Heating Season in Review: Mainers Save Big

April 20, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, April 18, 2016, and found the current statewide average cash price for No. 2 heating oil was $1.73 per gallon, which has not varied more than a few cents up or down over the last month. Average statewide kerosene and propane prices have also remained quite steady, not varying more than a cent or two over the last several weeks. This week’s average statewide prices for kerosene and propane were $2.28 and $2.23 per gallon, respectively.

The 2015-16 heating season has been very unusual in a couple of significant ways. Globally, crude oil prices were the lowest in over a decade, due to a combination of macroeconomic conditions. On the supply side, North American shale oil producers pumped out record amounts of oil; OPEC (Organization of Petroleum Exporting Countries) members maintained their high production levels, hoping this would allow them to retain their market share and force high cost shale producers out of the market; and Iran, no longer restricted by worldwide economic sanctions, began to ramp up its production. On the demand side, slower growth in China (the world’s second largest oil consumer) and concerns about the health of the U.S. economy (the U.S. being the largest oil consumer), have resulted in flat worldwide demand. High inventories and lower demand mean oil prices are likely to remain low, at least for the immediate future.

So how did lower crude oil prices affect the price Mainers paid to heat their homes this year? This season’s average price per gallon for heating oil was $1.86 per gallon, down 35% from last year’s average of $2.85 per gallon. Propane prices were also lower; this year’s average price of $2.19 per gallon was over 20% lower than last year’s average of $2.75 per gallon. Based on a heating season consumption of 900 gallons, the average Maine household saved almost $900 on heating compared to last year, and $1,650 compared to two years ago. The table below illustrates these price differences.

Maine’s heating fuel prices were also the lowest in New England (see chart below).

Prices don’t tell the whole story this season, however. Maine also experienced extremely mild winter temperatures. This year’s El Nino weather pattern resulted in warmer temperatures for the Northeastern U.S., Maine included. As the chart below indicates, the state’s heating degree days (hdd), an indicator how cold the season was, shows that there were over 15% fewer heating degree days this year than last year, which means Mainers used less fuel, increasing their cost savings. The table below shows the population-weighted heating degree day totals for each month in the heating season for the past 3 years.

All in all, Mainers had some of the lowest heating costs they’ve experienced in many years.

Using this week’s average heating oil price ($1.73), and converting to a common heating unit value (million Btu), the price of fuel oil is $12.47. This compares with an equivalent heating unit value for natural gas of $1.26 (at $1.26/therm); propane, $24.42 (at $2.23/gallon); kerosene $16.89 (at $2.28/gallon); wood pellets, $15.58 (at $258/ton); cord wood, $11.36 (at $250/cord) and electricity (electric baseboard), $38.10 to $55.69 (at 13-19 cents per kwh).

However, fuel 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 factored into the estimate. 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 are much more efficient than baseboard electric heat, so total energy costs are lower than 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 explore these fuel options further, as well as compare efficiencies of heating systems most closely matching their own system. 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 April 18, 2016

Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.73

1.69

1.70

1.77

1.68

1.93

High

2.15

1.85

1.90

2.15

1.93

1.95

Low

1.45

1.45

1.50

1.50

1.45

1.85

Kerosene

2.28

2.34

2.20

2.23

2.26

2.35

Propane

2.23

2.27

2.10

2.18

2.25

2.39

The price for heating oil is a statewide average; 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 ($2.15) was found in one region in the state, and the lowest heating oil price ($1.45) 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.

Download Release (PDF)

For Immediate Release

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