EnergyMiser101

Low Supplies Help Keep Heating Oil Price High

2011-12-02T12:26:10-05:00

It seems like we just can't win on heating-oil prices. The U.S. Energy Department estimates that we're going to pay 10 percent more for heating oil this winter than we did last year, even though temperatures for the season are forecast to be 2 percent higher.

And here's something that isn't going to help: U.S. inventories of diesel fuel and heating oil have dropped to a three-year low, just at a time when we're going to need them the most!

There are a couple of reasons why prices are rising and supplies are dropping:

Crude oil inventories are tighter because the political unrest in Libya has cut the country's exports to near zero.
Competition for diesel fuel, which is essentially heating oil but with a lower sulfur level, is growing as the world's automobile fleet expands. Diesel fuel is a factor in the U.S. for trucking, but it's the primary automobile fuel in most of the rest of the world.

In fact, the U.S. now is a major exporter of diesel and heating oil, also known as distillate fuel. U.S. exports topped 600,000 barrels a day last year, up from 100,000 barrels a day in 2003, according to the

Energy Department. What that means for you and me is that global market forces are at work on our heating-oil supplies. If demand is high elsewhere, that's going to provide an incentive to ship fuel out of the country, making supplies tight, and driving the price up for all in the U.S.

Now this isn't to say there's a shortage of heating oil. There isn't. We'll have enough for our tanks this winter. But according to the Energy Department, supplies are definitely at the lower end of "normal," and scarcity breeds higher prices.

Higher prices nationally don't signal that your suppliers are gouging us. This is just the free market at work. Trying to control the price of petroleum, or any other commodity, doesn't work. The government attempted that in the 1970s and it created a nightmare of regulations that prevented investment and stifled compeition. The reality is that heating oil, or any petroleum product, must compete in a global market now. Unless the European economy collapses with the unfolding debt crisis, the likelihood is that prices will continue to climb.

Save Heating Oil With an Electric Radiator

2011-11-22T14:05:16-05:00

We just got a 170-gallon heating-oil delivery, and at the $4 a gallon we’re paying in New Jersey the bill came to a whopping $680 dollars! If you heat with oil, you’re sure to feel our pain.

But what to do? We’ve insulated. We have storm windows. We’ve added weather-stripping. We have a programmable thermostat. We have a fairly new and efficient furnace. Oh, and we keep the thermostat at a chilly 65 degrees during the day. There’s not much left to try to keep us from the agony of a heating bill that may top $2,900 this winter.

So we’re thinking outside of the box, or, outside of the furnace. The cost of oil has risen much faster than the cost of electricity—so much so that we’re taking a gamble that supplementing our heat with electric radiators will save us money this winter. A quick calculation shows that we might save up to $750, and who wouldn’t want to do that?

Why heat your entire house when your activities may be concentrated in one room at a time? Why not use an electric radiator in the room you’re in to create a zone of warmth, allowing you to use less oil-fired heat for the whole house?

The idea of creating electrically fueled zones of warmth works best if:

Somebody needs to be home during the day.
Activity is concentrated in one or two rooms.

That’s a concept that fits the living style of a growing number of people. My husband and I both work from home, as do about a third of our neighbors. My husband works on the third floor of our 1924-built house. The attic around his work space is well insulated. That’s great for keeping heat in, but first you have to have some heat to keep in!

Chilly Rooms

Our furnace, except for the coldest of days, operates only about three times a day. Our programmable timer lowers the heat at night so that the furnace doesn’t come on at all. The boiler is set to start running about 5:30 a.m. It then returns to life about mid-day and once more in the early evening .

Once the furnace finishes its morning run, the attic room is warm enough, as is the rest of the house. But then things start to cool down. In fact, that room, and some other rooms on the northern side of the house, start to get pretty uncomfortable before the heat kicks in again.

