Buying party balloons at some stores may rise to new heights of difficulty as helium suppliers here deal with a worldwide shortage of the gas at least until September.

Higher demand and lower production globally could deflate availability farther into the future.

Helium is used for scientific research, arc welding, gas leak detection, and many other applications beyond the floating of balloons. For instance, liquid helium is critical as a coolant for magnetic resonance imaging scanners, and medical facilities are getting a top priority for delivery.

Mike Sutley, vice president and general manager of Spokane Valley-based OXARC Inc., says that while the company is maintaining helium supplies to its large customers, it's done some rationing in filling smaller orders. The company also has had to turn away new clients requesting the gas because OXARC is only getting 80 percent of the quantity it received a year ago from its wholesaler, he says.

"Up until about a month ago, we were getting 100 percent," Sutley says "They're telling us that by the first part of September, we should be back up to 100 percent of our allocation."

While the company expects to be back to a full supply within two months, a price hike might come with it, he says. Prices have jumped 31 percent since October, and another hike is expected this fall.

"We so far haven't shortened anyone significantly, but it's getting really, really tight," Sutley says. "Probably the largest market affected has been the balloon business—it's the flower shops, party supply houses."

Current conditions have at least some roots in federal policy change. Surprising to some in the private sector, the federal government is a major supplier of crude helium through the Bureau of Land Management.

The BLM supplies helium to refiners from the country's largest helium reserve storage near Amarillo, Texas, a result of Congress acting in 1960 to allow buying and storing helium mainly for government needs. In 1996, however, federal policy changed with The Helium Privatization Act to get the government out of the business of supplying pure helium and to deplete the reserve amount by 2015, with the idea that overseas and private operators would fill the supply-side void.

That hasn't happened, says Joe Peterson, with the BLM's Federal Helium Program and assistant field manager at Amarillo. The BLM supplies crude helium used in about 40 percent of U.S. helium production, and almost 35 percent of the world's helium production.

"We're producing—on a worldwide scale—less helium," Peterson says. "Really, it's that demand is higher and production is lower."

Karen Stokes, owner of Jackie Lynn's Flowers and Balloon Specialties on Spokane's North Side, says she's noticed a tightening of helium stocks from her supplier, Norco Inc., in the past six months.

About two weeks ago, Stokes says Norco told her it might be 30 days before the store could get its normal helium supply. Each week, she says, she typically orders at least one tank filled with nearly 300 cubic feet of helium, and sometimes two tanks of that size. On July 13, Norco provided two smaller tanks, each with 150 cubic feet.

"So what we have and what we're able to purchase, we have to make it work," Stokes says.

Stokes says she and the store's five other employees are designing more arrangements using air-filled balloons that stand as a column and are topped with only one or two helium-filled ones. Balloon purchases make up about 30 percent of the sales at the store, which is located at 407 W. Francis and also sells flowers and gifts. Additionally, it also fulfills orders for helium-filled balloons in bulk, including to Nordstroms Rack, which regularly orders about 150 balloons for store decoration.

"Places like Safeway were trying to stock up, and they weren't able to, so it's just becoming a major problem," Stokes says.

Stokes says she and staff are telling customers about the helium shortage, filling the orders they can, and using a machine that blows air to fill some of its balloons for arrangements.

"We've not had to turn any business away," she adds. "We've just had to be creative."

Linda Powell, who owns four 50 Percent Off Card Shops Inc. stores in the Spokane area, says so far the company has received enough helium supplies from OXARC, but it now is paying more for the gas and that price increase will have to be passed on to customers.

"(Helium) went up 20 percent," she says. "Then in October, it's supposed to go up another 20 percent. So far we haven't had trouble getting it. That doesn't mean that will continue."

Powell says customers are coming in the stores and saying they couldn't purchase helium-filled balloons at other retail outlets for birthdays and special occasions. "It is going to go on for a while according to people I've talked to who supply helium," she says.

Spokane-based Inland Imaging LLC provides outpatient MRI services for Providence Sacred Heart Medical Center & Children's Hospital as well as Holy Family Hospital, and has eight imaging centers in the Spokane area. That local network uses 10 MRI scanners to serve the Inland Northwest, including a mobile one for rural communities, says Jennifer Brown, Inland Imaging's MRI services coordinator.

"We've seen the impact from it since 2011," Brown says, adding that each scanner is monitored daily to ensure there's an ample supply of helium to keep the magnets in the scanners at a superconductive state. She says GE Medical Systems, under a service contract, provides maintenance and supplies the helium.

"Prior to 2011, we typically would keep our helium levels, say, between 70 and 80 percent per scanner, but in the interest of conservation, we are now keeping our helium levels between 40 and 50 percent full, which doesn't impact the operation of the scanner," she says. "We have to keep a closer eye on when those levels drop and make sure we have an ample supply of helium for the future."

If the shortage worsens, Brown says the largest potential impact would be a consolidation of services, but Inland Imaging hasn't had to consider that.

"Fortunately, we have a large presence in the region," she adds. "If for some reason we couldn't get enough helium to run all our scanners, and if we had a regulated supply, it could potentially impact how many MRI scanners we could operate in the community."

OXARC is a supplier of welding and industrial supplies as well as a number of medical and specialty gases, including helium, which Sutley estimates accounts for less than 10 percent of its sales. OXARC is giving a helium supply priority to hospitals, laboratories, and industrial business clients, he says.

"No one has helium in surplus right now," Sutley says. "The shortage, in my mind, it's already been for a year because they've locked us down at 100 percent for a year now and at that time, some of our competitors were only getting 60 or 80 percent, and now it's even less."

Peterson, at the BLM facility, says helium is most often recovered as a byproduct of natural gas production, and that the demand for helium by the private sector since the early 1990s has far surpassed government needs, such as for research and the space program. Other factors also are playing a role.

"You have the downturn in the economy, and you get less production of natural gas to run industrial facilities," he says. "Helium production is associated with natural gas production in many parts of the world, so as a result, helium production is down."

He adds, "There have been some plants overseas that aren't at full capacity and haven't been for more than a year and a half now. Those are contributing to the crunch."

A recent Popular Mechanics magazine article story about the shortage also mentioned helium price instability as a factor adding to the marketplace pressure, citing the May testimony of a helium industry executive, David Joyner, president of Air Liquide Helium America, before a U.S. Senate committee. The U.S. Senate is considering a bill called the Helium Stewardship Act that might modify current federal helium policies.

"Because the original base pricing of federal helium started at below market levels, the BLM, at the recommendation of the National Academy of Sciences, is now making unpredictable increases to adjust the base pricing up to market levels and to incorporate additional fees for costs that are specific only to the operation of the BLM reserve," Joyner said.

Sutley says when BLM sets the wholesale price for crude helium, others tend to follow.

"The BLM says there will be an 11 percent increase set for October," he adds. "That's not necessarily the price that will get to the street. It will probably be higher."