Home Heating Costs May Rise
A Third to a Half, DOE Says
Home heating costs could rise by between a third and a half this winter, the Department of Energy said, as world-wide energy demand remains high and production in the U.S. remains strained following damage caused by hurricanes Katrina and Rita.
The department's annual fuels outlook, released Wednesday, predicted that households heated with natural gas will see the sharpest increase, paying an average $350, or 48%, more this winter than last. Residents of oil-heated homes will pay roughly $378 more, a 32% rise from last year. Propane users will pay roughly $325, or 30%, more than last winter, and homes heated by electricity will cost about $38 more, or 5%.
Weather plays a major role in determining heating costs, and the National Oceanic and Atmospheric Administration is predicting slightly warmer-than-normal temperatures for December, January and February, the peak of the winter heating season. That might provide some relief, particularly for states in the Midwest, where 75% of households rely on natural gas for heating.Meanwhile, the Energy Information Agency, the Department of Energy's statistical arm, said the pace of repairs to hurricane-damaged wells, refineries and pipelines is stepping up. Refinery outages will drop sharply this month, officials said, but persist into 2006. Oil and natural-gas output in the Gulf of Mexico won't be back to normal until late March, the end of the heating season.
Overall, the EIA said total petroleum demand in the U.S. this year is projected to fall slightly, averaging 20.5 million barrels a day, or 0.9% less than last year. The drop is attributed to a combination of hurricane-related disruptions and reduced demand due to higher gas prices.
Higher heating bills, combined with heightened gasoline prices, may force many Americans to spend up to 20% of their take-home income on energy costs this winter, 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.
The high heating prices expected this winter will be a blow to families that depend on the Low-Income Home Energy Assistance Program to subsidize their energy bills. Liheap helps consumers pay about half of their energy bill, which last year averaged $600, but the Department of Energy's new estimate cast doubt on whether the proposed Liheap funding for this winter will cover the costs.
"For low-income families, this will truly be a crisis when they get these bills," Mr. Wolfe said.
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