Summer Is A Good Time To Think About Home Heating

By David Darman on Thursday, May 10, 2001.

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experts and analysts look ahead to next winter for market conditions for heating oil and natural gas.

OIL SUPPLY DARMAN
5/10/01

LEAD: Heating oil and natural gas customers in New Hampshire may have vivid memories of significant price increases during the last couple of winters. And though the official start of summer is just a few weeks away, it may not be too soon to start thinking about the return of cold weather, and the need for home heating. N H P R?s David Darman has more.
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Officials of the New England heating oil industry say its never too early to start thinking about buying fuel for next year. Bob Garside, president of The Better Home Heat Council of New Hampshire, an industry trade group, says customers should lock in a contract with a local oil dealer as soon as possible, to avoid getting caught in a shortage next winter.
02 55 as they get into the heating season, most of the dealer?s contracts are all gone. They?ve bought all that they?re going to buy, and then you?re subjected back to the open marketplace. So, the earlier on the contracts, the better. 02 108

Forward contracts allow oil dealers to know how much fuel they?ll need next year. But right now, oil refineries that serve the Northeast are working near capacity to bring gasoline supplies to market. Joseph Broyles of the Governor?s Office of Energy and Community Services says the refineries are responding to recent seasonal price increases for gasoline. And Broyles says if the refineries can keep up the pace, they could get a jump on the heating oil season for next winter.
05 28 later in the summer, if the production catches up with demand, then its possible the refineries will be able to switch back to production of heating fuel a little bit earlier, and get out of the cycle they?ve been in, which is being one season behind demand in this country for whatever the next season fuel demands are, be it fuel oil or gasoline. 05 49

While everyone who drives a car is paying higher prices at the pump now, across the country, people who heated their homes with natural gas last winter were socked with prices that rose as high as 200 percent.
That price hike caused blackouts and other problems in California, but it did not result in any shortages in New England, just higher prices. Michael Connors, spokesman for Keyspan Energy Delivery New England, the region?s biggest seller of natural gas, says there?s little chance of the northeast running out of gas, because a new supply is now delivered to our doorstep.
14 216 here in new England, we have the fortunate development that we?re no longer on the end of nation?s pipeline here. We?re at the beginning of a pipeline for sable offshore energy project, which is off the coast of nova scotia. And, a little over a year ago, the maritimes & northeast pipelines started delivering into new England that entirely new source of natural gas. 14 240

Since New England has been on the end of natural gas pipelines for so long, the region is unique in the United States because a majority of dwellings are still heated with oil, not gas. Keyspan is trying to lure New Englanders to make the switch from oil to gas by assuring customers that a supply will always be available. But industry analyst John Kingston of Platts Global Energy, says heating oil may have an advantage over gas in any local shortage of either fuel.
18 ?The other thing is the thing I mentioned earlier, about the flotilla of cargoes coming out of Russia korea and etc. to alleviate shortages, that really can?t happen in gas, there?s a limited amount of ability to import gas except what comes from Canada and that of course is limited by the pipeline space. 18 31

While heating fuel shortages have not hit New England in the past few years, oil and gas customers would like to avoid paying higher prices for fuel in the future. Despite these wishes, no one can predict next year?s prices with any certainty. But energy experts say there?s something people can do this summer to minimize energy consumption. They say now is a good time to clean the furnace and do other chores that make the house energy efficient.

For N H P R News, I?m DD