With our electric radiators, we are betting we can eliminate that mid-day heating cycle. My husband has a DeLonghi model in his attic work space and I have a slightly larger and more-sophisticated model from Home Depot in my office room (The best for me. Yay!). If we close the doors to our rooms, our radiators don’t even break a sweat keeping us comfortable and now the thermostat can be programmed to stay low mid-day so the heat stays off.

$5.87 a Cycle

So here’s what we gained. We calculated that we use an average of 4.4 gallons a day to heat our house for a cost of about $17.60 a day. Divide that cost into the three daily heating cycles and you get $5.87 a cycle. Since our aim is to cut out the mid-day cycle, we could save $5.87 a day.

Of course, electricity has a cost. But not much of one. Using our handy electric usage meter, we found we used about 55 cents of electricity per radiator during a 10-hour day. Subtracting that from our $5.87 oil savings nets us about $5 a day. Over 150 days of heating in the winter, the savings could amount to $750.

So we’ll see if our electric solution sparks a savings for us this winter. I’ll let you know in the spring!

Why Is Heating Oil So Expensive This Winter?

2011-03-06T18:09:50-05:00

Ouch! We just got our heating oil bill for a delivery made a few days ago and it was over $700 for just 183 gallons! That really hurts.

The U.S. Energy Department says households will have to spend 30 percent more on heating oil this year than they did last winter, and do we ever feel it! Unfortunately, there isn't much on the horizon to indicate things will get better any time soon.

If you've gotten a similar bill, you know how helpless it makes one feel.

After all, we've picked all the low-hanging fruit in an effort to conserve the precious fuel. We've insulated. We've installed a new furnace, we've plugged leaks around doors and, most importantly, we've kept our thermostat set at a chilly 62 degrees. Why, at times I felt so cold that the only thing that would keep my stiff fingers warm was keeping them wrapped around a hot mug of tea.

Why does the price of heating oil just go up and up and up?

The answer lies in the increase in demand for fuels as the economy has begun to pull out of the worst recession since the Great Depression. The Energy Department says that in 2010 demand for diesel fuel, which is nearly identical to heating oil, grew by 3.6 percent. That's a pretty hefty increase, and the gain is matched by improvements in consumption in much of the developed world. The Energy Department says to expect more of the same this year.

Where is all that diesel fuel going? For trucking. As business at factories improves, diesel-fueled trucks ship more goods. Increasing consumer confidence means people start buying more goods, and those goods are shipped to stores or from Web sites like Amazon by trucks that burn diesel fuel.

The more a product is in demand, the higher the price goes. So, fine, why not let the price for diesel fuel for trucks rise. Why does it have to affect heating oil?

The answer goes back to the chemical similarity between diesel fuel and heating oil. They're really the same product except for differences in the sulfur content. The global price for these fuels is essentially set on futures exchanges in New York and London, and there's no way in those exchanges to differentiate between the diesel fuel used for trucking and the heating oil used for homes.

Prices on the futures exchanges keep going up because the traders and companies buying and selling the fuel are making a guess that as the global economy continues to improve, demand will continue to rise. And that leads to higher prices.

Higher Crude Oil Prices

And finally, the cost of crude oil, from which heating oil is made, is on the upswing. Crude is going up because the expectation is that global demand will rise as economies of developed nations improve and as emerging economies, such as China and India, continue to grow. And now, the unrest in the Middle East is putting further upward pressure on crude oil prices because traders are locking in purchases for fear that supplies from key exporting countries, such as Libya, may be cut off.

We're a Minority

Those of us who use heating oil don't have much say because we're more of a minority than you might think! Only about 8 million, or 7 percent, of the 111 million households in the U.S. use heating oil. The rest heat their homes mostly with either natural gas or electricity. Of those 8 million homes, 80 percent are located in the Northeast, primarily in five states: New York, Massachusetts, Connecticut, Pennsylvania and New Jersey.

