EnergyMiser101

Low Supplies Help Keep Heating Oil Price High

     It seems like we just can't win on heating-oil prices. The U.S. Energy Department estimates that we're going to pay 10 percent more for heating oil this winter than we did last year, even though temperatures for the season are forecast to be 2 percent higher.

     And here's something that isn't going to help: U.S. inventories of diesel fuel and heating oil have dropped to a three-year low, just at a time when we're going to need them the most!

     There are a couple of reasons why prices are rising and supplies are dropping:

• Crude oil inventories are tighter because the political unrest in Libya has cut the country's exports to near zero.
• Competition for diesel fuel, which is essentially heating oil but with a lower sulfur level, is growing as the world's automobile fleet expands. Diesel fuel is a factor in the U.S. for trucking, but it's the primary automobile fuel in most of the rest of the world.

      In fact, the U.S. now is a major exporter of diesel and heating oil, also known as distillate fuel. U.S. exports topped 600,000 barrels a day last year, up from 100,000 barrels a day in 2003, according to the

Save Heating Oil With an Electric Radiator

     We just got a 170-gallon heating-oil delivery, and at the $4 a gallon we’re paying in New Jersey the bill came to a whopping $680 dollars! If you heat with oil, you’re sure to feel our pain.

     But what to do? We’ve insulated. We have storm windows. We’ve added weather-stripping. We have a programmable thermostat. We have a fairly new and efficient furnace. Oh, and we keep the thermostat at a chilly 65 degrees during the day. There’s not much left to try to keep us from the agony of a heating bill that may top $2,900 this winter.

     So we’re thinking outside of the box, or, outside of the furnace. The cost of oil has risen much faster than the cost of electricity—so much so that we’re taking a gamble that supplementing our heat with electric radiators will save us money this winter. A quick calculation shows that we might save up to $750, and who wouldn’t want to do that?

Why Is Heating Oil So Expensive This Winter?

     Ouch! We just got our heating oil bill for a delivery made a few days ago and it was over $700 for just 183 gallons! That really hurts.

     The U.S. Energy Department says households will have to spend 30 percent more on heating oil this year than they did last winter, and do we ever feel it! Unfortunately, there isn't much on the horizon to indicate things will get better any time soon.

     If you've gotten a similar bill, you know how helpless it makes one feel.

     After all, we've picked all the low-hanging fruit in an effort to conserve the precious fuel. We've insulated. We've installed a new furnace, we've plugged leaks around doors and, most importantly, we've kept our thermostat set at a chilly 62 degrees. Why, at times I felt so cold that the only thing that would keep my stiff fingers warm was keeping them wrapped around a hot mug of tea.

     Why does the price of heating oil just go up and up and up? 

     The answer lies in the increase in demand for fuels as the economy has begun to pull out of the worst recession since the Great Depression. The Energy Department says that in 2010 demand for diesel fuel, which is nearly identical to heating oil, grew by 3.6 percent. That's a pretty hefty increase, and the gain is matched by improvements in consumption in much of the developed world. The Energy Department says to expect more of the same this year.

    Where is all that diesel fuel going? For trucking. As business at factories improves, diesel-fueled trucks ship more goods. Increasing consumer confidence means people start buying more goods, and those goods are shipped to stores or from Web sites like Amazon by trucks that burn diesel fuel.

How Adding Insulation Cut Our Heating-Oil Use

     The new winter heating oil season is underway and while we're looking forward to toasty nights by the fireplace, today we're celebrating the past. After tallying our bills for last season we found that we cut our consumption of the fuel for the fourth straight year! Our 2,100-square-foot house consumed 571 gallons, a 14 percent reduction from the winter of 2009-2010.

     There's one reason for this year's savings--insulation. Well, to be completely honest, it was a warmer winter than the year before, too, so that had something to do with it. Still, we're giving the lion's share of the credit to the fluffy stuff we had blown into our attic.

 

     For those of you new to this blog, we've been on a ten-year quest to lower our heating oil bills through a combination of new hardware, conservation, and a bit of attitude change about the cold.

