I was listening to a radio program the other day about threats to the world’s helium suppliers, and was fascinated at the story. Like many people we love having helium balloons for our childrens’ birthday parties but it seemed, at least from the radio report, that this might be rather remarkably going to become a party favourite of the past.

A third of the world’s helium comes from a US Government stockpile in Texas, originally founded in the 1920s as a reserve for airships, and sited near gas fields that have some particularly high percentages of helium in the gas extracted.

It turns out that when natural gas is mined, it  contains traces of helium. However this is often at such a low rate that it is not commercially viable to extract, as a consequence there are only a dozen or so places around the world where helium is mined.

The big commercial problem is that the selling off of the USA’s helium reserves has artificially lowered the price of helium for decades – the price we pay is not a true reflection of the cost of the product. And now the reserve is running out, the world will have to turn to the other sources of helium – and pay the commercially viable cost.

Helium is key to many high tech machines and processes, for example it’s used in the production of semiconductors (those tiny things that make everything from your iPhone to your car work); the production of optic fibre, and the operation of Magnetic resonance imaging machines (MRI) in medicine.

At least one person, an academic in the UK, has suggested banning helium balloons from kids birthday parties, however someone with a better grounding in economics points out the flaw:

Even if the helium reserve does stay open for a few more years, its helium will be sold at much higher prices than before. As a result, average market prices could rise by about 30% in 2014, estimates Richard Clarke, a resources consultant in Oxford, UK. That comes on top of major price rises that have already squeezed research budgets. In 2000, the market price of high-quality helium was roughly £1/m3 (enough to make about 1.35 litres of liquid helium); today it hovers around £4/m3.

So what can be done? Some researchers have suggested banning frivolous uses of helium, such as party balloons. But this accounts for only 8% of global demand, and offers some of the highest profit margins in the market – without birthday balloons, researchers’ helium would likely cost even more.