While most people know helium for its voice-changing abilities and use in balloons, it’s actually a valuable gas.
Helium is often used in rocket propulsion systems as well as in supersonic wind tunnels.
For most people, however, helium tanks are useful for blowing up a large number of balloons.
The average cost of helium is around $4.29 per cubic meter.
Here are 10 reasons helium is so expensive.
Why Is Helium So Expensive? (Top 10 Reasons)
1. Shortage
One of the factors driving increased helium prices is the fact that there’s a shortage of helium in the market.
Helium is difficult to obtain, and because of that, there’s always a low supply available.
Supply dwindles further when several rocket projects are occurring in the government, military, or private sector.
Balloon and party stores also take in a lot of helium to fill balloons.
People also buy helium for their own private purposes.
Because demand for helium is usually higher than the supply of helium, this makes the gas particularly expensive.
However, when there’s a shortage of helium, it can make the price skyrocket.
There are several reasons behind helium shortages.
The shutting down of gas refineries during COVID-19 is one of the primary culprits.
Without anyone operating the refinery, no one was producing helium.
Once the last stores of helium were no longer available, it created a bottleneck.
No matter how much refineries produce, they’re still trying to make up for the gap in the market when they weren’t producing anything.
In order for the refineries to catch up, everyone would have to stop needing and using helium for a while.
Considering all the uses that helium has, that’s virtually impossible.
As such, the refineries will continue to struggle to meet demand, and prices for helium will continue to be high.
Helium is expensive because there’s a shortage of it in the market.
2. Rare Resource
Helium is a gas but it comes from a natural resource.
When radioactive elements start to decay, they give off helium.
Gas refineries capture that gas and process that into the helium people use today.
It’s also captured when drilling and refining oil.
In particular, helium comes from uranium and thorium decay.
The problem with helium is that it occurs rarely.
While there’s technically an abundance of it, particularly in the stars, it takes a long time to collect it.
Uranium, in particular, takes a very long time to decay.
It only ever produces a small part of helium over time.
To make harvesting helium worth it, refineries have to tap into the uranium or thorium on a wide scale.
This allows them to collect a larger amount of helium which they can then sell.
However, because of the low amount that uranium produces, helium is only ever in short supply.
Even when refining oil, a small amount of helium is produced.
That’s because not all oil refineries end up tapping into something radioactive.
Since helium is so rare, the supply isn’t ever going to reach the demand for it.
It also means that there are frequent shortages of helium when demand surges past supply.
Because of the complexity involved with producing helium, it’s difficult for refineries to increase supply without also taking on huge costs.
Either way, the price of helium is going to be expensive.
Helium is expensive because it’s a rare resource.
3. Gas Refinery Separation Expenses
To get helium, gas refineries separate it from natural gas.
It’s essentially a by-product.
While this might seem convenient, it’s actually not.
The process is very expensive both monetarily and energy-wise.
To separate helium from natural gas, refineries use a process called fractional distillation.
This process involves several steps.
It begins by separating solid species and putting the helium through cryogenic cooling.
Then the process separates the helium from liquid hydrocarbons.
One of the most expensive parts of the process is cooling the gas with cryogenic technology.
However, it’s vital because it helps the refinery turn natural gas into a liquid.
This is easier for storage and cheaper as well.
Cooling gas, however, is extremely expensive because it requires a lot of energy.
Separating large particles to make helium is just as expensive.
Storing helium is also expensive because most refineries don’t turn it into a liquid.
That’s because helium is usually condensed for use.
It doesn’t make sense to turn it into a liquid and then back into a gas for use.
Since it isn’t as easy to store, it costs more to store it in its gaseous state.
All these costs add to the price of helium.
When other factors are involved as well, the price becomes even higher.
At its very start, however, helium is expensive because it’s an expensive process to extract it from natural gas.
4. Auction Houses
Businesses don’t get their hands on helium easily.
That’s because the National Helium Reserve is one of the largest suppliers of helium.
Originally, the National Helium Reserve sold its helium to power US airships.
Since then, it’s also sold its crude helium to private businesses and suppliers.
Since it’s the largest supplier of helium, it essentially keeps businesses that rely on helium open.
The problem with the National Helium Reserve is that they use an auction system to sell their helium.
