The Helium Cliff: Will Government Gridlock Send Prices Skyward?

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Balloons floating through dark sky
Alamy
We've had college loan cliffs and tax cliffs, fiscal cliffs and global growth cliffs. And this October, unless Congress moves quickly, it looks like we're going to float over the latest precipice: the helium cliff.

While the idea of helium going bust may sound a little silly, it happens, it'll be no laughing matter: In addition to spelling an end to party fun for millions of little kids, a cut in helium production would be economically devastating. The noble gas, which has the lowest melting and boiling point of any element, is routinely used in hospitals, rockets, manufacturing centers, research labs, and hundreds of other businesses. There's already a shortage, which has pushed up prices. If we go over the helium cliff, they would likely soar through the roof.

The big problem lies in where America's helium comes from. Currently, 42 percent of the crude helium consumed by the U.S. is produced by the Amarillo Field Office of the Bureau of Land Management. Amarillo, in turn, gets its helium from the Federal Helium Reserve. (Yes, that's a real thing. No, it's not staffed by people clown suits.) A collection of huge natural gas fields in Texas, Kansas and Colorado, the reserve pumps out 5.8 million cubic feet of helium per day, 2.1 billion cubic feet per year.

According to the BLM, helium prices are high due to several factors, including routine maintenance at several production facilities, as well as the delayed opening of a new plant in Montana.
Soon, however, things may get worse: As The Washington Post's Lydia DePillis reported on Friday, a 1996 law called for the shutdown of the Federal Helium Reserve after the reserve paid off the costs of its creation. That milestone will pass this October.

It's not like Congress isn't aware of the pending helium disaster: For the last few months, the Senate and House of Representatives have both had bills on the table that would keep the reserve running. Unfortunately, though, neither house has bothered to schedule a vote, and the clock is running out.

Admittedly, Congress will probably deal with the helium cliff before October. They'll probably pass legislation to keep the reserve open, prices (relatively) low, and helium flowing to the businesses that need it. In a few months, if all goes well, this cliff will prove to be a nothingburger of a story, a little scare that went nowhere.

The trouble is, if last few years of obstructionism in Washington are any indication, companies that rely on helium can't count on Congress to get its act in order by the October deadline. Until legislation is passed to keep the reserve open, businesses have to work on the assumption that helium prices are going to skyrocket -- and that they'll need to find alternate sources for the vital gas. In other words, this is yet another example of an issue where pointlessly partisan legislative gridlock may well create a big problem by refusing to deal with a little one.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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jlm9

Whatever Congress does, and they don't do much other than go on leave..but when they do, they don't read the bills, they don't care how their votes impact the country and they certainly don't care about what their constituents want..so why would this rise in price be different from everything else they made more expensive for us..

August 05 2013 at 2:08 PM Report abuse +1 rate up rate down Reply
worried man

OMG a helium balloon about to burst

August 05 2013 at 12:53 PM Report abuse +1 rate up rate down Reply
Ron

The real problem is , the House and senate are full of idiots and morons. Everyone thank theirs are fine so they keep voting them in.

August 05 2013 at 11:49 AM Report abuse +2 rate up rate down Reply
steph3221

go figure

August 05 2013 at 9:55 AM Report abuse rate up rate down Reply
markruck

So it appears the gasbags in Congress can't deal with a problem involving gas. How ironic.

August 05 2013 at 9:30 AM Report abuse +2 rate up rate down Reply
mjeffries10

Nonsesense!! The Universe is 1/4 helium.. It is the byproduct of solar fusion... That's obviously why all the planets float around in outer space....

August 05 2013 at 7:23 AM Report abuse -1 rate up rate down Reply
1 reply to mjeffries10's comment
vanvorous

LOL...your lack of an adequate physics and chemistry education is showing. Hydrogen is being the primary space gas and via fusion Helium is formed. As to planetary float in space try zero gravity in space...

August 05 2013 at 11:31 AM Report abuse rate up rate down Reply
Sonya Mebane

Maybe John-Boy will let them vote on it after they repeal the Affordable Health Care Act for the 38th time? Tell me again how that is creating the jobs they promised.

August 05 2013 at 6:49 AM Report abuse +2 rate up rate down Reply
Chris Smith

As a car salesman I am thrilled about the price of helium. I haven't had to blow up balloons in over a year, and amazingly enough I still sell the same amount of cars without them!

August 04 2013 at 9:45 PM Report abuse -1 rate up rate down Reply
Coopbbmfic3

Drill Baby Drill

August 04 2013 at 8:44 PM Report abuse -4 rate up rate down Reply
nascrguy08

It boils down to a simple solution, vote all lawyers completely out of office and vote in common sense individuals.

August 04 2013 at 8:31 PM Report abuse +2 rate up rate down Reply