Health care and semiconductor companies urged the White House to delay the auction of the federal helium system in Texas. But last month a private company was named the highest bidder.
The way we get helium — which is used for everything from lifting rockets and balloons to cooling nuclear reactors and the machines used in an estimated 40 million M.R.I. scans done each year across the country — is about to change because of an auction of the federal helium reserves.
The United States last month auctioned off its federal helium reserves, which are near Amarillo, Texas, to a private company, raising concerns that supplies of the substance could be disrupted.
Representatives from medical technology, aerospace, compressed gas, semiconductor and technology industries have called on the Biden administration to delay the sale.
Helium is essential in hospitals, computers and rockets
Helium cools down the magnets used in M.R.I. scanners. It also cools nuclear reactors, is used in semiconductor chip manufacturing, and lifts rockets. Among its most familiar uses, balloons represent only a small portion of the demand.
Helium, a byproduct of natural gas extraction, occurs naturally from radioactive decay in the Earth’s crust.
Why is the government selling off helium?
The United States is the world’s largest producer of helium.
In 2020, the Bureau of Land Management, the national public lands agency, said it was auctioning the federal system to comply with the 2013 Helium Stewardship Act, which required the government to sell its helium assets in a privatization initiative.
The move was meant to remove the government from the marketing process and “allow the private sector to further develop this industry to meet the supply needs of the United States, creating a sustainable economic model and jobs for Americans,” William Perry Pendley, the agency’s deputy policy director, said in a statement.
The auction kicked off in July 2023, putting helium stockpiles, storage, natural gas wells and 432 miles of pipelines from Texas to Oklahoma and Kansas on the block. On Jan. 25, the bids were unsealed, showing that Messer LLC, a domestic subsidiary of the German industrial gas business Messer Group, was the highest bidder.
The government has up to 130 days to accept or reject the bids.
Asked about supply concerns, Messer said in a statement: “We understand the importance of maintaining consistent, reliable operations of this vital resource.”
There are fears about a ‘supply chain crisis’
Supply chain issues have been at the heart of debates and lobbying efforts around the helium supply, especially when it comes to M.R.I.s.
Phil Kornbluth, a consultant in the helium industry, said the industry had faced “nine years of shortages since 2006.”
The Compressed Gas Association, a trade group representing industries that rely on helium, urged the White House in January to delay privatization because of what they called a possible “supply chain crisis” that could disrupt the availability of helium, forcing companies to find substitute providers.
“Any disruption in the supply chain would cause U.S. dependence on a country in the Mideast, a region in the midst of both war and attacks on shipping,” Rich Gottwald, the trade group’s president, said.
“From computer chips to medical imaging to the energy sector, helium is vital,” he said. “This poorly structured and ill-timed sale would make lifesaving M.R.I.s less accessible, the chips that connect everything from computers to cars to airplanes less available and would have an immediate impact on America’s national security.”
Premier Inc., a North Carolina company that supplies more than 4,350 hospitals and health systems, is discussing alternatives such as whether hospitals can use CT scans instead in some cases, or whether to prioritize clinics that have the only M.R.I. machine for miles around.
“We are thinking ahead of the curve,” said Soumi Saha, senior vice president of government affairs. “Our goal is to ensure that this never becomes a problem.”
Scott Whitaker, the president of the health technology company AdvaMed, said the government needed to address concerns about supplies for M.R.I.s.
“Timely, critical patient care would suffer if helium supplies constricted further,” Mr. Whitaker said.
In October, trade groups representing the semiconductor, aerospace and medical imagining and technology industries also called for a delay.
But despite the concerns, the Department of the Interior said in a reply to questions on Wednesday that the sale “is not expected to meaningfully change the availability of helium.” The government has not said it would delay privatization.
Helium shortages seem unlikely
Already, shortages have been easing since the second half of 2023 amid a dip in demand from the chip industry, and major changes in helium supply would not be likely in the short term during the government review.
“We could be returning to a tight balance between supply and demand sometime this year,” Mr. Kornbluth said.
The global outlook suggests more plentiful supply in the future, with a project by Gazprom, Russia’s huge natural gas producer, up and running since September and a plant in Qatar expected to come onstream in 2027.
Institutions have been urged to find ways to work around the uncertainties. During a shortage in 2022, the National Science Foundation told researchers to apply for funding for equipment to recycle or reuse helium
Joseph DiVerdi, a chemist at Colorado State University, said the shortages have put pressure on researchers to find alternatives. In his own laboratory, they switched from helium gas to hydrogen gas for a chromatography project.
“We engineer solutions,” he said. “So I am an optimist. But in the meantime we are going to have our feet in the fire.”