Helium Sales Legislation Would Impact Panhandle

At Wally’s Party Factory, a 32-store chain based in the North Texas town of Ennis, balloons no longer contain 100 percent helium — the total is down to 60 percent — and an additive is pumped in to help certain types float better.

“We’re doing a lot more to conserve the helium than we did in the past,” said Jonathan Erwin, the chain’s vice president and general counsel.

Such adjustments are one of the lighter indicators of a worldwide helium shortage. Experts say the scarcity could have significant implications for the space, high-tech and medical industries, where helium’s uses include M.R.I.’s. In a worst-case scenario, which is unlikely, the world could run out of helium in a century, said Chip Groat, a geology professor at the University of Texas at Austin.

To address the problem, Congress has proposed legislation that could have a significant impact on the Texas Panhandle, where the federal government operates the world’s largest helium production facility.

Roughly 30 percent of the helium supplied globally each year comes from a site 20 miles northwest of Amarillo, which calls itself the helium capital of the world. The gas is stored in a natural underground reservoir. An above-ground plant extracts the helium, removes the impurities and enriches it, then pipes it to Kansas for further processing.

Scientists describe helium as a nonrenewable gas, lighter than air and often found in natural gas fields after being formed by decaying radioactive elements. It was first extracted in Texas from Clay County during World War I, when the military began seeking it as a safer choice than hydrogen for some aircraft. An extraction plant was built in the Amarillo area in the late 1920s, and the government established its Federal Helium Reserve there.

In 1996, Congress passed a law to privatize the Amarillo helium by requiring the federal government to sell nearly all of its reserves. But the law expires in 2014, years before the sell-off will be complete. Last week a Senate committee heard testimony about the bipartisan Helium Stewardship Act, which would extend the time period for the sales. Walter Nelson, an official  with Air Products and Chemicals, a Pennsylvania-based helium refiner, warned that without such a move, chaos would ensue, with significant disruptions to industries like semiconductors and fiber optics.

“Imagine the impact on global markets if 30 percent of the world’s oil reserves were off limits,” he testified.

A House version of the bill does not exist.

Sen. John Barrasso, R-Wyo., one of the bill’s sponsors, said the federal government had been selling its helium at below-market prices, thus reducing companies’ incentive to find more helium — and he wants to change that. Even so, rates have been rising. The Bureau of Land Management, which runs the reserve, has announced that prices will rise 11 percent for the next fiscal year.

Could more helium be found in other oil and gas fields in Texas, like the Eagle Ford Shale? Groat said that seemed unlikely. The uranium veins in South Texas are relatively new, he said, and the radioactive decay needed to create helium “is associated with very, very old rocks.”

Instead, Groat said, future supplies may come from the Middle East and from other Western states.