defining 2008

As time goes on with this blog it is becoming apparent that Oil prices are going to define 2008.

Its possible that there was this much buzz in the early 1970s, but I wonder if back then there was such a sense of doom, of storm clouds gathering?

My thoughts for this week are on natural gas. I realized that I have spent way too much time focusing on oil prices and have thought little about heating homes this winter. Its easy to do that when its 90 degreesF outside.

So I checked my NG bills for the winter of 07/08. My coldest most expensive month had me consuming about 130 Centa Cubic feet which is roughly 130 therms of gas. There is a "therm factor" which converts CCF into therms based on the specific calorific value of the gas at the time but its usually close to 1. My price at the time was about $1.10 per therm and we also pay a standing monthly charge of about $25. By the time all the taxes and fees were added we aid $180.

Today's price for natural gas is around $1.52 per therm. roughly a 40% jump. I should expect my worst month this winter (if prices stop rising today) to be around $240. That's if prices magically stop rising.

My provider wont lock my price for me, they are a relatively small co-op and cannot afford to guess incorrectly and lose their shirt. Large providers will allow a 12 month lock but they offer $1.69 if we lock now. Clearly they expect rates to go that high by wintertime (or even slightly higher). Assuming they are accurate in their predictions I should expect to pay about $260 or more for my worst month. That's a significant difference from my $180/month bill.

The lesson here is that while gasoline prices have risen and may continue to rise, we need to be considering home energy - particularly home heating - this winter. many people will be paying over $100/month more to heat their home this winter than they did last year, and for some this will come as a shock.

I'm going to call my wood supplier and hopefully catch a favorable rate for firewood before the mad scramble starts in the fall.

Here is how my domestic energy profile looks for 07/08 and a three year average. The charts suggest I am using more energy which is entirely true. The reason is simple, my 3 year average includes more than one year where we didnt have a child and wasnt heating or cooling the upstairs of the house, nor doing as much laundry, dishes or baths. So you can see in some rough way what having a child means in terms of energy comsumption.