Tank Talk: Helium distributor addresses industry
Helium supplier addresses state of turbulent industry
The words “helium shortage” are all too familiar to balloon retailers. Although some stabilization has occurred the past couple of years, availability and cost are still concerns going forward.
The Helium Stewardship Act of 2013 was designed to boost market competition by deregulating the price of helium sold from the National Helium Reserve to private companies by implementing an auction system instead. The move’s effectiveness has received mixed reviews from experts and legislators, as the number of companies purchasing from the reserve has actually decreased. The National Helium Reserve in Texas, which is expected deplete around 2020, accounts for roughly 40 percent of the U.S. helium supply.
Terry Wilder, vice president of operations at Geer Gas in central Ohio, thinks the worst is behind us, however. Wilder cited feedback from other industry professionals and noted the findings of researchers, who discovered dissolved helium in groundwater after examining 22 wells in the U.S. and Canada. Lead researcher, Diveena Danabalan of Durham University, said conditions are good for harnessing the helium.
“This means that in certain geological regions, groundwater transports large volumes of helium into natural gas fields, where trapping potential is greatest,” Danabalan said in a press release in August. “On a continental scale, and we are talking about a line running right down the Rocky Mountains, we are seeing processes which are releasing the existing helium which has been built up deep underground over hundreds of millions of years.”
Wilder offered some insight to Party & Paper Retailer on the state of the helium industry.
PPR: Have you had any trouble meeting the helium demands of your customers in recent years?
TW: We have been operating under full stocking levels for the past several years. We have not limited our helium supply to our customers since the third quarter of 2012. Even then, we provided customers 100 percent of their previous year’s usage and only set limits to discourage the stockpiling of cylinders by our end users.
PPR: Do you anticipate any more shortages in the near future?
TW: Everything we have seen and heard within the industry is that helium-stocking levels are high and readily available in our region.
PPR: Do you expect the cost of helium to continue to rise for retailers, or do you feel like things have leveled off?
TW: After the helium shortage in the early 2000s the price of helium did increase dramatically. There was another less impactful shortage approximately four years ago that also caused prices to surge. However, over the past couple of years our pricing has stabilized and we have even been able to lower our price to our customers. We believe that increases in the near future should be nominal and based on business factors other than supply.
PPR: How does the status of the National Helium Reserve in Texas play into all this?
TW: Being that it is a non-renewable natural resource, helium use and supply will always have global implications. The BLM (Bureau of Land Management) for many years has said it wants out of the helium business, which only leads to more questions and concerns rather than solutions. New studies released last year show the potential for great, untapped resources of helium in northwestern United States and in Canada. Hopefully, as this is further explored, the fear that we are extinguishing the helium supply will diminish.
PPR: What is the most common mistake made by customers?
TW: The most common mistake we encounter with our customers is they fail to realize they are low on product and wait to call until it is a crisis situation for them, which in turn puts pressure on our distribution model to meet the needs of our customers. Placing this as an item on their regular checklists can eliminate frustration for all involved. … A helium regulator with a contents gauge is an inexpensive solution to incomplete or missed orders due to being out of helium.