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Doesn't this give companies that supply helium to hospitals an opportunity to purchase helium? It seems like if there's a shortage for important uses in the eco

by abeppu 3y ago

Doesn't this give companies that supply helium to hospitals an opportunity to purchase helium? It seems like if there's a shortage for important uses in the economy, then moving helium out of a government reserve is exactly what you'd want, right? Your complaint is that you think for-profit hospitals should be gifted the helium rather than having to purchase it?

toomuchtodo 3y ago
Two issues come to mind immediately. The first is that the market might not be the most efficient mechanism for allocation for something like helium. Are party balloons more valuable than cryo coolant for particle accelerators, MRI machines, and science? Just because you can't cough up the market price doesn't mean your application isn't valuable [1]. The second is we've seen what happens with OPEC when a cartel controls the supply of energy. A for profit cornering the market for a non renewable resource could lead us to suboptimal stewardship of said resource (because humans are short sighted, near term driven, and fundamentally greedy). In 1979, in the midst of one of the many energy crisis in the 70s, the Shah of Iran said “oil is too valuable to burn." We've lucked out that we haven't run out of helium yet, but there is no guarantee we will continue to be lucky. The subcomments of this comment [2] explain the very real peril and concern. To your point "Your complaint is that you think for-profit hospitals should be gifted the helium rather than having to purchase it?", I would respond: Helium should be priced based on the end use as well as any systems in place to recover and recycle [3] [4], vs temporary use where it will quickly be vented to space, lost to us forever. [1] https://en.wikipedia.org/wiki/Market_failure https://en.wikipedia.org/wiki/Market_failure [2] https://news.ycombinator.com/item?id=37393338 https://news.ycombinator.com/item?id=37393338 [3] https://www.chemistry.ucla.edu/news/new-liquid-helium-recycling-system-offers-sustainable-research/ https://www.chemistry.ucla.edu/news/new-liquid-helium-recycl... [4] https://pharmacy.ucsf.edu/news/2021/06/helium-recycling-project-sets-new-standard-sustainability-ucsf https://pharmacy.ucsf.edu/news/2021/06/helium-recycling-proj...
- westcort 3y ago
  Exactly. Some crucial resources need to be managed with a long-term outlook or risk market failures. Helium is one such resource.
- abeppu 3y ago
  I think your comparison to OPEC is interesting, b/c it sounds like you think the price of oil was artificially high, but in retrospect, I think many would say that it has been far too cheap to burn oil, and this has driven our multi-generational climate crisis. I.e. I think the market failure in stewarding precious resources was _not_ that OPEC tried to keep prices high, but that failing to price in the cost of damage to the climate and environment kept prices artificially low. In the helium case in the US, my understanding is that from 1996 to 2013, though the US was the dominant global supplier and _could_ have chosen to act as a cartel, the 1996 legislation fixed prices to be artificially low (with the aim of merely paying off costs, rather than maximizing revenue), which is claimed to have disincentivized private parties from developing new production capacity. I'm not some free-market zealot who thinks the invisible hand can do no evil. But in this case, if the problem is that (a) there's currently a bottleneck upstream of important healthcare cases and (b) we want to discourage waste then we should want helium to leave the national reserve (i.e. there's more supply available to hospitals and other parties), and we should want that to be at a reasonable price so it isn't used frivolously (e.g. we wouldn't want party planners to be induced to use more balloons just b/c they're cheap). So auctioning off some of what is held in reserve seems like a reasonable action. Wrt pricing that is presumably _lower_ for installations with recycling capabilities -- I would think that recycling might if anything make institutions willing to pay a higher volumetric price, since they get more total benefit from it. If the recycling technology is efficient and practically applicable in many contexts, more and more facilities ought to be pressured by high costs to introduce recycling ... or leave the market.
  - toomuchtodo 3y ago
    My OPEC comparison was more centered on a small group controlling a critical resource who can control the price regardless of the needs of the consumers of said resource (not the historic price action). I agree with most of your points, but want to stress that the desired outcome should be responsible use and stewardship of what is both a highly useful and nonrenewable resource. Pricing is a component, but maximizing profit should not be the goal. I'd even go so far to say that you either wouldn't sell to consumers of helium who could capture and recycle it but currently choose not to, or you would subsidize the installation of that equipment for them out of the proceeds of more frivolous uses. My personal opinion is the goal should be to maximize the utility of the resource, with any profits being second order effects. Instead, we too often end up like ancestors who raze the forest only to freeze to death in the winter [1]. [1] https://en.wikipedia.org/wiki/Holznot https://en.wikipedia.org/wiki/Holznot