     It's been quite a success story. In our first winter in our 1924-built wood-frame house, we burned through 1,500 gallons of heating oil. Since then, we've replaced our old furnace, installed a programmable thermostat, sealed leaky doors, removed air-conditioners from windows, and altered, somewhat, our notion of just how warm we're supposed to feel during a New Jersey winter. You can read the entire story by following this link to an earlier post.

     But this story is about our insulation. After having a home energy audit in the spring of 2009, we learned that while our attic was insulated, the amount of protection was nowhere near what it should have been. We contracted with a home-insulation company that spent a day blowing treated cellulose under attic floorboards and into hidden spaces behind walls. You can read all about it by looking at these posts:

• Quest for an energy audit
• How we chose an insulation contractor
• How the insulation job went

     We spent $1,200 on the insulation job. Was it worth it?

     We used about 100 gallons less oil. Our average price was close to $3 a gallon last year, so we saved about $300. That means the job may pay for itself in about four years, and less if heating oil prices continue to escalate--as I think they will.

     Also, we definitely felt warmer, especially in our bedroom, which is under the attic, but even on our first floor. I think less heat escaped into that wasteland of old suitcases, school papers and discarded clothing.

     So what's next for this year on the energy-saving agenda? I'd like to get our basement steam pipes re-insulated. We had all the asbestos removed from the pipes in 2002 when we replaced our 80-year-old steam boiler. Ever since then the basement has been toasty warm because of the unprotected pipes, but that's heat energy we'd rather have upstairs. The man who conducted our energy audit a couple years ago said that we're wasting energy because pipes that are meant to be steam conductors are actually steam radiators.

     We can buy insulation for some of the smaller pipes at our local home center, but we don't have a clue how to go about insulating some of the fatter main pipes. It'll be fun to find out, however, and we'll let you know how it goes! Have any of you readers insulated your steam pipes? Let me know!

Beat the Cold With an Electric Radiator

      It got down to 14 degrees in northern New Jersey over the weekend, and the wind was howling through the trees—not a recipe for a toasty warm house when we keep the thermostat at 62 degrees. But upstairs in the spare bedroom where our main computer is located I was snug because of the new oil-filled electric space heater we bought for less than $60 at Home Depot.

      Also, it didn't cost an arm and a leg to use the heater. Used sparingly, the heater cost us about 5.5 cents for each hour it was in use. Used injudiciously, that cost can go much higher!

      I love the winter, but the cold makes it really difficult to work at a keyboard. The relative inactivity makes my body feel like it's an icicle in short order. The choice before me was to keep the whole house at a higher temperature, a waste when our daughter is in school and my husband is at the office, or to seek out a supplemental heat source.

      We did some not-very-scientific research about ways to heat a room. One choice was an electric resistance heater. You turn it on and some heating elements begin to glow similar to the way an electric stove works. I didn't like the idea because it seemed that as soon as you turned the unit off, it stopped generating heat.

State Aids Removal of Underground Oil Tanks

     You may be noticing some large, deep holes in front yards around town and wondering what's going on. Well, don't panic. It's not some strange burial ritual, but rather a sign that many residents in Montclair and other New Jersey towns are taking advantage of financial incentives offered by the state for removing old, underground oil tanks before they start to leak because of rust and old age.

      Leaking underground heating oil tanks are a growing potential environmental problem for millions of homes in New Jersey and throughout the Northeast, because oil seeping from a tank can pollute the ground around your house and your neighbors' houses, and work its way into the water table, contaminating the drinking water supply.

      New Jersey has recognized the environmental threat and it's offering financial aid to homeowners to get those tanks out of the ground, hopefully before environmental damage occurs. That's important because an ounce of prevention in this case is worth a pound of cure.

      More than 6 million homes in the Northeast use heating oil, according to the U.S. Energy Department. It isn't known how many of those homes have their tanks underground, instead of, for example, in a basement. The number is undoubtedly in the millions, however, and for many homeowners, an underground tank can be a ticking time bomb.

