When hospital administrators hear the word helium, party balloons don’t usually come to mind.
Instead, they typically think about what it will cost them to keep their MRI machines running because the liquid form of the gas is needed to cool an MRI’s superconducting magnets. That price has been climbing recently because “the world is running out of the gas” according to GE, one of the principal manufacturers of MRIs.
GE recently invested $17 million in a recycling plant in Florence, S.C., to help ease the shortage. The company hopes to start making liquid helium in the new plant by June 2014.
The federal government is getting into the act as well. Back in 1925, it created the Federal Helium Program to fuel dirigible warfare but many lawmakers want to scrape that program—for obvious reason, according to a report in the Washington Post. But with the nation experiencing a shortage, Congress recently introduced a bill to keep it alive.
The national shortage is partly the result of the shortsightedness of energy producers who discard helium gas as a waste product as they drill for more lucrative natural gas. The worst of the shortage hit the marketplace in July/August of 2012, according to Tom Rauch, Global Sourcing Manager-Services & Aftermarket Solutions at GE.
Processing the waste gas has not proven economically viable for energy producers. That fact combined with outages at the Bureau of Land Management’s (BLM) helium plant in Amarillo, Texas, and elsewhere, brought about the crisis in 2012. Rauch explained that we are past the worst of it, and he expects the shortage to improve even more once a new helium refinery in the Middle East comes on line.
But in the meantime, “the prices have been insane,” says Rauch. In the spot market for helium, prices have gone up significantly, “so if hospitals don’t have long-term service contracts with a company like GE, they would have to go to third party service organizations. And if they didn’t have any kind of contractual arrangement, they may have felt some pressure with spot prices.”
Liquid helium is needed not only during the initial manufacture of MRI machines. Once they are installed in healthcare facilities, the machines have to be replenished from time to time as they lose helium.
“The shortage is real,” agrees Steve Atkins, Senior Vice President of Gases at NexAir, a re-packager of both gas and liquid helium. There are four major helium refiners in the U.S., who in turn get the element from two main suppliers.
NexAir’s primary customers are healthcare organizations and research facilities. And since NexAir is being charged more to obtain helium—by about 10 percent to 20 percent—they have been forced to pass that onto customers.
When asked whether the price increase is cyclical, Atkins said “I think we are going to continue to see the price of helium go up,” due to the fact that less product is coming from suppliers. “The amount of product coming out of BLM has been declining year after year.”