Essentially, they put up some crude helium tanks for sale, and then the highest bidder gets to buy them.
This becomes a problem because auctions always favor the wealthy.
If you don’t have enough money to outbid someone, then you’re going home empty-handed.
That said, it isn’t usually party stores that show up to the auction.
Rather, it’s the middle-men suppliers that they buy their tanks from that go to the auction.
These mid-level suppliers have more cash on hand since they retail the helium to several different buyers at higher prices.
This allows them to earn a tidy profit while still filling their pockets for the next auction.
The problem with auction houses, however, is that they can turn on a dime.
They’re unpredictable.
If two suppliers get into a bidding war, then the price for the helium becomes higher and higher.
As a result, whoever ends up getting the helium, has to charge their own buyers higher prices to make up for the cost.
Helium is expensive because it’s often first sold at auction houses which can drive up its price.
5. Few Crude Helium Suppliers
Another problem that’s impacting the price of helium is the fact that there are only a few suppliers.
The National Helium Reserve is one and BOC is another.
With only a few crude helium suppliers, it means there’s a lack of competition in the market.
When there’s a lack of competition in the market, the businesses are essentially able to set what prices they want.
They don’t have anyone setting prices lower to take customers from them.
Instead, the business can set a price that they want customers to pay.
With no one else to turn to, buyers have to buy at that price or not get any helium at all.
One of the reasons that there aren’t that many crude helium suppliers is that the business itself is expensive to run.
Not many people have the kind of money required to start up a refinery that focuses on helium and natural gas.
The push to steer away from gas and look to more environmentally-friendly energy sources is also pushing future engineers and businesses away from natural gas.
It’s a difficult business to get into and because of that, helium only has a handful of big-time suppliers.
Helium is expensive because, without competition, helium suppliers are able to set high prices for their tanks without opposition.
6. Extensive Use In Several Industries
While most people think of balloons filled with helium when considering the gas, balloons only make up a tiny fraction of its demand.
Most commonly, helium is an integral part of the manufacturing and healthcare industries.
In manufacturing, helium is a vital part of the production process for making smartphones, computers, and other electronics.
In particular, manufacturers use helium to make semiconductors.
It’s also helpful when producing fiber optic cables.
To ensure there aren’t any air bubbles in the product, manufacturers make fiber optic cables in a pure helium environment.
Fiber optic cables allow the quick and easy use of the internet.
It’s also the foundation for modern communication systems.
In the healthcare industry, helium is just as important and integral.
Health experts mix helium with oxygen to make Heliox.
Heliox is a gas that helps reduce the work of breathing.
It’s particularly useful in helping ease patients who are suffering from respiratory distress.
Without it, patients could die.
Another important role helium plays in the healthcare industry is in the use of MRI machines.
Essentially, the MRI machine is unable to run without helium.
Considering that MRI machines scan for things like cancer and brain tumors, it’s an integral part of cancer treatment.
Without an MRI available, someone could be suffering from cancer without knowing it.
This could impact their chances of survival since patients who get treatment early tend to do better at fighting cancer.
Since helium is in high demand in two very important industries, the price for it increases whenever one or both industries need more than usual.
For example, there was a massive shortage of semiconductors during the pandemic.
Helium was in high demand to get those semiconductors made and out of the factory.
The price of helium increased because there was greater demand for it.
The pandemic also made the demand for helium higher in the health industry.
Since COVID-19 is a respiratory illness, Heliox helped patients breathe easier.
Hospitals needed more which meant they, too, increased demand for the gas.
Helium is expensive because two large industries have a high demand for the limited supply that’s available.
7. BLM Plant Shut Down
While other countries may be major exporters of natural gas and helium, the United States has its own helium productions, too.
The problem with the major plant running in the United States is that it isn’t operational.
The Bureau of Land Management has a federal helium plant called the Cliffside Gas Plant.
This plant is responsible for producing and selling crude helium to both the public and private sectors.
They also export natural gas and helium to other countries.
The problem with the Cliffside Gas Plant is that it hasn’t been operational for a few months.
In early 2022, the plant had some electrical problems as well as gas leaks.
The government shut it down for maintenance.
It hasn’t been open since.
