Wintry Weather May Drive Up Energy Costs
Friday, December 8th 2006, 7:54 pm
By: News On 6
OKLAHOMA CITY (AP) The energy equivalent of sticker shock will arrive in Oklahomans' mailboxes next month as home heating bills record the impact of the coldest wintry weather so far this season.
Almost two weeks before the official start of winter, the state has already endured back to back arctic blasts that sent temperatures plunging into the teens and single digits.
Predictions of a colder than normal winter could send home heating costs even higher as demand increases for natural gas, electricity and other forms of energy, authorities said. The first day of winter is December 21st.
"I think Oklahomans should brace for higher prices," Corporation Commission Chairman Jeff Cloud said Friday.
The National Weather Service predicts that temperatures in Oklahoma will be below normal for at least the next month.
The Old Farmer's Almanac says this winter will be cooler than normal in Oklahoma with near normal snowfall. The coldest temperatures will be in early January, with other cold periods in early to mid- and late December and mid-January.
"People are going to be seeing the impact of this cycle of cold weather when they get their bills," said Don Sherry, spokesman for Oklahoma Natural Gas, the state's largest gas distributor.
ONG's December billing rate for natural gas, a popular home heating fuel that is also used to generate electricity, is $7.72 per thousand cubic feet, Sherry said. The same amount of gas cost $10.55 one year ago and topped out at about $12 per mcf in January, Sherry said.
Gas prices soared to record highs last year following hurricanes that ravaged gas fields and distribution facilities in the Gulf of Mexico and concerns about political unrest in other oil and gas producing nations.
Gas peaked at about $15 per thousand cubic feet after Hurricane Katrina in 2005. Although current prices are about half that record high, natural gas is still not cheap, Corporation Commission spokesman Matt Skinner said.
"Natural gas is expensive right now regardless," Skinner said. "The days when natural gas was very, very cheap fuel are gone. All indications are we're never going to get back to that time again."
A large majority of energy industry executives and managers surveyed last month by Deloitte & Touche USA LLP said they expect a range of $5-$10 per mcf by the end of 2007.
Gas prices have fallen as supplies increased because of an increase in exploration and the repairs to hurricane damaged natural gas production, processing and distribution facilities.
The amount of gas in storage is 7 percent higher than it was at this time last year, helping to keep prices low. And the East Coast and other highly populated areas of the nation have not yet seen severe winter like weather, keeping demand down.
"Storage is ample right now. But I'm convinced we're going to have a colder than normal winter," Cloud said. "No one can really accurately predict what's going to happen."
Consumption and lifestyle also determine how much a household spends on heating costs, officials said.
"You can't leave your front door open," Skinner said. "You can't crank your thermostat up to 78 degrees, unless you want to pay a lot."