helium worldwide. Since helium cannot be manufactured synthetically, these industries are dependent on the naturally occurring supplies of this non-renewable resource.

The majority of the world's commercial helium comes from large deposits of natural gas in Texas, Oklahoma and Kansas, as well as the stockpile in the Federal Helium Reserve. However, that will slowly change, as the stored helium in the Reserve is sold off and new facilities open in Russia, Poland, Algeria and Qatar. Currently, there is a shortage of helium, because overseas production is not taking place as quickly as planned. In addition, the natural gas deposits in the United States are shrinking, along with the helium contained therein. This is bad news for many US industries, which will have to import helium in an ever more competitive market. According to the laws of supply and demand, this will result in a price increase over time, and in fact we are seeing that happen already. According to an article in the St. Louis Post-Dispatch on January 6, 2008, helium prices increased by 50% over the previous 12 months. Additionally, Praxair Incorporated, a major player in helium production, announced at the end of December that further increases of 20-30% are expected in 2008.

All of this bodes ill for the already floundering US economy. Increases in the cost of helium will likely affect the fields of medical imagery, manufacturing and research. Eventually that will impact millions of Americans, raising the prices of medical care and manufactured goods as the cost increases are passed on. Furthermore, companies may be forced to lay off workers as helium supplies decrease and production drops. The shortage of helium and subsequent price increases may not be this country's biggest problem, but if the trend continues this issue will have a serious negative effect on our economy.

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