Home heating prices expected to be higher this year, colder winter
The US Energy Information Administration released its Winter Fuels Outlook this week. The report projects that household expenditures will be higher for all fuel types, primarily due to the colder weather forecast. EIA projects that this winter will be 2 percent warmer than the 30-year average, but 18 percent colder than last winter.
Matt Cota, executive director of the Vermont Fuel Dealers Association, said consumers should take EIA fuel cost estimtes "with a grain of salt."
"Keep in mind," he said, "that the EIA Winter Outlook is a hazy gaze into a crystal ball, and more often than not, the EIA guesses wrong. The EIA consistently screws up the cost analysis when comparing fuels. This is because the surveys don’t compare fuels across regions. Instead they look at the cost of the predominant fuel in each region. That's why the EIA claims it costs $900 to heat your home with electricity. This is absurd, as electric costs the equivalent of $8 a gallon in the Northeast and most Vermont homes use 750 gallons a year.
Cota said that what is what is important to remember is that, "Unlike utility heated homes, oil heat and propane consumers in Vermont have several options on how they may purchase their fuel and benefit from a competitive market place where fuel dealers work hard to gain and keep your business. Consumers can lock in or cap their price, as well as establish a budget plan to manage their costs. Learn more about these options on our website at vermontfuel.com/itsapromise.html."
"There are a wide variety of things every consumer can do around the house to reduce energy consumption, even without an energy audit. You can access these helpful energy conservation tips on our website at vermontfuel.com/efficiency.html"
According to the US EIA
|Fuel Type||Fuel Unit||Fuel Price Per Unit (dollars)||Fuel Heat Content Per Unit (Btu)||Fuel Price Per Million Btu (dollars)|
|Fuel Oil (#2)||Gallon||$3.93||138,690||$28.34|
|Natural Gas 1||Therm 2||$1.01||100,000||$10.11|
|Corn (kernels) 3||Ton||$200.00||14,000,000||$14.29|
US households are expected to use more heating fuel this winter compared with last winter because temperatures are expected to be near normal this winter compared with last winter's above-normal temperatures in many parts of the country.
Household natural gas heating demand this winter (October through March) is expected to be up nearly 14%, heating oil up 17%, electricity up 8%, and propane up 17%, according to EIA's Short-Term Energy and Winter Fuels Outlook for the 2012-13 US heating season. While demand is expected to be higher than last winter, consumption is forecast to be less than the five-year average for all the major heating fuels except heating oil.
EIA's forecast for higher household heating demand mainly reflects a much colder winter east of the Rocky Mountains compared with last winter, with heating degree days in the Northeast, Midwest, and South expected to be 20% to 27% greater this winter, according to National Oceanic and Atmospheric Administration's (NOAA) forecast.
At the same time, supplies look plentiful for most heating fuels this winter:
Natural gas is the most popular heating fuel, used by almost half of US households. Natural gas inventories are expected to climb to 3.9 trillion cubic feet by November 1, a record for that time of year.
Electricity is the main heating source for almost 38% of households. In addition to record natural gas inventories to draw down to generate electricity, coal stocks held by the U.S. electric power sector are forecast to total 187 million metric tons by November 1, up nearly 19% from a year earlier.
Heating oil is burned by 6% of U.S. households for winter fuel, with 8 out of 10 of those heating oil users located in the Northeast. Lower heating oil stocks in the East Coast and Gulf Coast states, along with New York requiring heating oil with lower sulfur levels, are expected to contribute to a tighter heating oil market this winter.
Propane is used to warm about 5% of households, many located in rural areas. Propane inventories totaled almost 76 million barrels in early October, up 32% from the same period a year ago.
Source: U.S. Energy Information Administration, Short-Term Energy Outlook.
Source: Vermont Fuel Dealers Association. US EIA. 10.11.2012