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Dale Poort
Environment
2008-10-01 08:48:00
Home heating costs going up
QUESTION: Will the cost of heating my home this winter be a lot higher than last winter?
ANSWER: It will definitely be “some” higher. In our article last month and before, we’ve been discussing what you can do to maximize your efficiencies with regard to your heating and air conditioning equipment by having your equipment serviced regularly, and if needed, installing higher efficiency furnaces and air conditioners in your home. Expensive, you say? Well, if you’re using an older furnace that’s not efficient at all, you’re actually paying for a new furnace in the form of higher fuel costs anyway. You might as well have the new furnace and spend less by quite a bit for the fuel you’ll be burning. But it’s also important to note that a part of the answer to your question that will become pretty important to you is how much the cost of the fuels that fire your furnace will be going up this winter. On average, household expenditures for all of your space heating fuels for this winter are projected to be about $1,135 for the period between October 16, 2008 and March 31, 2009. That’s about a 15% increase over the average fuel cost of just under a thousand dollars average that was spent last winter. Those consumers using heating oil or natural gas are expected to see the biggest increases in those fuel costs. Higher costs of production and/or refining are the main cause for the increases, but a projected colder winter this year will also contribute to higher fuel usage in a lot of areas, if, in fact, the colder winter temperatures materialize. In the last year, we’ve seen record prices in crude oil prices, which have caused us all to pay a lot higher prices for our gasoline and diesel needs, but with the financial crisis we’ve recently been seeing, the crude oil prices have been plummeting...all the way down to a recent price per barrel in mid October of around $75 a barrel. That caused the price at the pump to slip, giving welcome relief to hard working Americans who have seen a huge portion of their budget being siphoned off from other areas…areas like medicines, food, and the like. Declines in oil demand, due to conservation by consumers, has also contributed to the drop in the price of oil. The economic growth slowdown, if it continues, will also have a “chilling” effect on the ability of the middle east oil cartels to prolong their amazing ripoff of the American people at the pumps. Speculators on “oil futures” have also hurt us badly. As well as the Arabs, who have recently flown “trial balloons” in the media, making sounds about reducing the production levels in their oil fields, thereby artificially keeping the price of refined gasoline in this country high…but through continued efforts of using less of the fuels, we can take things into our own hands to a certain extent. Upgrade your equipment, buy and install setback thermostats, caulk and seal windows and siding, etc. If the economic downturn in this country and around the world were to continue, however, that would significantly impact global and domestic demand, driving the prices down. Supply and demand are important factors in the overall equation. According to NOAA, the National Oceanic Atmospheric Administration, and their most recent projection of heating degree-days, the Lower 48 States in America are forecast to be 2.4 percent colder this winter when compared to last winter, but 1.7% warmer than the 30 year average from 1971 to 2009. However, within the US, regional heating degree-day projections vary pretty widely. The West North Central region of the country is expected to be almost 5% warmer than last winter. That’s good news for those who live in our state of Kansas. The recovery from the Hurricanes in the gulf is ongoing, and was expected to be pretty much wrapped up, from the standpoint of oil and gas production, by the end of October. Fuel expenditures for individual households are highly dependent on local weather conditions, market size, the size and energy efficiency of individual homes, as well as their heating equipment, and thermostat settings. Households heating primarily with natural gas are expected to spend an average of $155 (18 percent) more this winter. Nationwide, about 52 percent of all households depend on natural gas as their primary heating fuel. The increase in natural gas expenditures reflects the combined effects of a 17-percent increase in price and 1-percent increase in consumption. In the Midwest, where 72 percent of all households rely on natural gas, a projected 17-percent increase in average household expenditures results from a 19-percent increase in prices and a decline in consumption of 2 percent due to the forecast of slightly warmer weather than last winter. Households heating primarily with heating oil can expect to pay an average of $449 (23 percent) more this winter. Only 7 percent of U.S. households depend on heating oil for winter fuel and most of these households are in the Northeast, where 31 percent of households use heating oil as their primary space heating fuel. In that region, the average household is projected to pay 24 percent more than last winter as a result of an 18-percent increase in prices and a 5-percent increase in consumption. Residential heating oil prices in the Northeast are projected to average about $3.90 per gallon during the winter season compared with $3.31 per gallon last winter. The projected increase is consistent with higher crude oil prices and projections of lower distillate inventories than last year going into the heating season. Households heating primarily with propane can expect to pay an average of $188 (11 percent) more this winter. Propane-heated households, which represent about 6 percent of total U.S. households, are projected to see an average increase of 11 percent in propane expenditures this winter, but that increase varies widely by region. Western households are expected to see an average increase in expenditures of 5 percent, while Southern homes are expected to spend 16 percent more this winter. Households heating primarily with electricity can expect to pay an average of $89 (10 percent) more. Thirty-five percent of all U.S. households rely on electricity as their primary heating fuel, ranging from 12 percent in the Northeast to 59 percent in the South. On average, electricity expenditures during the winter are projected to rise by 10 percent because of increased consumption and prices. Households in the South are projected to pay 13 percent more this winter on electricity bills. The bottom line is, we have to make sure we’ve got ourselves in a position to keep our families warm this winter, and that old furnace is either up to the task or it’s not. And if you are going to try to get by “one more year” with that old furnace, don’t even consider not having it checked out for carbon monoxide leaks, used up burners that are ready to completely corrode in on themselves, and/or a cracked heat exchanger that can blow that carbon monoxide right into your living spaces…with devastating effects upon you and your family. You don’t want to let that happen, and we don’t want that to happen either. More next month...
 
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