Natural Gas Users: Expect 48%
Increase.
Natural Gas Users to Take Hit This Winter
Yahoo News/AP
By H. JOSEF HEBERT, Associated Press Writer
October 12, 2005
WASHINGTON - Winter heating bills will be a third to a half higher for most
families across the country, with the sharpest increases expected for those who
heat with natural gas, the Energy Department forecast Wednesday.
The department said natural gas users can expect to pay an average of $350
more during the upcoming winter compared to last year, an increase of 48
percent. Those who heat their homes with fuel oil will pay $378 more, or 32
percent higher than last winter.
Propane users can expect a percentage jump in their bills similar to those
of fuel oil users.
In its winter fuels outlooks report, DOE's Energy Information Administration
assumed a normal winter and steady progress in restoring oil and natural gas
production and refinery output from the damage inflicted by hurricanes Katrina
and Rita.
"Should colder weather prevail, expenditures will be significantly higher,"
the EIA said.
The agency as well as the natural gas industry said that heating costs could
vary widely among regions.
The National Oceanic and Atmospheric Administration offered a bit of cheer
Wednesday morning, issuing a long-range winter forecast calling for warmer than
normal temperatures in much of the Midwest and Pacific Northwest.
NOAA's National Weather Service said there is a 60 percent chance of warmer
than normal weather in the Dakotas, Nebraska, Iowa, Kansas, Missouri, Oklahoma,
north Texas, northern New Mexico and southern and eastern Colorado. States
adjoining that area, plus Washington, Oregon, Alaska and Hawaii also have a
chance of being warmer than usual. Other areas could be warmer or cooler than
usual but no area was singled out to be especially cold.
A month ago, the EIA said natural gas prices could jump as much as 71
percent in the Midwest, where four of every five homes are heated by gas. It
made no such specific assessment this time, but acknowledged that a
colder-than-normal winter in the Midwest would produce significantly higher
costs.
The cost of fuel accounts for about 70 percent of the price utilities charge
retail residential customers, according to the American Gas Association.
EIA said it expects continued recovery of the energy system in the Gulf
region in the coming months. But it said it expects a third of the Gulf's crude
oil and a fifth of its natural gas to remain shut-in into December.
It also projected wholesale natural gas prices staying at about $12 per
thousand cubic feet through the winter heavy demand period, twice what it cost
last winter.
For some low-income families the sharp jumps could mean choosing whether to
eat or keep warm, energy experts and advocacy groups fear.
The natural gas utilities warned Tuesday that despite their attempts to
contain retail fuel costs, heating bills for gas users this winter will jump 50
percent over last season nationwide. In parts of the Midwest bills could be
much higher.
More than half of all U.S. households heat with natural gas. But many of
those who rely on electric heat, nearly a third of the country, may also see
bills go up because many power plants run on natural gas. And users of fuel
oil, more than half the households in New England, are expected to see their
costs jump by a third or more over last winter, according to industry and
government estimates.
"We have never had prices so high and increase so quickly," said Mark Wolfe,
executive director of the National Energy Assistance Directors Association,
which represents the state agencies that distribute money to help low-income
families pay their fuel bills.
This winter, Wolfe expects more than a million additional applicants for the
government program, a 20 percent increase over last year, with not enough money
to go around. Congress provided $2.2 billion for the program, known as LIHEAP,
last year. Wolfe said $5.1 billion is needed to keep pace this coming winter
with the soaring energy costs and expanded demand.
The double punch of the two hurricanes knocked out 20 percent of the
nation's natural gas production, severely damaged gas processing facilities
along the Gulf Coast and shut down more than a dozen refineries. As a result,
natural gas supplies and heating oil are tight as functioning refineries
focused on getting enough gasoline onto the market — and not building up
stocks of heating oil.
Heating costs for the average family using fuel oil in the Northeast is
projected by the group to be as much as $1,867 for the winter heating season,
an increase of $605 over last winter, and $915 more than two years ago.
About half of all households in New England use fuel oil.
In the Midwest, where natural gas heats 79 percent of all homes, according
to AGA, the winter heating costs are projected to soar to $1,568 for the
season, an increase of $611 over last winter, according to Wolfe.
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