Natural Gas Costs Expected to Rise 13 Percent, Propane to Jump 9 Percent
Lower temperatures and higher energy costs offer HVAC contractors the perfect recipe for a busy winter season. The U.S. Energy Information Administration (EIA) is reporting that more than 90 percent of homes and facilities in the U.S. will receive higher heating bills this winter season, in comparison to last winter, as heating fuel prices continue to surge.
When compared to last year, the EIA projects natural gas winter heating costs to rise 13 percent. If the temperature averages 10 percent colder than normal, those costs could increase as much as 25 percent.
The EIA’s most recent statistics (March 2013) note the average cost of natural gas prices at $9.35 per thousand cubic feet. A 13 percent increase would push that price to $10.56 per thousand cubic feet.
Charlie McCrudden, senior vice president of government relations, Air Conditioning Contractors of America (ACCA), said it’s fairly typical for energy prices to rise in the winter months, in response to the rising demand for heating fuels.
“According to the EIA, fuel expenditures are highly dependent on local weather conditions, market size, the size and energy efficiency of facilities and homes, their heating equipment, and their thermostat settings,” he said.
Prices won’t be rising for everyone, though. The EIA predicts the cost of heating oil will decrease 2 percent compared to last year. The average price of residential heating oil on Nov. 6, according to the EIA, was $3.818 per gallon, excluding taxes. A 2 percent drop would lower the price to approximately $3.754.
Ralph Adams, service manager, Parker Fuel Co., Ellicott City, Md., and co-chair of the Oil & Energy Service Professionals’ (OESP) education committee, said he believes heating oil prices were overinflated to begin with.
“It didn’t make sense where the prices were,” Adams said. “They should’ve come down from what the retail price was. It’s a good thing for our industry (now). Another thing playing into that is natural gas prices spiking up. Natural gas was way cheaper than it should’ve been because there was such a glut of it. One of the things people will have to worry about is when they open up and start shipping natural gas out of the country, those prices are really going to go up.”
Michael Timberlake, senior associate for new media relations, Alliance to Save Energy, said, as energy prices rise, the need for greater energy efficiency increases.
Source: www.achrnews.com; Matt Bishop, November 18, 2013.