High Stocks Drive Prices Lower

       When it comes to both gasoline and heating oil prices, consumers could be in for some significant price relief. The key word here is supply, or more precisely, oversupply.
     The Energy Department reported lower spot prices for gasoline in all major markets for the week ending November 2. Prices for gasoline have been declining for weeks because of reduced demand and a build up of inventories. Lower consumption partially reflects the seasonal shift in driving habits, but a much bigger factor is the weak economy and the high unemployment rate which is keeping a lot of drivers off the road.
    The trend in oversupply is even more pronounced in the heating oil market. The Energy Department resumed reporting distillate prices this week and will continue to do so until mid-March. This market has been decimated by the weak economy and the fall in trucking traffic.
     US inventories of distillate are almost 50 percent higher now than they were at this time last year. This can only be good news for heating oil buyers. Gasoline stocks are up around 25 percent and crude oil inventories are nearly 34 percent higher than a year ago. Basically, we're awash in refined products!

Winter Forecast Favors Heating Savings

     The Energy information Administration (EIA) published its winter fuels outlook today, and it brings good news for homeowners. This winter, the EIA said it expects the average US household to spend $84 or 8% less on its home heating bill than it did last winter. Their projections are based on National Oceanic and Atmospheric Administration's (NOAA)most recent forecast of 2009-2010 winter weather, which is calling for it to be 1 percent warmer than last year.

High Heating Oil Supplies May Lower Prices

     It' s supposed to reach nearly 70 degrees this coming week in New Jersey, but the other day when the temperature inside our house dipped to around 63 degrees and our heat came on I knew that this week's forecast was just a big tease. You can't stop the cold from coming, but high distillate inventories could provide some price relief this winter for those of us with oil heat.

Heating Oil Companies Offer Plan Options

 
     I'm a comparison shopper. Before I buy anything, from boots to bed linens, I compare brands and prices. So, when a neighborhood painter told me recently that he saved a lot of money last winter buying heating oil from a supplier I never heard of, I decided to apply my shopping prowess to that commodity so that I could learn how to buy the cheapest heating oil. I made a few calls, and picked up some interesting tidbits from local suppliers that should interest anyone with oil heat.

      The only sure way to save a significant amount of money on your per-gallon heating oil cost is to buy your oil from a C.O.D. supplier. The one my painter friend uses is in Newark, New Jersey. They do not offer a service contract, they simply deliver the oil when you order it and accept cash payment. You need to place an order each time you need oil. There is no automatic delivery. And you pay the spot price, whatever that is at the time of purchase.

Getting Rid of An Old Underground Oil Tank

      My book club met again today, and before our talk turned to The Guernsey Literary and Potato Peel Pie Society (a great book, by the way), we discussed heating oil tanks—specifically old ones, how much trouble they can cause, and how much it can cost to get rid of them.

     Our conclusion was that if you have an older, underground oil tank, it makes a lot of sense to have your ground tested for leaking oil, and, once it's determined that the tank is in tact, to take out oil tank insurance.

Why Do Crude Oil Prices Fluctuate So Much?

      Price volatility is expected in any commodity market. In fact it's how people trading those commodities make money. But lately crude oil and related products like gasoline and heating oil have had so many wild price swings that business owners and even homeowners have had a difficult time budgeting their energy costs. Here's some background for you on why these swings may be happening.

    To understand the current pattern of oil prices, one has to put those prices into some historic perspective. When I was covering petrochemical markets in the early 1990s and we were in the middle of a bull market one of my colleagues insisted that crude prices would soon (in a matter of months) top $100 per barrel.

How We Cut Our Heating-Oil Usage

     It's July and we're celebrating last winter's heating season. Why? Because we just got our final delivery of heating oil and we learned that for the winter of 2008-2009 we used 53 gallons less than last year! And to make victory even sweeter, this winter was about 8 percent colder than the previous one.

     We're very pleased with our conservation efforts! We've been on a nine-year quest to lower our heating-oil usage, and through a variety of techniques—some expensive and some less so, we've cut our consumption of the fuel by more than half.

