Atlantic Cities

Inflation in the Helium Market Could Cause Holiday Parade Prices to Rise

Inflation in the Helium Market Could Cause Holiday Parade Prices to Rise
DrivingtheNortheast

A few years ago, Caroline Choi didn't pay much attention to helium costs. Now she can't help it. "Now it matters," she says. "Clients do not want to pay 10 or 20 percent more for balloon designs."

Choi is the owner of Capital Balloon, a D.C.-area party balloon decorating service, so she's certainly noticed the universe's second-most common element getting more expensive. Recently, she's had to explain the changes in the helium market to her clients, recommending balloon drops instead of balloon arches, encouraging designs that are lighter on helium. "To them, balloons are balloons," she says. "I have to explain to them why it's more expensive."

The price of helium is rising faster than the gas-filled balloons themselves. In 2009, the U.S. Bureau of Land Management was selling one thousand cubic feet of the noble gas for $64. In 2010, for $75. As of October 1, the price is $84 per thousand cubic feet. That's nearly double the federally set 1996 price of $47.

Helium demand worldwide has nearly doubled in the last 15 years, with particularly strong growth in Asia. "There's far more demand than there has been supply," says Samuel Burton, assistant field manager of helium operations at the BLM's facility in Amarillo. "There are some who claim we're not charging enough." (It's hard to tell exactly what the market price is of helium since the U.S. government controls about 60 percent of the supply.)

Most of the demand for helium is in superconductors, fiberoptics, MRIs, welding, cryogenics, and rockets, not inflatables.

But of all those uses, party balloons seem the most vulnerable. "Balloons are not food," Choi says. "They can have a party without balloons."

With helium nearly twice its 1996 price, it's hard to imagine another Cleveland Balloon Launch. (That 1986 incident, which set the World Record for balloons launched in one place, also had some environmental fallout.)

So what about the most treasured civic balloon event of all, the Thanksgiving Day Parade?

We have nothing to fear, says Orlando Veras, a spokesman for Macy's. As an annual event, the Parade is insulated from the periodic shortages that have affected scientists and other small-scale users of helium in recent years.

Initially, in fact, the Macy's Thanksgiving Day Parade didn't use helium at all. Tony Sarg, the puppeteer and Macy's window designer who designed the first parade balloons in the 1930s, envisioned the "floating" icons as "upside-down marionettes." Rather than strings to keep the balloons from flying away, marchers carried sticks to hold them up. The innovation of helium balloons changed that prototype.

Veras wouldn't discuss the event's costs, but he did say that they have been able to reduce helium use: "We’ve worked to design our balloons to use various combinations of helium and air." The availability of lighter, stronger fabrics mean that it now takes considerably less helium to hold up a balloon than it did several decades ago. (The average Macy's balloon currently weighs around 300 pounds before helium.)

He did say the parade uses 400,000 cubic feet of helium, divided between a series of balloons that range from five to 15,000 cubic feet. An order of 400,000 cubic feet of helium from the BLM stockpile costs $33,600 today, up from $18,800 in 1996.

It's not demand that's to blame for today's high prices -- it's scientists. The current price increases are the recommendations of an influential 2010 report, "Selling the Nation's Helium Reserve," put together by the National Academy of Scientists.

If the price were decided by demand, it would probably be much higher. The BLM has no trouble selling its annual offering of 2.1 billion cubic feet. The low price is a holdover from the Helium Privatization Act of 1996. At the time, $47 was a high price designed to encourage private industry to mine helium. But booming demand quickly turned it into a price ceiling.

"Gas companies would buy the helium reserve, turn around, and resell it," says Moses Chan, a physics professor at Penn State University. He's testified before Congress on the subject, and says that although helium prices affect scientists too, shortages are worse.

"When you have the choice of not doing an experiment at all, or doing experiments, we're willing to pay a higher price. In a way the price had to go up, because we have to encourage people in the industry to recycle. If we do not recycle, it's a question of between 30 to 60 years, there will be no helium."

No helium? Well, not quite -- there will be no more helium-rich natural gas deposits, where helium presence can run as high as one percent. In the air, helium is closer to one part per million. Nobody has found a way to viably and efficiently collect airborne helium.

"I don't want to say that I am a grouchy guy and I don't want kids to be happy," Chan says of advocating for higher helium prices, "I love to watch the Macy's Day Parade, but life is hard!"

Top image: Flickr user DrivingtheNortheast.

Henry Grabar is a freelance writer and a former fellow at The Atlantic Cities. He lives in New York. All posts »

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