Friday, September 8, 2000 Officials expect 20% jump in home heating oil prices

By LISA LIPMAN, The Associated Press Copyright ) 2000 Blethen Maine Newspapers I

BOSTON  New England consumers can expect a 20 percent increase in their heating bills this winter, a regional industry official said Thursday.

But Thomas Kiley, president of the New England Gas Association, told a group of government and industry officials at a forum on fuel costs and availability that consumers can reduce their costs by buying into a fixed-price contract with their fuel providers before winter starts. Winterizing homes can also lower heating costs.

The potential for high fuel prices or shortages this winter pose a threat to the health and safety of New Englanders  as well as the economy of the region, said Gov. Paul Cellucci.

"There was a point last winter when we came dangerously close to running out of home heating oil," Cellucci said. "The situation has changed little. In fact, it may be worse."

Kiley was more optimistic. He said that oil pipeline capacity in the region is up 25 percent, and the supply of oil is enough to serve everyone in New England.

However, the cost of that oil will increase dramatically, he said.

Nationally, the average consumer can expect to pay $901 to heat their homes with heating oil this year, a $136 increase from last year, or about 18 percent more, said Mark Rodekohr, a federal Department of Energy official.

Cellucci hopes that the federal government will release funds for low-income families that can't afford to pay their heating bills, but that hasn't happened yet.

Roger Cooper, executive vice president of policy and planning at the American Gas Association, said he's confident that oil prices will fall sometime in the next six to 18 months. But he said no price declines were expected this winter, and the government won't step in to regulate costs.

"There's really not a lot that ... the government can do right now," he said.

The Northeast has a reserve of two million barrels of oil  one million in Connecticut and one million in New Jersey. The Department of Energy is planning a conference with regional energy officials to discuss how to use the reserve this winter.

But the reserve doesn't solve all heating problems of the region, which was hit hard by price.

"The fact of the matter remains that we are just consuming too much," said Jack Sullivan, CEO of the New England Fuel Institute. The only way to stem costs, he said, is to "conserve, conserve, conserve."

http://www.centralmaine.com/news/stories/000908homeheat.shtml

-- Martin Thompson (mthom1927@aol.com), September 09, 2000

Answers

What dreamers? 20% increase? They've got to be kidding. It will be many fold that.

And, just because they have 25% more pipeline capacity, it doesn't necessarily meant oil will flow through it.

Last year this time we had 67 million barrels of heating oil in storage. This year? Only 37 million. Result? Something's got to give. And, it can only be shortages, shortages, shortages, and high high prices in New England this winter.

-- JackW (jpayne@webtv.net), September 09, 2000.