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Helium shortage weighs on users big and small
Commodities » From party balloons to machinery, government’s hold on prices has an impact.

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From federal to private • These scenarios all trace back to tight helium supplies.

At a glance

A look at helium

Uses » MRI magnet cooling, medical lasers , aerospace arc welding, computer chip manufacturing

Produced » From natural gas deposits mostly in Texas, Oklahoma, Kansas; Utah production has been halted

Properties » An inert, nonflammable, nontoxic gas; coldest liquid known, doesn’t become radioactive

Availability » Supplies are tight due to government controls and congressional inaction on potential remedies; older helium plants are not producing at full capacity, and new ones have been delayed.

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The Texas panhandle is the nation’s top-producing area for helium, which is a byproduct of natural gas extraction. A handful of other states are producers, but the Bureau of Land Management operates and maintains the nation’s helium storehouse, called the Federal Helium Reserve, near Amarillo, Texas.

Utah’s lone production facility, near Moab, has been idled for reasons that are not clear. Representatives of plant owner Patara Oil & Gas LLC, headquartered in Houston, did not respond to requests for comment. Refining facilities in the area are relatively small and have contributed only a tiny fraction of domestic production.

Experts testifying before the Senate committee in May said the shortage can partially be traced to congressional efforts to get out of the helium business, and to private industry’s not picking up the slack.

Although Congress had decreed for decades that the federal government keep a helium reserve, lawmakers have reversed course. In 1996, Congress mandated that government helium supplies were to be sold off by 2015 in an effort to privatize the federal program.

"The hope was that once the reserve was sold off, new private sources of helium would be online, but that hasn’t happened yet," said Joe Peterson, the Bureau of Land Management’s assistant field manger for helium in Amarillo.

Although new private helium production plants have come online — including a plant in Wyoming — businesses have not been able to produce enough to meet demands. The BLM attributes this to older private plants not producing at full capacity, construction delays in newer plants and to natural gas pricing, which impacts helium production.

Until more companies begin producing helium, consumers of every stripe will be left with spiking prices and tight supplies, according to a story in the June edition of Popular Mechanics .

The U.S. Senate is considering a bill, the Helium Stewardship Act of 2012, that would extend the 2015 deadline for the federal helium sell-off and allow the government to continue supplying helium, selling it at market prices. But the bill, introduced in April, is stalled in Congress — and that has industrial customers worried.

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Industry in a lurch • Without congressional action, the government’s Federal Helium Reserve will close. The facility is to be shut down once the reserve runs out of supply or the reserve’s $1.3 billion debt, incurred over 50 years in building up the nation’s helium stockpile, is repaid by the federal government. Some involved in the debate have predicted that the debt could be repaid by the end of this year — forcing the start of the mandatory shutdown.

The reserve accounts for 50 percent of domestic helium supplies and 30 percent of the global stockpile.

"If 30 percent of global supply went offline, industry could be negatively impacted," said Dan Francisco, spokesman for Micron Technology Inc. "Obviously, Micron supports any legislation that will help prevent any helium shortage."

Micron, the largest U.S. maker of computer-memory chips, and Intel Corp. are joint owners of the IM Flash Technologies plant in Lehi. The facility, which employs about 1,600 people, produces wafer-like chips that hold memory in electronic devices.

Helium is used in a number of steps to produce the computer chips. Fransisco said semiconductor companies have been working to develop alternatives to helium, "but right now, there is nothing."

Chip companies already are reporting limits on helium supplies and substantial increases in prices, according to the Semiconductor Industry Association, a trade group. SIA is pushing for the government to keep the helium stockpile open and for "the [Obama] administration to make this a priority during the lame duck session."

Industrial customers could acquire helium from Russia, Algeria and Qatar, but that would increase costs, putting U.S. manufacturers at a disadvantage.

Denver Feltenberger, owner of Arc Angel Welding in Sandy, learned about the shortage the hard way.

He had to put a repair job on hold for three weeks "while I begged and borrowed and did whatever I could to locate some helium. I’m lucky, though, because most of my work is in ferrous metals. The helium shortage has affected only 5 percent of my business. Otherwise I’d be in trouble."

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