Statewide Average Heating Oil Price Drops Below $2.00 per Gallon

September 23, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, September 21, 2015, and found the current statewide average cash price for No. 2 heating oil was $1.99 per gallon, down an additional 9 cents since late August. Average kerosene and propane prices also followed the same trend; the average statewide kerosene price this week was $2.56 per gallon (eleven cents lower), and the average statewide propane price for heating customers was $2.14, dropping another seven cents since late August. The statewide average heating oil price is now the lowest heating season price recorded for the last ten years.

Although heating oil prices have continued to decline, the global price of crude oil has recently creeped upward; West Texas Intermediate (WTI) crude oil, the North American benchmark price, is trading just over $45 per barrel, and Brent crude (the European benchmark price) is slightly higher, at around $49 per barrel. These prices are $5-6 per barrel higher than a few weeks ago. Bloomberg news reported today that domestic crude oil production is expected to fall significantly in the next year (see below).

Predictions of significant U.S. production declines are just that, predictions; however, global markets often react to the most recent prediction of future oil production as well as future economic growth of larger, oil consuming nations. What is certain is that Maine is vulnerable to the volatility of these markets, simply because so much of our economy still depends on the price and availability of oil. It is this price volatility, or the mere speculation of prices rising, that highlights the importance of planning for the state’s long term energy future. To assist the state in this effort, the U.S. Department of Energy has recently awarded a grant to the Governor’s Energy Office (GEO) and the Environmental and Energy Technology Council of Maine (E2Tech) to develop the Maine Energy Planning Roadmap. According to Energy Office Director Patrick Woodcock, “The DOE award will bolster state and regional energy planning, policies, and programs. Maine has many assets available to address its energy challenges, including in-state renewable resources, regional access to natural gas from the south, and hydropower from the north. The ultimate goal of this project is to establish an implementable, stakeholder driven plan that results in lower costs, advances energy reliability and security, and improves the environment. Without a comprehensive roadmap, Maine will continue to be unprepared for price volatility, be constrained in its ability to access natural gas, and prolong its dependence on imported fossil fuels, all of which will restrict the state’s ability to build businesses and create jobs.”

Using this week’s average heating oil price ($1.99), and converting to a common heating unit value (million Btu), the price of fuel oil is $14.35. This compares with an equivalent heating unit value for natural gas of $12.00 (at $1.20/therm); propane, $23.43 (at $2.14/gallon); kerosene $18.96 (at $2.56/gallon); wood pellets, $15.39 (at $254/ton); cord wood, $12.95 (at $285/cord) and electricity (electric baseboard), $38.10 to $55.69 (at 13-19 cents per kwh).

However, fuel-only prices are only part of the calculation when determining which fuel will save you more this heating season. The type of heating system, as well as its efficiency, needs to be considered. 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

Efficiency Maine also has a calculator on its website that can help consumers evaluate their heating options http://www.efficiencymaine.com/at-home/home-energy-savings-program/heating-cost-comparison/

As of September 21, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.99

1.95

2.02

1.99

1.92

2.18

High

2.44

2.30

2.15

2.44

2.38

2.20

Low

1.70

1.70

1.90

1.70

1.70

2.10

Kerosene

2.56

2.68

2.51

2.48

2.28

2.58

Propane

2.14

2.18

2.01

2.13

2.13

2.30

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 ($2.44) was found in one region in the state, and the lowest heating oil price ($1.70 was recorded in three 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.

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For Immediate Release

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