Heating costs likely to be higher this winter
Winter heating for most American households likely will be more expensive this year than over the past two winters, the U.S. Energy Information Administration said this week.
The expected rise in costs is likely to be led primarily by colder winter temperatures, along with a slight increase in fuel prices, the government said in its annual Winter Fuels Outlook, which was released Wednesday.
Winter weather is expected to be about 13 percent colder than last year and closer to the average over the previous decade, according to projections from the National Oceanic and Atmospheric Administration. At the same time, commodity prices are trending up slightly, with larger increases in propane and heating oil than in electricity and natural gas, the report stated.
The average natural gas-heated household is expected to spend $644 on heating expenses from Oct. 1 through March 31, up 12 percent from one year ago. The increase of $69 for the winter is based on a projected 9 percent increase in consumption and 2 percent increase in price.
The national average for homes heated by electricity is expected to be up 8 percent to about $980 for the winter, although Oklahoma is one of the lowestcost states for electric consumption.
Propane costs are expected to average $1,661 this winter, up 18 percent from one year ago. Homes warmed by heating oil are expected to see a 17 percent increase to $1,462 for the winter.
While the trend could drive up costs for consumers, it could provide at least a modest boost for the state’s oil and natural gas producers, as well as state and local coffers. Winter natural gas spot prices are projected to average $3.30 per thousand cubic feet, up 5 percent from last winter.
Besides increased projected U.S. consumption, producers also are benefiting from increased natural gas exports. Last year, the United States was a net importer of natural gas, averaging about 600 million cubic feet per day.
This winter, however, the country is expected to be a net exporter for the first time. EIA forecasts show the country’s producers exporting about 1.4 billion cubic feet of natural gas per day this winter, boosted by both increased pipeline capacity to Mexico and new liquefied natural gas exporting capacity on the Gulf Coast.