Winter heating bills expected to surge

John W. Schoen Senior producer • Profile • E-mail

With many parts of the country still enjoying relatively balmy weather, the price of heating fuels is already significantly higher than this time last year. And with repairs to hurricane-damaged refineries and natural gas production now expected to take months to complete, prices are likely headed even higher this winter.

All of which has consumers pretty nervous. A widely watched consumer confidence poll this week took its biggest plunge since 1990 — in part due to worries about the impact of back-to-back hurricanes on energy prices. 

Consumers are apparently doing more than worrying. Many are looking for ways to blunt the impact of higher energy prices. Officials in Illinois, for example, recently stocked up on brochures offering energy-saving tips, according to Christina Kielich, a spokeswoman for the federal office of Energy Efficiency and Renewable Energy.

“They said they wanted to order 20,000 to 30,000 brochures,” she said. “That’s the first time I’ve gotten that kind of a call.”

It remains to be seen just how much higher winter heating fuel prices will go from here. A lot, of course, depends on how cold this winter turns out to be. The big concern now is with fuel supplies.

With the summer driving season winding down, this is typically the time of year when oil refiners begin making more heating oil to increase stockpiles for winter. But with some 15 percent of U.S. refining capacity still shut down from hurricane damage, refiners are struggling to keep up with demand for gasoline. While heating oil stocks are in relatively good shape, a continued refinery outage could bring tight supplies later this winter.

The same holds true for natural gas. Natural gas producers are usually busy pumping up storage facilities in late summer and early fall to stockpile enough to meet winter demand. But as work continues assessing underwater pipelines and repairing damage, some 70 percent of gas production in the Gulf of Mexico remains shut down. Interior Secretary Gale Norton said Tuesday that it will take months — and billions of dollars — to repair damage and restore production, which will keep supplies tight and prices high.

So far, some 226 billion cubic feet of gas production has been lost to the storms — or about 6 percent of annual production, according to the U.S. Minerals Management Service. And natural gas distributors face a tougher challenge making up that lost production because natural gas is more difficult to import than home heating oil.

Natural gas prices have already surged since last winter. The U.S. Dept. of Energy forecasts peak residential prices of $16.37 per thousand cubic feet.  The retail price of a gallon of heating oil is expected to peak at $2.46.

All of which has revived interest in looking for was to cut winter heating bills by using less fuel. The economics are pretty simple: Most of these fixes cost less than the increased cost of fuel.

For starters, patching insulation leaks can save 10 to 15 percent on a monthly fuel bill. That includes weather-stripping or caulking around windows, ducts, switch plates, ceiling fixtures or attic or basement doors. (To find a heat leak, use a lighted stick of incense to check for spots where a draft blows the smoke horizontally.) Adding insulation, while more costly, can bring even bigger savings.

“If you have a house that was built in 1985 or before the chances are that its poorly insulated or that it’s leaky and needs to be caulked and weather-stripped,” said Kateri Callahan of the Alliance to Save Energy. “Or if it has been caulked or weather-stripped, it might be time to replace it.”

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