The US has stockpiled helium at the Federal Helium Reserve since 1925 © Joyce Marshall/Fort Worth Star-Telegram/Tribune News Service via Getty Images
The US has stockpiled helium at the Federal Helium Reserve since 1925 © Joyce Marshall/Fort Worth Star-Telegram/Tribune News Service via Getty Images

Helium supply crunch looms as US alters storage strategy

23 February 2022

A vital helium reserve in the US that supplies the global market will stop selling to the public in September 2022, threatening a supply crunch.

The US government has owned up to 1bn cubic meters of helium gas in a Federal Helium Reserve (FHR) – managed by the Bureau of Land Management (BLM) – since 1925. It is now disposing of its remaining helium and assets by transfer to other federal bodies and public sales.

The end of public sales in September, alongside major incidents at a helium factory in Russia – a key supplier – and tensions with Ukraine, mean prices are expected to skyrocket.

Tom Kool, head of operations at price-tracking website Oilprice, said: “A helium supply crunch may be growing more critical with each passing day… The world is quickly coming to grips with one of the biggest supply squeezes of our times.”

Helium gas prices have risen dramatically since 2019, when the US government sold at a rate of $280 per thousand cubic feet (Mcf). Now that figure has more than doubled, selling for up to $600/Mcf.

The US produces 40% of the world’s helium supply, with the majority coming from the FHR. The FHR has reserved all helium found on federal land since 1925, and purchased crude helium extracted by natural gas producers for storage at its facility in Amarillo, Texas. This purchasing policy accumulated 1bn cubic meters of helium by 1995 and led to the reserve being $1.4bn in debt.

The FHR is currently the only helium storage facility in the world and has sold crude helium to private companies since 1996, often at below-market prices, in order to clear the debt.

The FHR was established to provide gas for airships and in the 1950s supplied the goverment with coolant for the Cold War and Space Race. 

William Perry Pendley, deputy director for policy and programs at the BLM, said in 2020: “Now it is time for the US government to remove itself from the helium business, 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.”

As the disposal deadline approaches, however, other global issues are forcing helium prices higher. A fire and an explosion at one of the world’s largest natural gas processing facilities in Amur, Russia, means helium production at the facility will stop for at least six months. Ongoing tensions with Ukraine are also likely to impact Russian production, which is the fifth largest helium producer in the world, according to the US Geological Survey.


Phil Kornbluth, president of Kornbluth Helium Consulting, called the helium supply chain ‘complex’ and ‘highly unpredictable’ in an article for Gasworld in January. Concerning the Amur explosion he said: “Helium markets are now likely to remain tight throughout 2022, with the transition to plentiful supply pushed out by at least one year to 2023.”

Helium is mostly used for its cooling properties, for example in MRIs, but also plays a significant role in producing hard disk drives and semiconductor chips.

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