The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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D A T E L I NE SHORT-TERM ENERGY AND WINTER FUELS OUTLOOK The Energy Information Administration released its Short-Term Energy and Winter Fuels Outlook on October 10. As the EIA notes, and as we reported in Fuel Oil News' heating season projections in the October issue U.S. households are expected to use more heating fuel this winter compared with last winter because temperatures are expected to be near normal this winter compared with last winter's above-normal temperatures in many parts of the coun- try. Specifically: Household natural gas heating demand this winter (October through March) is expected to be up nearly 14 percent, heating oil up 17 percent, electricity up 8 percent, and propane up 17 percent, according to EIA's Short-Term Energy and Winter Fuels Outlook for the 2012-13 U.S. heating season. While demand is expected to be higher than last winter, consump- tion is forecast to be less than the five-year average for all the major heat- ing fuels except heating oil. EIA's forecast for higher household heating demand mainly reflects a much colder winter east of the Rocky Mountains compared with last winter, with heating degree days in the Northeast, Midwest, and South expected to be 20% to 27% greater this winter, according to National Oceanic and Atmospheric Administration's (NOAA) forecast. EIA expects households heating pri- marily with heating oil to spend an average of about $407 (19 percent) more this winter than last winter as a result of a 2-percent increase in prices and a 17-percent increase in consumption. About 6 percent of U.S. households depend on heating oil for space heating; however, the Northeast accounts for about 80 percent of these households. Low distillate stocks in the East Coast and Gulf Coast states, which provide over 60 percent of the Northeast's distillate supply, and the state of New York's switchover from • • • FEATURED NEWS Winter fuels outlook EPA's September biodiesel volume Long-term amendments to RFS NEFI commodity trading reform meeting PPMCSA/ESPA Convention PMAA elects 2013 leaders GULF Electricity in Massachusetts Name change for PPMCSA OESP call for applicants • • higher sulfur heating oil to fuel with less than 15 parts per million sulfur, all contribute to an expected tighter mar- ket this winter. About one-half of U.S. households use natural gas as their primary heating fuel. EIA expects households heating with natural gas to spend an average of $89 (15 percent) more this winter than last winter. The increase in natural gas expenditures represents less than a 1-percent increase in the average U.S. residential price from last winter and a 14-percent increase in consumption. The expected increase in consumption is the result of the forecast of near-normal temperatures this winter, in contrast to the unusually warm winter of 2011-12. The projected changes in residential natural gas prices this winter range from a 3-percent decline in the South to a 4- percent increase in the Northeast. Price changes vary across regions because of a number of factors such as regional changes in production, pipeline supply capacity, and differences in regulatory constraints in passing price changes through to customers. About 5 percent of total U.S. house- holds heat with propane. EIA expects households heating primarily with propane to spend more this winter, but that increase varies across regions. • • EIA expects that households in the Midwest will see an average increase in both propane consumption and win- ter propane expenditures of 17 percent and 11 percent, respectively, with resi- dential propane prices 5 percent lower than last winter. With consumption projected to increase by 16 percent over last winter in the Northeast, households there may see an increase in expenditures of 15 percent with prices lower by an average 1 percent. Households heating primarily with electricity can expect to spend an aver- age of $49 (5 percent) more this winter because of forecasted colder weather despite a projected 2-percent decrease in prices. About 38 percent of all U.S. households rely on electricity as their primary heating fuel, ranging from 14 percent in the Northeast to 62 percent in the South. Wood consumption in homes has risen over the past 10 years, reversing a trend seen in the last two decades of the 20th century. In 2009, U.S. house- holds consumed about 0.5 quadrillion Btu (quads) of wood. Household fuel oil consumption, by comparison, was only slightly higher at 0.6 quads. In homes across the United States, wood is most commonly used as a secondary source of heat and is second only to electricity as a supplemental heating fuel. Twenty percent of New England homes (1.1 million) used wood for space heating, water heating, or cook- ing in 2009 (EIA, Residential Energy Consumption Survey, 2009). This is nearly twice the national rate. Almost half of all rural households used wood in this area of the country. In contrast, only 12 percent of urban New England households used the fuel. EPA RELEASES SEPTEMBER BIODIESEL VOLUME The EPA reported that 86 million gallons of biodiesel were produced in September, reporting year-to-date production of nearly 843 million gallons through the end of the month. www.fueloilnews.com | FUEL OIL NEWS | NOVEMBER 2012 3