Tech firms, medical research, get helium reprieve in U.S.

PUBLISHED : Friday, 20 September, 2013, 11:47am
UPDATED : Friday, 20 September, 2013, 11:53am

Producers of high-tech products from MRI scanners to semiconductors are breathing a sign of relief after US lawmakers acted on Thursday to prevent the shutdown of a 90-year-old helium reservoir in Texas.

The US Senate vote was hardly a squeaker, at 97-2, to keep the Federal Helium Program running past its scheduled closure on October 7.

The House of Representatives voted earlier in the year to keep the reserve running, but without action in the Senate panic set in, triggering some frantic lobbying.

More than 100 organisations, universities and companies, including Siemens, Philips, Samsung , and General Electric, wrote to Congress last week urging it to keep the reservoir open or risk a disruption to the US economy, putting millions of jobs at risk.

Helium, best known as a party gas for filling balloons and making the voice squeaky, is also needed for aerospace and defence industries as well as smart phones, flat-screen TVs, medical equipment and deep-sea diving tanks.

The gas, which is the second most abundant element in the universe, is difficult to capture and store, making the US reservoir a vital source.

The US Federal Helium Reserve has been providing around a third of global crude helium and 40 per cent of US supply.

The reserve near Amarillo in Texas was opened in 1925 as a supply of helium for airships and then provided helium in the Cold War and the Space Race.

By 1995 the reserve was US$1.4 billion in debt as a result of earlier purchases of helium from private producers. The debt is due to finish being repaid to the US Treasury by the end of this month, and under current law, funding to the federal program would then have stopped, terminating operations.

Congress’s actions will provide the Bureau of Land Management, part of the Interior Department, with the authority necessary to continue the program and allow for an orderly transition of the federal government out of the helium market.

Helium refiners have already been raising prices in anticipation of its closure, a trend that could now reverse.

GE Healthcare, which uses helium to make magnetic resonance imaging scanners, told Reuters the spot price of liquid helium has jumped to US$25-US$30 per litre from US$8 last year.

“There is no question the situation is challenging. We are having to look at different sources of helium, not just the US supply, and have invested US$17 million in a plant to capture waste helium,” said Richard Hausmann, president and chief executive of GE Healthcare’s global magnetic resonance business.

The company uses around 5.5 million litres of helium a year in its production facility in South Carolina and another 6 million litres a year servicing MR systems at US sites.

Using other gases instead can result in poorer quality goods or require costly and unproven re-fitting of processing or manufacturing machinery.

“If supplies were disrupted for a significant period it could even impact the overall economy,” Rodney Morgan, vice president of procurement at computer memory manufacturer Micron Technology, told a hearing of the US House Committee on Natural Resources earlier this year.

Helium remains liquid at extremely low temperatures, making it ideal for cooling superconducting magnets used in electronics manufacturing and in magnetic resonance imaging machines which help to diagnose diseases.

The cost of helium already makes up to 30-40 per cent of research budgets so further price rises could be crippling.

There is no question the situation is challenging. We are having to look at different sources of helium, not just the US supply
Richard Hausmann, president and CEO of GE Healthcare’s global magnetic resonance business

Some university research projects in Britain were put on hold and brain-scanning equipment was shut down last year due to a helium shortage.

Helium is a by-product of natural gas production but once it is released into the atmosphere it cannot be captured. Demand for helium has risen, driven particularly by Asia’s booming manufacturing industry.

Annual global production of helium was nearly 175 million cubic metres (mcm) last year, according to the US Geological Survey, but demand is forecast to rise to over 300 mcm by 2030.

“Even if the reserve didn’t go offline, things aren’t good at the moment. There is definitely around a 3 per cent shortage. Everything produced is being snapped up,” said Richard Clarke, resources consultant and former helium specialist at the Culham Centre for Fusion Energy in Oxford.

The US reserve is important because other countries’ supplies, such as Qatar, Russia and Algeria, are still too erratic or not large enough to cover the US shortfall.

Qatar could potentially supply around 20-25 per cent of world helium when its two large liquefaction plants reach full capacity. Air Liquide started up a 38 million cubic metre per year plant last month but it is not yet operating at full potential.

Algeria already supplies 10 to 15 per cent of global helium but could potentially provide more if it recovered helium from natural gas export pipelines to southern Europe.

Russia currently accounts for around 3.6 per cent of global helium production, according to Ernst & Young, but it needs to build more gas infrastructure in Siberia to enable its output to equal that of the United States by 2022-2025.