America is running a hot-air cartel

In 1925, the U.S. government declared helium to be a strategic resource and began stockpiling reserves of the lighter-than-air gas. Helium-filled dirigibles were thought to represent the future of air combat. While squadrons of blimp bombers never materialized, helium did become very important, and the government’s reserves kept growing. Helium’s unique properties, particularly as a refrigerant, led to many academic, medical, military and space exploration applications. It also proved handy for parades and birthday parties.

But in the mid-’90s, the U.S. government decided it no longer needed the huge stockpile of helium, which is held in a massive underground bunker in Texas called the Bush Dome Reserve (at its peak in 1973, the Dome contained 35 billion cubic feet of helium). The subsequent sell-off, as per the Helium Privatization Act of 1996, required that the gas be sold for a price high enough to recoup the cost of keeping the stockpile for all those decades. Since Bush Dome sales account for about one-third of global demand, smaller helium producers simply matched the mandated price—currently in the range of US$7 to $10 per liquid litre. In effect, the U.S. is running a helium cartel.

This policy has caused myriad problems for the scientific community. A new study from the National Academy of Sciences says universities and research organizations have been “hit particularly hard by the sharp price rises and shortages.” Worse, the study suggests that once its supply is depleted, the U.S. will find itself dependent on helium supplies from the Middle East and Russia.

The report recommends rethinking the sell-off and letting the open market determine the appropriate price for helium. In other words, let helium float.