Will it get any better? I hate to say it, but maybe not. Global competition for fuels is only going to grow, and the outlook for economic growth in the U.S. is also strong. There's nothing on the horizon that would work to push prices down, so the only way we may be able to fight back is to cut down consumption--turn down that thermostat and turn up the effort to improve the energy efficiency of our houses--or to switch to natural gas.

How Adding Insulation Cut Our Heating-Oil Use

2010-10-23T16:54:06-04:00

The new winter heating oil season is underway and while we're looking forward to toasty nights by the fireplace, today we're celebrating the past. After tallying our bills for last season we found that we cut our consumption of the fuel for the fourth straight year! Our 2,100-square-foot house consumed 571 gallons, a 14 percent reduction from the winter of 2009-2010.

There's one reason for this year's savings--insulation. Well, to be completely honest, it was a warmer winter than the year before, too, so that had something to do with it. Still, we're giving the lion's share of the credit to the fluffy stuff we had blown into our attic.

For those of you new to this blog, we've been on a ten-year quest to lower our heating oil bills through a combination of new hardware, conservation, and a bit of attitude change about the cold.

It's been quite a success story. In our first winter in our 1924-built wood-frame house, we burned through 1,500 gallons of heating oil. Since then, we've replaced our old furnace, installed a programmable thermostat, sealed leaky doors, removed air-conditioners from windows, and altered, somewhat, our notion of just how warm we're supposed to feel during a New Jersey winter. You can read the entire story by following this link to an earlier post.

But this story is about our insulation. After having a home energy audit in the spring of 2009, we learned that while our attic was insulated, the amount of protection was nowhere near what it should have been. We contracted with a home-insulation company that spent a day blowing treated cellulose under attic floorboards and into hidden spaces behind walls. You can read all about it by looking at these posts:

We spent $1,200 on the insulation job. Was it worth it?

We used about 100 gallons less oil. Our average price was close to $3 a gallon last year, so we saved about $300. That means the job may pay for itself in about four years, and less if heating oil prices continue to escalate--as I think they will.

Also, we definitely felt warmer, especially in our bedroom, which is under the attic, but even on our first floor. I think less heat escaped into that wasteland of old suitcases, school papers and discarded clothing.

So what's next for this year on the energy-saving agenda? I'd like to get our basement steam pipes re-insulated. We had all the asbestos removed from the pipes in 2002 when we replaced our 80-year-old steam boiler. Ever since then the basement has been toasty warm because of the unprotected pipes, but that's heat energy we'd rather have upstairs. The man who conducted our energy audit a couple years ago said that we're wasting energy because pipes that are meant to be steam conductors are actually steam radiators.

We can buy insulation for some of the smaller pipes at our local home center, but we don't have a clue how to go about insulating some of the fatter main pipes. It'll be fun to find out, however, and we'll let you know how it goes! Have any of you readers insulated your steam pipes? Let me know!

How Much Energy Does Your HDTV Use?

2010-02-21T16:12:17-05:00

A reader, concerned about a potential rise in her electricity bill, wrote to me the other day with some questions about her new, larger TV and its energy usage. The distractions of snow days and the long Presidents Day weekend delayed my response, but what I found out was interesting. A larger TV screen will cost you more money, but not that much more.

Sandra said that she bought a 32-inch Insignia high definition television that has an Energy Star rating of 150 watts to replace her 5-year-old 20-inch Magnavox Energy Star tube TV. She didn't know the wattage of her old set, but she wondered how much this larger, newer TV would affect her electricity bill.

I'm not an expert on these things, but I consulted with my husband, who is more of an appliance geek than I am. He was more than happy to impress me with his know-how.

Is It LCD or Plasma?

Regarding your HDTV, a lot depends on whether it has an LCD (liquid crystal display) screen or a Plasma screen. Plasma sets typically use almost twice the amount of electricity as LCD sets. So, when you go to buy a new set, it's important to ask whether its LCD or Plasma. Based on my reader's description of her set's power usage, and for the sake of analysis, I assumed it was the LCD variety.

