Cold Snap Puts Strain on Propane Supplies

December 17, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, December 16, 2013, and found the current statewide average cash price for No. 2 heating oil was $3.66 per gallon, up two cents from last week, and thirteen cents higher than a month ago. The average statewide price for kerosene is also up two cents, to $4.06 per gallon. Average propane prices also increased again this week, up another 7 cents, to $2.92 per gallon. This average price is sixteen cents higher than a month ago.

Heating oil prices are following a similar trend to last year, increasing as heating demand increases, but heating oil supplies are adequate to meet demand. Propane supplies, however, are tight this heating season, and the cold weather has left suppliers struggling to keep up with the increased demand.

The transportation of propane into Maine has changed in recent years. In the past, the majority of propane supplies for the Northeast arrived via marine shipments, with the remaining supply arriving from pipeline in Texas. As a result of increased production in North America, suppliers can sell their product overseas for a much higher price than they can in the U.S., which has led marine shipments to head toward those higher priced regions. Likewise, some of the propane that used to travel north by pipeline is now delivered south for export. Consequently, most of the region’s propane supplies now arrive in Maine via rail and truck from longer distances, which can be delayed during winter storms. Tighter supplies and higher demand mean higher prices for Maine homeowners and the Energy Office has been closely monitoring these markets. Last week, the Governor announced an emergency declaration to allow trucking operations additional flexibility to secure this critical fuel.

Using this week’s average heating oil price ($3.66) and converting to a common heating unit value (million Btu), the price of fuel oil is $26.39. This compares with an equivalent heating unit value for natural gas of $15.50 (at $1.55/therm); propane, $31.97 (at $2.92/gallon); wood pellets, $14.67 (at $242/ton); cord wood, $11.36 (at $250/cord) and electricity, $43.96 (at 15 cents per kwh). These fuel-only prices do not take into account the type of heating system, nor its efficiency. For example, the electricity cost is for traditional baseboard heat. Other electric heating technologies, such as heat pumps and electric thermal storage (ETS), may offer consumers energy savings. Cold climate heat pumps, a recent technological advancement, are much more efficient than baseboard electric heat, so total energy costs are lower than many other types of heating fuels. ETS offers savings by utilizing off-peak electric rates, available in many areas of the state.

The Energy Office has a calculator on its web site that allows consumers to obtain more detailed estimates of home heating costs, and the price impacts of various types of fuel, heating systems and heating appliances. Heating costs vary considerably from home to home. The home heating calculator can assist homeowners in finding the best heating option for their home, location, lifestyle, and budget http://www.maine.gov/energy/index.html

As of December 16, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.66

3.65

3.68

3.67

3.61

3.76

High

3.95

3.90

3.95

3.86

3.80

3.86

Low

3.45

3.45

3.55

3.48

3.45

3.70

Kerosene

4.06

4.06

4.09

4.08

4.00

4.14

Propane

2.92

3.00

2.94

2.86

2.84

2.92

It is important to note that the price for heating oil is a statewide average, and that prices in a given geographic region of the state may be considerably higher or lower than this average. This week, within the Energy Office sample, the highest heating oil price ($3.95) was found in one region in the state, and the lowest heating oil price ($3.45) was found in two regions. Also, the statewide average price for propane is based on a use of at least 900 gallons a year. Households using propane just for cooking or hot water generally pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

Efficiency Maine Trust links Maine homeowners and businesses with qualified, certified contractors who provide access to energy improvement options. For program details call 866-376-2463 or visit www.efficiencymaine.com.

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For Immediate Release

Contact:
Lisa Smith
(207) 624-7445
lisa.j.smith@maine.gov