by abeppu 3y ago

toomuchtodo 3y ago

Two issues come to mind immediately. The first is that the market might not be the most efficient mechanism for allocation for something like helium. Are party balloons more valuable than cryo coolant for particle accelerators, MRI machines, and science? Just because you can't cough up the market price doesn't mean your application isn't valuable [1]. The second is we've seen what happens with OPEC when a cartel controls the supply of energy. A for profit cornering the market for a non renewable resource could lead us to suboptimal stewardship of said resource (because humans are short sighted, near term driven, and fundamentally greedy). In 1979, in the midst of one of the many energy crisis in the 70s, the Shah of Iran said “oil is too valuable to burn." We've lucked out that we haven't run out of helium yet, but there is no guarantee we will continue to be lucky. The subcomments of this comment [2] explain the very real peril and concern. To your point "Your complaint is that you think for-profit hospitals should be gifted the helium rather than having to purchase it?", I would respond: Helium should be priced based on the end use as well as any systems in place to recover and recycle [3] [4], vs temporary use where it will quickly be vented to space, lost to us forever. [1] https://en.wikipedia.org/wiki/Market_failure https://en.wikipedia.org/wiki/Market_failure [2] https://news.ycombinator.com/item?id=37393338 https://news.ycombinator.com/item?id=37393338 [3] https://www.chemistry.ucla.edu/news/new-liquid-helium-recycling-system-offers-sustainable-research/ https://www.chemistry.ucla.edu/news/new-liquid-helium-recycl... [4] https://pharmacy.ucsf.edu/news/2021/06/helium-recycling-project-sets-new-standard-sustainability-ucsf https://pharmacy.ucsf.edu/news/2021/06/helium-recycling-proj...

westcort 3y ago
Exactly. Some crucial resources need to be managed with a long-term outlook or risk market failures. Helium is one such resource.
abeppu 3y ago
I think your comparison to OPEC is interesting, b/c it sounds like you think the price of oil was artificially high, but in retrospect, I think many would say that it has been far too cheap to burn oil, and this has driven our multi-generational climate crisis. I.e. I think the market failure in stewarding precious resources was _not_ that OPEC tried to keep prices high, but that failing to price in the cost of damage to the climate and environment kept prices artificially low. In the helium case in the US, my understanding is that from 1996 to 2013, though the US was the dominant global supplier and _could_ have chosen to act as a cartel, the 1996 legislation fixed prices to be artificially low (with the aim of merely paying off costs, rather than maximizing revenue), which is claimed to have disincentivized private parties from developing new production capacity. I'm not some free-market zealot who thinks the invisible hand can do no evil. But in this case, if the problem is that (a) there's currently a bottleneck upstream of important healthcare cases and (b) we want to discourage waste then we should want helium to leave the national reserve (i.e. there's more supply available to hospitals and other parties), and we should want that to be at a reasonable price so it isn't used frivolously (e.g. we wouldn't want party planners to be induced to use more balloons just b/c they're cheap). So auctioning off some of what is held in reserve seems like a reasonable action. Wrt pricing that is presumably _lower_ for installations with recycling capabilities -- I would think that recycling might if anything make institutions willing to pay a higher volumetric price, since they get more total benefit from it. If the recycling technology is efficient and practically applicable in many contexts, more and more facilities ought to be pressured by high costs to introduce recycling ... or leave the market.
- toomuchtodo 3y ago
  My OPEC comparison was more centered on a small group controlling a critical resource who can control the price regardless of the needs of the consumers of said resource (not the historic price action). I agree with most of your points, but want to stress that the desired outcome should be responsible use and stewardship of what is both a highly useful and nonrenewable resource. Pricing is a component, but maximizing profit should not be the goal. I'd even go so far to say that you either wouldn't sell to consumers of helium who could capture and recycle it but currently choose not to, or you would subsidize the installation of that equipment for them out of the proceeds of more frivolous uses. My personal opinion is the goal should be to maximize the utility of the resource, with any profits being second order effects. Instead, we too often end up like ancestors who raze the forest only to freeze to death in the winter [1]. [1] https://en.wikipedia.org/wiki/Holznot https://en.wikipedia.org/wiki/Holznot