We all know that luxuries cost money, and the bad news is that a bigger set is going to consume more energy and cost more to operate. To my surprise, screen size is still the biggest determinant of energy use in the TV world and replacing a 20-inch screen with a 32-inch screen, like my reader did, is going to cost more--but how much more?

Not a Huge Cost Difference

The good news is that it's probably not going to amount to a lot of money.

We're still using our old 25-inch Zenith tube TV, and its power consumption is 80 watts. A 20 inch TV like Sandra had probably used less energy--let's say around 75 watts. If she watched that set for an average of five hours a day, less time than the average U.S. household watches TV, believe it or not, it would cost her about 6 cents per day.

A new 32-inch set like Sandra purchased that is fully rated at 150 watts will probably cost her about 12 cents per day to operate, assuming she has it on the same 5 hours each day.

That's double the cost, but still not that much money. It translates into roughly $1.80 each month for the set with the 20-inch screen versus about $3.60 for a 32-inch screen. Also, that 150-watt rating on Sandra's new 32-inch screen may be a little on the high side because manufacturers tend to build a safety margin into their hardware.

So if you really want to save some money while you're sitting in front of the tube, buy a smaller screen. You might also want to turn down the brightness. That's what the energy saving mode on your TV does. For this tip and other interesting information on HDTVs see the article on this CNET site. Happy viewing!

Beat the Cold With an Electric Radiator

2010-01-05T21:29:52-05:00

It got down to 14 degrees in northern New Jersey over the weekend, and the wind was howling through the trees—not a recipe for a toasty warm house when we keep the thermostat at 62 degrees. But upstairs in the spare bedroom where our main computer is located I was snug because of the new oil-filled electric space heater we bought for less than $60 at Home Depot.

Also, it didn't cost an arm and a leg to use the heater. Used sparingly, the heater cost us about 5.5 cents for each hour it was in use. Used injudiciously, that cost can go much higher!

I love the winter, but the cold makes it really difficult to work at a keyboard. The relative inactivity makes my body feel like it's an icicle in short order. The choice before me was to keep the whole house at a higher temperature, a waste when our daughter is in school and my husband is at the office, or to seek out a supplemental heat source.

We did some not-very-scientific research about ways to heat a room. One choice was an electric resistance heater. You turn it on and some heating elements begin to glow similar to the way an electric stove works. I didn't like the idea because it seemed that as soon as you turned the unit off, it stopped generating heat.

A better alternative to us was the oil-filled electric radiator. The power would cycle on and off, based on where you set the thermostat, but the heat output would be constant because the oil inside the unit heated the metal fins and radiated a steady heat.

The unit we bought had a timer, three heat settings, and a thermostat. I set the unit to an extravagant 68 degrees and the heater put out a nice radiant warmth that made me never want to leave the blogosphere, while the outside temperature stayed at about 38 degrees. I helped the process along by closing the door to the room so the warmth wouldn't escape out the doorway and into the hallway.

Three Power Settings

Just how much electricity does the unit use? To get the answer, we took out our handy Kill-a-Watt electrical use meter and plugged the unit into it. The unit started out at the highest setting to bring the temperature up quickly. That mode used 1,376 watts, according to our Kill-a-Watt—about the same amount used by an electric iron.

After a while the radiator automatically stepped down to the middle level, drawing 758 watts. Eventually it went to the lowest setting, drawing about 687 watts. That's still pretty significant, but I noticed that the radiator powered off and on and never went back to the higher settings to keep the room warm, so it wasn't drawing current all the time.

It wasn't long before guilt set in. Just how much does it cost to run this supplemental heating source? The answer is that it's not too bad—about 48 cents for nine hours of heating, enough for me to work on EnergyMiser 101 and on my job as a petrochemical reporter, with breaks for errands, chauffeuring, and helping our daughter with her homework.

