Contents of RauwLetter July 2009
- Rauw Energy Introduces the Fuel Economizer to Homeowners
- Fuel Prices
- Energy Star is Recognizable and Important
- Energy Saving Tips
- Event - Vermont Yankee Nuclear Power Plant, Vermont
- Event - Live Green Expo and Music Festival, Manchester, Vermont
- Referral Program
- Customer Coupon
Fuel Prices
From a low in February 2009 at $36.99 per barrel for crude oil, fuel prices are on the rise once again with intermittent days when prices retreat. The reasons are varied and multiple. The only real certainty is that as world population increases and less developed countries become more developed, energy demand will increase.
The logical conclusion is that fuel prices will go up. At what point renewables such as solar photovoltaic and wind technologies will be able to take over the job is up to speculation. What we know for sure is that a major shift out of current conventional heating and cooling systems will take a long time and a lot of money. What this means for homeowners is that we will more than likely be fossil fuel consumers for some time to come.
In order to make educated decisions regarding our energy use, it is important to understand the ins and outs of fuel prices. Although not a simple matter, we will attempt to sort some of this out.
Domestically, the three fuel types of interest are traded on public exchanges where prices are displayed minute by minute. These are Crude Oil, Heating Oil, and Natural Gas. All three are traded on the NYMEX (New York Mercantile Exchange).
Crude Oil is the price per barrel that is most familiar to homeowners who use oil to heat their homes. What we pay per gallon is closely tied to its price. The Crude Oil price reflected on the NYMEX represents approximately 60% of the price of a gallon of home heating fuel. Crude Oil is the price established prior to refining, transportation, delivery costs and profit margin. Therefore, when the nightly news reports price per barrel, with 42 gallons in a barrel of crude oil, we cannot conclude that we simply divide the price by 42 and that is what we will be paying. Depending on the state you live in and your oil company, the per-gallon price can fluctuate significantly. As well, there are numerous market and other forces that play a role in the price of home heating oil relative to the price of crude.
A world recession has slowed development and growth for the time being, therefore decreasing world demand for oil. However, it is up to speculation as to where demand will be over the next several years as the recession ends and how that demand will affect the price of a barrel of crude. World security issues may also be a factor in the production and availability of oil as will environmental events such as Hurricanes Katrina and Rita that destroyed many oil platforms and drilling rigs in the Gulf of Mexico.
Although there are many variables, it can be helpful to look back as a point of reference and note that when a barrel of crude was $104.24 in March of 2008, Vermonters were paying on average $3.89 per gallon for residential heating oil and New Yorkers were paying $3.94 per gallon. At $70.89 per barrel in October of 2007, Vermonters were paying $2.82 per gallon of home heating fuel and New Yorkers were paying $2.96 per gallon. The June 2009 price for a barrel of crude closed at $72.35.
Because of so many variables, we cannot say definitively where the price of crude oil will be at any point in the future. The best bet to help ameliorate high prices is to decrease demand while working to bring more renewable energy on line. Until that happens, individual homeowners can affect their own fuel consumption through conservation.
(Price source: Energy Information Administration, Official Energy Statistics from the U.S. Government, www.eia.doe.gov)