     Get a load of these numbers: In the winter of 2000-2001 we used 1,500 gallons of heating oil. This  past winter we used 667. How did we manage to get our oil consumption so low? Let's take a quick walk down memory lane.

What's It Like Living With Geothermal Heat?

   Heat exchanger in garage.

     Now that the heating season has come to a close in the Northeast, I've been eager to get an update from my neighbor who had a geothermal heating/cooling system installed last fall.

     This past week we got together for a walk and a cup of coffee, and, after discussing kids' schoolwork and social lives, our talk turned geothermal. I had a lot of questions, but what it mostly came down to is this: Are you happy with your decision to invest in geothermal energy? The answer was definitely yes, but with a few caveats.

     Just a refresher (see earlier EM story): My neighbors needed to replace their old oil-burning furnace. Rather than invest the $9,000 in a new heater, they decided to make a radical shift to geothermal heat.

     The cost was about $33,000, but a 30 percent government tax credit brought the total closer to $23,000. Remember, for that amount of money they're also getting a complete central air-conditioning system for the summer. That alone would have cost as much as $20,000.

What Is Biofuel and Is It In My Heating Oil?

     Soybeans. When I think of them, I think of Chinese food or my first job as a reporter covering a beat called Oils, Fats, and Waxes. I don't think about heating our house. But, that's exactly what I found out that soybean oil is being used for—to supplement our fuel oil.

     You may have some in your heating oil too. But, don't panic. It won't cost you any more and it won't make your house smell like Chinese food. If you have oil heat, and your oil contains some biofuel (most likely soybean oil), you'll actually be contributing to a cleaner environment and a reduction in dependence on foreign oil—all at no cost to  you.

     Our local supplier, Mitchell Supreme, ran an article in its newsletter touting the use of biofuel in their heating oil. The idea of biofuels peaked my interest, so I gave them a call.

Should You Switch from Oil to Natural Gas Heat?

(2010 Update: See how we saved on oil consumption year by year.)  

     Oil or gas heat? That is the question we have been pondering for a while now, especially with oil prices so high. So, when we got a flier recently from PSE&G, our local utility, encouraging us to call them for a free estimate on converting to gas, we decided to take them up on the offer. For us, it doesn't pay to change. Here's why.

    I should start by saying that we decided a few years ago to replace our 80-year-old coal-burning furnace, that at some point in the distant past was converted to oil, with a newer, more efficient model.  (We affectionately called the old unit Frosty because it was covered with white asbestos and reminded our then 5-year-old daughter of a snowman!) The new furnace, which cost about $6,500 in 2002, cut our oil use by more than half—from about 1,600 gallons a winter to 750. (At the current price of about $2.60 a gallon, that's a seasonal savings of roughly $2,200—not bad!)

Why Is Heating Oil More Expensive Than Gasoline?

     I had my book-club partners over for our monthly get-together last week. Although it was cold and windy outside, the sun flooded through the windows of my dining room and warmed our bodies and our spirits. In that toasty, cozy atmosphere, surrounded by good friends, the conversation naturally turned to--the price of heating oil.

     Why, asked Karen, is heating oil more expensive than gasoline? With gasoline prices below $2 a gallon, the retail price of home heating oil in the Northeast is about a dollar more expensive. It doesn't make any sense, Karen said.

     I had to admit I was stumped for a good answer, so I did a little research.

Geothermal Heat: Is It For You?

    BRRRRRR. Our outside thermometer fell to 42 degrees last night and for the first time this season our heat came on, bringing the indoor temperature to a brisk, but tolerable, 62 degrees. Last week, in preparation, I purchased a couple of down comforters—one for our eleven-year-old daughter and one for me and my husband. The total cost was $400, an expense I'm hoping to recoup by lowering our thermostat a couple of degrees this winter versus last winter.

                                   Bigger Investment

    But, while I was visiting the local down shop, our neighbors were making a much larger investment.  Hoping to reduce their reliance on fossil fuel and thus shrink their carbon footprint and their monthly bills, they had a geothermal heating system installed to the tune of $30,000! This may sound outrageous, but it's an investment that could pay off in the long run.