In April 2022, there was some news about a new operating contract in the works with Messer.
The new contract will help the plant sell more helium to the private sector.
That said, the plant has still to become fully functional.
This has increased the price of helium because it’s a major helium-producing plant that is no longer operational.
Without it producing natural gas and helium, there’s a massive shortage in the United States.
The limited supply from other plants in the United States is all there is to meet demand.
Because it’s such a limited supply, the price of their helium is high.
Helium is expensive because the Cliffside Gas Plant isn’t operational, which is a major producer of helium for the United States.
8. Restricted Sales
Whenever a helium shortage occurs, certain sellers and regulators will restrict who gets helium.
In most cases, balloon and party stores get the smallest amount of helium.
That’s because helium plays an important role in cooling semiconductors and MRI machines.
MRIs, in particular, are useful for determining the health status of an individual.
It can detect whether someone has cancer or another problem within their body.
Because of its use in the healthcare industry, helium tends to go to MRIs instead of party stores.
This makes helium at party stores expensive because they’re already facing a shortage.
When there are restrictions in place, it makes the shortage even worse for them.
Some party stores and balloon stores run out of helium and have to fill their balloons with regular air instead.
This becomes a problem when they have a customer who needs their balloons to float.
A special occasion for a first, a 30th, or even a 50 birthday can have plans waylaid when they discover that there aren’t any helium balloons available.
This makes party store helium more expensive because they lose out on business.
Their customers want balloons, and when they can’t get them, they either go somewhere else or do without.
Since the party store isn’t getting a profit from balloon sales, they have to increase their prices on other items to make up for the loss.
Those that do have helium have to ration it.
To do that, they put a high price on it to ensure that customers who only really need helium pay for it.
Helium is expensive because party stores and balloon stores face even more restrictions during a helium shortage.
9. Lack Of Recycling
Because helium evaporates and enters space, not a lot of people think about recycling it.
However, helium is 95% recyclable, and the fact that its users don’t recycle it is also adding to the price of helium.
By venting the gas and capturing it before it disappears into the environment, scientists, party centers, and other users can save a lot of helium.
By recycling it, they’re able to make their supply of helium last longer.
Recycling, of course, comes with its costs.
Scientists would have to build a device that would enable them to capture the gas whenever they use it.
That adds cost to their already expensive experiments or business.
However, they’ll save on costs by using recycled helium instead of having to buy new helium every time.
Most users don’t do this, which is only making the helium shortage worse.
It’s impacting the price of helium because users just use the helium and then buy more.
Helium is expensive because few people recycle it.
10. Refinery Shutdowns
A final reason helium is expensive is the shutdowns refineries across the world experienced during the COVID-19 pandemic.
In an effort to stop the spread of the virus, many refineries had to shut down.
This completely halted the production of natural gas and helium.
The shutdowns lasted for some time and while that occurred, people were still buying helium.
Whether it was to celebrate a birthday in light of the pandemic or to keep using MRIs, helium kept flying off the shelves.
When refineries reopened, some did so without their full workforce.
They were able to reopen but in a limited sense.
While this meant that natural gas and helium were being produced once more, it was at a small amount.
Without their full workforce, refineries weren’t able to meet demand.
As such, refineries are still behind in filling the gap that the pandemic created.
Besides normal demand eating up their supply, refineries are still trying to get out of the hole that occurred when they weren’t operational.
Considering all the other factors impacting the supply of helium, it’s unlikely that the current refineries will be able to meet the demand for some time.
Helium is expensive because natural gas refineries had to shut down during the pandemic.
How To Save Money On Helium
If you’re looking to buy helium to fill balloons, then there are a few things you can do to help make the price cheaper.
The first is to buy small balloons.
With less cubic area to fill, you’ll use less helium which means you’ll need a smaller, cheaper tank.
You can also limit the number of helium-filled balloons that you use for a birthday.
Mixing these with air-filled balloons can help stretch your dollar.
Finally, don’t refill balloons with helium until they’re completely empty.
You’ll just be wasting helium as well as your money.
Conclusion
Helium is expensive because of global and local problems that are causing a shortage.
There are also only a few major suppliers of helium that set the price with little competition to lower the price.
Being smart about your balloons and how many you use can help you save money on helium.
