Price Of Home Heat Will Strain Some Cape Budgets This Winter

Chaotic and stormy weather, both in the wake of Tropical Storm Hanna and Hurricane Ike and on Wall Street, have left consumers looking to minimize home heating oil costs this coming winter with little certainty.
As Ike approached the coast of Texas, about a fifth of the country’s refineries closed down as a precautionary measure. Since repairs and the reopening of those operations will take some time, particularly in those places where electric  power is still unavailable, experts have been predicting a short-term spike in gas prices.
Once it was clear that neither Ike or Hanna had irreparably damaged those refineries, however, the price per barrel of oil began to fall. Combine that knowledge with the financial storms in the US financial markets, and an anticipated slowdown in the demand for oil, the price dropped below $100 a barrel.
What that will happen over the long term, and what it will mean for the individual Massachusetts oil consumer has yet to be seen.
At this point, the experts can only say, with any degree of confidence, that winter is coming, fuel oil costs will be higher this year than last, and those with the lowest income levels will be the most severely impacted.
That is not to say, however, that there is no information available for an individual to use to make the most economic choices this winter.
Considerable efforts have been made both governmentally and by some individual suppliers to provide as much detailed price and supply information as possible.
The Massachusetts Department of Energy Resources posts one of the most useful websites, with information on every type of energy, including discussion of alternative sources.
The DOER can be reached by calling 617-626-7300 or going online at www.mass.gov/doer.
Among other tasks, that department tracks energy costs for electricity, natural gas, gasoline, diesel, and fuel oil.
Fuel oil prices are determined by calls to dealers statewide. For September 2 of this year, the average price was $4.04 per gallon, calculated from a high of $4.62  and a low of $3.52. In the same week in 2007, that average price was $2.67; in 2000, it was $1.47.
That information can be found at www.mass.gov/doer/fuels/pricing.htm.
The Mass Oilheat Council, among its other services, posts a listing of members, all of whom, the MOC says, generally carry more insurance and have more storage capacity. A listing of the council’s Cape Cod members can be found online at www.massoilheat.org/findadealercapecod.htm.
From that site, consumers can link to oil dealer’s websites, several of which have the day’s fuel oil price per gallon posted.
How hard rising fuel prices will hit consumers is dependent, in part, on the weather, what Karen Pisiewski, consumer affairs coordinator with the DOER, says is always “the x factor.”
Predictions are based on a “normal” winter unless, or until, the National Weather Service predicts otherwise.
It’s too early to tell what this winter’s weather will be like for the Cape, said Ed O’Lenic, a meteorologist with the National Weather Service’s Climate Prediction Center.
It is difficult to go out seven days with any reasonable certainty.
Still, looking at the climate as a whole, some predictions can begin to be made, Mr. O’Lenic said.
Usually, he said, if weather is going to be influenced strongly by the weather phenomenon known as El Nino and La Nina, it is easier to predict changes to the weather. In June of 2008, however, La Nina conditions gave way to what is called ENSO neutral conditions, a state in which uncertainty is prevalent. ENSO neutral conditions are expected to last into the new year.
For the last 30 years, however, climate on the Cape had been relatively stable, allowing for trends to be calculated, Mr. O’Lenic said.
The center issues updates on its predictions on the third Thursday of the month. According to the long-lead seasonal outlook issued on August 21, the trend was for above normal temperatures reaching across the US and into the Northeast during December of 2008 through February 2009. Precipitation was also likely to be above normal in the Northeast.
A look at the center’s map, however, showed Cape Cod outside of the area for which a trend toward higher precipitation had been noted. That leaves the level of precipitation an unknown quantity this far away in time.
This week, a new, updated season outlook should be posted online at www.cpc.ncep.noaa.gov/products/predictions.
Whatever the price and the weather, the prediction is that high fuel oil prices will place the biggest burden on the poorest of Massachusetts households.
The Donahue Institute at the University of Massachusetts has studied the impact of rising energy costs, issuing a report on July 31.
The report concluded that more than a third of Massachusetts households heat with oil, and that they would bear a disproportionate share of the burden of rising energy costs.
At the end of July, the institute was predicting that fuel oil prices, which rose more than 175 percent between 2003 and 2008, would rise a further 10.75 percent from 2008 to 2009.
In comparison, residential prices for natural gas rose 48 percent in the same time period, while electricity went up 43 percent. Natural gas costs were projected to go up 15.6 percent and electricity, 7.6 percent.
The institute predicted that the average Massachusetts oil heat bill would exceed $3,000 in 2009.
Even using conservative figures, the institute predicts that 163,224 low and low-to-moderate income households will have difficulty paying their oil heat bills this winter.
Two-thirds of that number, or 108,870  homes, will be “severely” burdened, the study concluded.
Some 69,595 of those homes are headed by people over 60; about 25,000 by residents over 80.
Massachusetts laws protect people with low incomes, the ill, the elderly and those with infants in the home from having their gas or electric heat shut off. Some discounts are also mandated.
Fuel oil distributors, however, are not regulated utilities.
The federal Low Income Energy Assistance Program, or LIHEAP, will only assist some 42 percent of the households expected to have difficulty heating their home this winter. The rest will not be covered because their incomes exceed eligibility requirements.
The report suggested that a failure to address residents’ short-term needs would have long-term health and safety consequences.
Ms. Pisiewski said that, even with falling oil prices, fuel oil could be much higher this year. They are currently a little over $4 a gallon, compared with about $2.65 at the same time last year.
She said that some of the dealers belonging to the Mass Oil Heat Council and other oil cooperatives offer slightly lower prices, and there are discounts for seniors given by some companies.
The DOER, which posts fuel prices online, begins updating them frequently beginning in October, for those who want to comparison shop.
Finding a supplier who will put them on monthly payment plan now is a good idea for those who want to spread out the cost of fuel oil over the year.
Ms. Pisiewski said people at the Department of Energy Resources worry that the most severely impacted residents will fire up old, unsafe space heaters or use their fireplaces without first checking the chimney, risking fires. She hopes no one will use even the best maintained of those heat sources at night.
Those without a carbon monoxide detector are also at risk. Absent a monitor, a release of  that deadly gas can go undetected with fatal consequences.