Natural gas prices to skyrocket

Published 4:56 pm Wednesday, November 2, 2005

By By Janet Little Cooper
The Energy Department has forecast that winter heating bills will be a third to a half higher this winter, with the sharpest increases expected for those who heat with natural gas.
This winters fuel prices are projected to increase for all fuel types compared to a year ago. On average, households heating primarily with natural gas are expected to spend about $350 (48 percent) more this winter in fuel expenditures. Households heating primarily with heating oil can expect to pay, on average, $378 (32 percent) more this winter. Households heating primarily with propane can expect to pay, on average, $325 (30 percent) more this winter. Households heating primarily with electricity can expect, on average, to pay $38 (5 percent) more.
Should colder weather prevail, expenditures will be significantly higher. These averages provide a broad guide to changes from last winter, but fuel expenditures for individual households are highly dependent on local weather conditions, the size and efficiency of individual homes and their heating equipment, and thermostat settings.
Tom Wolfe manager with the City of Atmore Utilities Board projects natural gas customers will pay 70 to 75 percent more this winter.
"Our cost at the Utilities board has gone up at least 70 to 75 percent higher than last year." Wolfe said, "Those projections are based on the weather being the same as last year."
The local utilities board has no control over the increase in fuel costs. The rapidly increasing rate hike will be felt across the board.
"About 50 percent of the natural gas in the Gulf is offline due to the hurricanes." Wolfe said, "They were wiped out by Hurricanes Rita and Katrina and some damages remain from Ivan. I don't how soon they will be back online again."
Department of Energy's Information Administration 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 shutdown into December.
The two hurricanes knocked out 20 percent of the nation's natural gas production, severely damaged gas processing facilities in the Gulf and shut down more than a dozen refineries. As a result, the natural gas supplies and heating oil became tight as functioning refineries focused on getting enough gasoline onto the market and not building up stocks of heating oil.
The demand for heating oil increased last month as Accuweather projected a colder than normal winter for the Northeast where most of the heating oil is used.
"People need to keep in mind that this is a temporary problem." Wolfe said, "It will be fixed. I certainly don't think it is enough of a problem for someone to switch from natural gas to electric or anything."
For some families the sharp jump even for a short time could mean choosing whether to keep warm or to eat.
"That is the sad part about this." Wolfe said, "The people who can least afford the higher bills are the people who need it the most."
Wolfe recommends that people turn their thermostats down, and wear a sweater in an effort to save on their gas bills. He also recommended that homeowners take larger steps such as insulating their homes properly and sealing windows and doors.

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