Last Year’s New England Winter Was Brutal on the Energy Grid. Get Ready for Worse.
Posted to Energy October 17, 2018 by Michael Graham
The New England region will be the hardest hit—right in the wallet– due to the region’s disproportionate reliance on home heating oil. The EIA anticipates that propane prices will remain flat, electricity costs will rise 3 percent and natural gas will go up 5 percent. But the price of heating oil is forecast to jump by 20 percent—a huge spike in costs for a heating source that is already far higher than any other.
“Heating oil is just very expensive,” Dan Kish of the Institute for Energy Research told Inside Sources. “And as the mandate for new, low-sulfur diesel expands to maritime shipping and other industries, New England homeowners will face more and more competition for their heating oil, which will put even more upward pressure on prices.”
In other words, look for heating oil prices to continue to climb, even as the cost of other fuels flattens or falls.
Kish notes that New England is uniquely reliant on heating oil—“about 40 percent of your homes in New Hampshire use heating oil, for example”—and he’s right. According to the EIA, about 20 percent of New England households rely on heating oil, which is 80 percent of the U.S. total.
Why is New England so dependent on heating oil? Part of it is an accident of history, but more recently it’s the result of activists opposing the expansion of energy infrastructure into the region.
“Heating oil is very expensive,” says Kish. “Natural gas, on the other hand, is so inexpensive that the price of oil would have to drop to $18 a barrel to match the price and energy output of natural gas.”
“Meanwhile, you’ve got activists trying to block any new pipelines in New England, you’re stopping electricity from Canadian hydro power from coming down through New Hampshire—this problem is almost entirely self-inflicted,” Kish says.
Sheetal Nasta, an analyst with RBN Energy tells Inside Sources: “From a natural gas perspective, the biggest potential issue this winter is that storage levels are the lowest they’ve been in more than a decade, particularly in the East Region (which includes New England).”
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