Price of natural gas drops; heating oil rises

PHOTOGRAPHER: Marc Schultz

On Monday morning, Thomas Doody of East Bayberry Rd. in Glenmont, talks about how he has replaced his heating system and water heater with energy efficient units over the summer, which have given the family a cost savings by installing. Executives from Na

Energy experts are forecasting that heating with natural gas will cost less this winter than last, while heating with oil will be more expensive initially, then drop as 2013 begins.

William Flaherty, National Grid’s director of customer and community management, predicted on Monday that natural gas customers will see a 3 percent decrease in their heating bills during the five chilliest months of the year — November through March. For a typical household, that translates to a reduction of about $21 from last year’s bills, assuming the same amount of energy is used.

Last winter, thanks to unusually warm weather, natural gas customers in upstate New York saw their heating bills decrease by more than 25 percent, compared with the previous year, he said at a news conference.

Flaherty noted that the actual price of natural gas is ultimately determined by a combination of market prices, customers’ natural gas usage and the weather.

Average heating oil prices are higher than they were at this time last year. According to the U.S. Energy Information Administration, at the beginning of last year’s heating season, prices for home heating oil averaged $3.66 per gallon. As the 2012-2013 heating season begins, the price is up to $3.84.

In the first quarter of 2013, the cost is predicted to drop to $3.78 per gallon, a penny less than it was during the first quarter of 2012.

“If we see a milder-than-expected winter, that would tend to lessen demand and put downward pressure on prices, but conversely, if we see a much colder winter, that would increase demand and put upward pressure on prices,” said Energy Information Administration spokesman Jonathan Cogan.

Fluctuations in crude oil costs will also affect prices, he said.

The cost of home heating oil is about $3.89 a gallon at John Ray and Sons in Troy, according to general manager Glen Young. Young was not willing to give a prediction about the heating season to come, but said he expected prices will go down due to an abundant oil supply and reduced demand.

John Bove, co-owner of G.A. Bove Fuels in Mechanicville, said he thinks oil prices will remain stagnant.

“Demand is a little bit less than originally thought and it’s been decreasing for the last four years due to the economy,” he said.

Bove, who is selling home heating oil for about $3.85 a gallon, conceded that it is more expensive than natural gas, but said the price difference isn’t as large as most people think.

A single therm of natural gas isn’t equivalent to a gallon of oil, he said.

“It takes roughly three therms to equal two gallons of oil,” he said, noting that surcharges, line-carrying fees and taxes elevate natural gas bills well beyond the cost per therm.

Monday’s National Grid press conference was held at the Glenmont home of Thomas and Carole Doody, natural gas customers who recently received a $438 rebate from National Grid for installing an energy-efficient furnace and programmable thermostat.

National Grid offers a number of programs to help customers lower their energy costs, including rebates for installing energy-efficient boilers, furnaces and water heaters. The utility company will also remove an old refrigerator from a home free of charge and give the owner a $30 rebate.

“Simply taking an older refrigerator out of your home will reduce, potentially, up to $150 on your utility bill,” said Nat Hancock, program manager for residential energy efficiency at National Grid.