(Updates to show U.S. Senate vote to keep reserve open)
By Nina Chestney
LONDON, Sept 19 Producers of high-tech products
from MRI scanners to semiconductors are breathing a sign of
relief after U.S. lawmakers acted on Thursday to prevent the
shutdown of a 90-year-old helium reservoir in Texas.
The U.S. Senate vote was hardly a squeaker, at 97-2, to keep
the Federal Helium Program running past its scheduled closure on
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 U.S. 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 U.S.
reservoir a vital source.
The U.S. Federal Helium Reserve has been providing around a
third of global crude helium and 40 percent of U.S. 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 $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 U.S. 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.
ANTICIPATORY PRICE HIKES
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 $25-$30 per litre from $8 last year.
"There is no question the situation is challenging. We are
having to look at different sources of helium, not just the U.S.
supply, and have invested $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 U.S. sites.
Using other gases instead can result in poorer quality goods
or require costly and unproven re-fitting of processing or
"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 U.S. House Committee on
Natural Resources earlier this year.
ON A CLIFF EDGE
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 percent of
research budgets so further price rises could be crippling.
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
Annual global production of helium was nearly 175 million
cubic metres (mcm) in 2012, according to the U.S. 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 percent 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 U.S. reserve is important because other countries'
supplies, such as Qatar, Russia and Algeria, are still too
erratic or not large enough to cover the U.S. shortfall.
Qatar could potentially supply around 20-25 percent 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
Algeria already supplies 10 to 15 percent 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 percent of global
helium production, according to Ernst & Young, but it needs to
build a lot of gas infrastructure in Siberia to enable its
output to equal that of the United States by 2022-2025.
(Additional reporting by Ros Krasny in Washington; Editing by
Jane Merriman and Leslie Adler)