High helium prices limit gas balloons as sport

By Euan Rocha

NEW YORK (Reuters) - Gas ballooning, as an adventure sport, is likely to fade away in the United States, as a sharp spike in helium prices and supply constraints threaten the survival of the sport.

Gas balloons, are mainly used by ballooning enthusiasts to set distance records, with flights lasting as long as two or three days.

Unlike the more common hot-air balloons, which use propane as a fuel, gas balloons use helium or hydrogen for flights. Hydrogen ballooning is almost nonexistent in the United States, due to the highly flammable nature of the gas.

"Price is just about to drive gas ballooning extinct in this country," said Andy Cayton, an avid gas balloonist and retired army helicopter pilot who runs balloon rides in Georgia.

The price for a full tank of gasoline for cars might be exorbitant these days, but filling up a helium-filled gas balloon could cost over $12,000. And that's just the gas; buying a gas balloon itself can cost about $30,000.

Two to three years ago, the cost to fill a helium balloon of the same size was about $3,000.

The prohibitive cost is one of the main reasons that the adventure sport is small in the United States. There are about 5,000 qualified hot air balloonists in the country, but less than one-tenth of that total are qualified gas balloonists.

A part of the price escalation is driven by escalating energy, fuel and other operational costs as well as the growing demand for helium from other sectors.

Praxair Inc, one of the largest refiners of crude helium in the United States, said the use of helium in the manufacturing of microprocessors, electronics and fiber optics has increased the worldwide consumption of the gas. Helium is also used in aerospace and medical applications.

Helium, a by-product of natural gas production, has also faced some supply interruptions in recent years that have created shortages and fueled some of the price escalation.

Troy Bradley, who is based in New Mexico and trains gas balloonists, is flying with a student to Germany in August to fly a hydrogen balloon there. Hydrogen-based gas ballooning is common in Europe and much cheaper.

"It is actually cheaper for us to fly to Europe, rent a car, get a hotel, go fly there and come back," said Bradley.

One company which could be sensitive to soaring helium prices is Macy's Inc, which organizes the annual Thanksgiving Day parade in New York, where giant helium-filled gas balloons are the main attraction.

A spokesman for Macy's declined to comment on the rising cost of helium and its effect on parade costs.

But one ballooning enthusiast, who declined to be identified, estimated that helium costs alone for each of the larger balloons in the parade are likely to be about $4,000 to $5,000 per fill-up. Given that some of the balloons are tested before the parade, the helium costs for the show are likely to be substantial indeed.