Econ 201 Helium Shortage

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Irvin Morales
Econ 201
Dr. Popp
10/25/12
Helium Shortage
The second element on the periodic table; He, also known as helium, is a gaseous element that is located somewhere in the sun’s atmosphere and deep underground in some natural gasses (Helium 2012.) Helium can be refined and later stored in tanks to be sold to the market. But where exactly does the helium go after it has been refined? And in what state of matter does Helium sell at the most? It is unknown to many, but helium is actually used for more than just blowing up balloons for birthday parties.

Helium is rare because there are no biosynthetic ways of making it, and all the helium that we currently have in the world is a result of the decaying uranium and thorium (Helium 2012.) It is also the most stable element in the world (Global 2007) and when its temperature hits below 4.2 Kelvins or four degrees higher than absolute zero, helium reaches its liquid state and it reaches one of the coldest points an element can ever reach. This is why helium is mostly used as a coolant. When liquid helium is put next to another object, the other object’s energy is rapidly being extracted which cools the object down. This technique is applied when cooling the magnets of MRI machines as well as cooling the magnets of nuclear magnetic resonance, NMR, machines which are used to map the chemical structure of molecules (Campoy 2007.) Clearly helium plays an important role in the science industry as it can be used in research to find cures to deadly diseases, create new sources of energy and answer questions about how the universe was formed, because when it is depressurized and at its liquid state it is the coldest liquid on earth and it can resemble conditions in outer space (Campoy 2007.) Not only that but it is also important in mass spectroscopy welding, production of computer microchips, fiber optics, liquid-fuel tanks of rockets and missiles as well as many other technological means. Helium is used in large amounts every year to pressurize space shuttle fuel tanks (Helium 2012.) As noted, the use of helium exceeds that of raising hot air balloons, party decorative balloons and people’s voices, it is very important to science and this limited resource is in high demand.

The US government began regulating and running the helium industry in the early 1920s and had continued to run it for about 70 years, but since the mid-90s the reign was passed over to the oil and natural gas industries (Helium 2012.) In the 1925 when blimps and other airships seems like promising and useful military necessities, the US government set up a national helium program to ensure that the government had enough supply for their defense’s demand and called this storage facility the Bush Dome. This reserve had become the world’s largest supplier of helium; however that was in no means the government’s intention (Global 2007.) In the 1960s the government opened the Federal Helium Reserve in the Hugoton-Panhandle Gas Field that spans over 11,000 acres of land across Texas, Oklahoma and Kansas (Plumer 2012.) As soon as private demand exceeded that of the federal government’s, in 1996 the Republican-led congress passed the 1996 Helium Privatization Act, which intended the reserve to supplement the production of helium for private sectors (Global 2007.) Another initiative that the Act called for was the Bush Dome’s sell off by the year 2014.

According to a report done by the National Research Council, the Federal Helium Reserve provides about- one third of the world’s helium each year. At a slow rate this helium is soon going to be gone and by law, the reserve could potentially run out of money and then the helium could stay locked up in the reservoir, and no one will have access to it. Although it is not noticed much, the price of helium is slowly rising every year in fact it seems to be rising faster than inflation (Figure 1). People are being limited on the amount of tanks of helium that...
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