BY DAN CANCIAN ON 5/10/19 AT 11:00 AM EDT www.newsweek.com
A major shortage of helium has begun to make its impact felt across a number of industries, as a combination of dwindling resources and increasing prices take their toll.
The gas, one of the lightest substances in the world, can be harvested from natural underground deposits and from the production of natural gas, in which helium is a by-product. But there are currently no cost-effective ways of artificially producing the gas, which has left a host of sectors scrambling.
While helium usage is widespread, its sources are relatively limited, and the U.S. has provided the lion’s share of the world’s supply for decades. According to Gasworld, more than three-quarters of the globe’s helium is produced across three different locations—Texas, Wyoming and Qatar.
The U.S. will exit the helium business by the end of September 2021, as established by the Helium Stewardship Act of 2013. Also, resources in Texas have dwindled because of a combination of different factors.
Helium production in the U.S. has significantly slowed down and the Bureau of Land Management has been forced to ration its supply, due to political upheaval in the Gulf States
In February last year, Saudi Arabia imposed an economic embargo on Qatar, which effectively took some 30 percent of the global supply off the market.
While helium might be best known as laughing gas and for its use in balloons, it plays a crucial role in a number of different industries, from the aerospace to the medical sector.
It is used in the manufacturing of electronics and semiconductors, and is also used as a cooling agent for magnetic resonance imaging machines.
“It is a serious problem,” Roman Dembinski, an organic chemistry professor at Oakland University, told USA Today. “A shortage and disruption would quench our magnets, so we would be without instruments.”
Experts noted that demand from countries such as China was increasing and the growing development of high-tech manufacturers had also put producers under pressure.
With resources shrinking and demand increasing, prices have sky-rocketed. In September, a government auction carried out by the Bureau of Land Management saw crude helium prices for delivery in 2019 jump 135 percent year on year.
The global shortage has hit a number of companies. Chief among those is Party City, which announced on Thursday that it would close 45 stores, accounting for 5 percent of its locations
The New Jersey-based party supplier said it normally shuts between 10 to 15 stores each year, and the latest round of closures came as it aimed to improve its market performance.
“We’ve made the decision to close more stores than usual in order to help optimize our market-level performance, focus on the most profitable locations and improve the overall health of our store portfolio,” the company’s chief executive James Harrison said in a news release
Harrison, however, also indicated Party City had secured a new helium supplier, which should minimize the fallout from the current shortage.”We believe this new source should substantially eliminate the shortfall we are experiencing at current allocation rates and improve our ability to return to a normal level of latex and metallic balloon sales,” he said.