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The world is facing helium shortage 4.0

REUTERS/Murad Sezer
Maybe this celebration was a bad idea.
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Global helium supplies are running low. Again.

Helium—the second most common element in the universe—isn’t just the key ingredient that makes party balloons float. It cools MRI machines and scientific equipment, enables semiconductor manufacturing, and lifts weather balloons allowing meteorologists to make forecasts.

Because of the shortage, the US National Weather Service is curtailing weather balloon observations, scientists are shutting down experiments, and the University of Nebraska football team has announced it will (tragically, heroically) stop releasing hundreds of red balloons every time it scores a touchdown to ensure the school’s medical system has enough helium to keep treating patients.

This is the fourth worldwide helium shortage since 2006, one the gas industry has dubbed “Helium Shortage 4.0.” Like Helium Shortages 1.0, 2.0, and 3.0, this crisis was caused by a handful of unexpected supply disruptions in the heavily concentrated helium production industry. But ultimately, all four shortages trace their roots back to an ill-fated decision by the US Congress to privatize the US National Helium Reserve in 1996.

A gas leak, a fire, and an explosion

Helium is produced as a byproduct of natural gas refinement at 14 plants around the world. Over the past few months, disasters have struck the largest of these plants, disrupting supply and creating a helium shortage.

A January gas leak forced a US helium plant in Cliffside, Texas to shut down for emergency repairs. Four months later, the plant remains closed, knocking out about a third of the world’s helium supply. At the same time, Russian fuel giant Gazprom completed a massive new helium plant in the far eastern city of Amur in September—but an Oct. 8 fire and a Jan. 5 explosion badly damaged the plant, forcing it to shut down until at least the end of 2022.

Industry analysts had hoped the Russian plant at Amur—which could have produced up to three times the world’s annual helium consumption—would help ease the world’s recurrent helium shortages. But whenever the plant reopens, US-led economic sanctions punishing Russia for its invasion of Ukraine will make it tricky for Gazprom to sell helium outside of Russia and China.

To exacerbate the problem, two of the three helium plants in Qatar, which produce about a third of the world’s helium supply, shut down for routine maintenance in February and March, although they are back online now.

The US privatizes the National Helium Reserve

Until the 1990s, the US maintained a massive strategic stockpile of helium. But the stockpile was expensive to maintain, so as a cost-cutting measure, the US Congress passed the Helium Privatization Act of 1996, which forced the federal government to sell off its helium reserves at below-market prices.

Because the US government was flooding the market with cheap helium, private industry had no economic incentive to expand helium production or recycling projects that would have increased supply. Meanwhile, the explosion of consumer electronics lead to increased demand for helium in semiconductor manufacturing. By 2006, demand exceeded supply and the world entered Helium Shortage 1.0.

Over the past 16 years, the global economy has faced frequent helium shortages as private industry struggles to increase helium production to meet demand. Congress passed a new law in 2013 which slowed the sale of US helium reserves and allowed the federal government to auction the gas for market price, in an effort to stop distorting the helium market and give private companies an incentive to build new plants.

Now, the final sale of US government helium is scheduled for September. After that, the federal government will sell its helium facilities and the world’s helium supply will finally, fully be in the hands of the private market.