Misers at Work

We deployed the heating unit in a pretty miserly way. Additional use brings additional costs. Leave the unit on for 24 hours and the cost jumps to $1.29. That comes to almost $39 a month, an amount that just about matches what we spend for all of our electrical usage in a month!

For supplemental heat, however, our electric radiator can't be beat. What are your experiences with supplemental heating units?

State Aids Removal of Underground Oil Tanks

2009-11-22T20:08:10-05:00

You may be noticing some large, deep holes in front yards around town and wondering what's going on. Well, don't panic. It's not some strange burial ritual, but rather a sign that many residents in Montclair and other New Jersey towns are taking advantage of financial incentives offered by the state for removing old, underground oil tanks before they start to leak because of rust and old age.

Leaking underground heating oil tanks are a growing potential environmental problem for millions of homes in New Jersey and throughout the Northeast, because oil seeping from a tank can pollute the ground around your house and your neighbors' houses, and work its way into the water table, contaminating the drinking water supply.

New Jersey has recognized the environmental threat and it's offering financial aid to homeowners to get those tanks out of the ground, hopefully before environmental damage occurs. That's important because an ounce of prevention in this case is worth a pound of cure.

More than 6 million homes in the Northeast use heating oil, according to the U.S. Energy Department. It isn't known how many of those homes have their tanks underground, instead of, for example, in a basement. The number is undoubtedly in the millions, however, and for many homeowners, an underground tank can be a ticking time bomb.

While removal of a tank and installation of a new one in, say, a basement, can cost in the neighborhood of $2,000, that cost can jump to $15,000 and beyond if the tank is leaking. So, even if your underground tank is still doing its job, you may want to consider removing it now to save yourself a lot of heartache.

Underground tanks are becoming increasingly vulnerable to leaks because many were installed in the 1940s or 1950s when homeowners converted their coal boilers to oil, or when houses were built in the post-war construction boom. Manufacturers at the time weren't particularly concerned about the quality of the metal used for the tanks. Many installed in the late 1940s in New Jersey, for example, were assembled from WWII ship scrap metal, according to Terry Doran of Fuel Tank Maintenance Service in Carlstadt, N.J. They're starting to reach the end of their useful life.

10 Permits a Week

Bob McLoughlin, construction official and electrical sub-cod inspector for Montclair, said that the town is issuing about 10 permits per week for tank removal. While tank removal is typically higher just before the heating oil season begins in the Northeast, McLoughlin said that 10 per week is a particularly high number and that it's high because the state program.

The New Jersey Economic Development Authority (NJ EDA), handles issues regarding removal of non-leaking underground oil tanks. (I haven't looked into other states, but the best bet is probably to go on your state EPA Web site.) If you find out that your underground tank is leaking, you are still eligible for financial assistance, but you need to apply for that assistance first at the New Jersey Department of Environmental Protection (NJ DEP).

Financial Aid

You can get as much as $1,200 for closure and removal of a non-leaking underground tank and as much as $3,000 for replacement with a new, above-ground tank. (Businesses looking for financial help can get it too, but it comes in the form of an interest free loan instead of a grant.)

Leaking tanks are a much bigger deal. Jeanette Cleary of NJ DEP said that the average homeowner's cost (prior to reimbursement) to remove a leaking tank is $12,000 to $15,000, but that it can reach as high as $100,000 if the oil reaches the water table. Homeowners with a leaking tank first have to apply in writing to their insurance company to see whether any costs are covered by their homeowner's policy or, if they're lucky, by a separate tank-insurance policy. Then, they have to present a copy of their written request to the state DEP. The state will pick up any expenses not covered by insurance, according to Cleary.

One sure way to find out if your tank is leaking is to have the ground around the tank tested. But this isn't cheap, and it comes out of your pocket. My neighbor had her ground tested for about $700.

Eligibility

If you want state aid to remove your old tank, the first thing you have to do is find out if you're eligible. To do this you go to the most frequently asked questions part of the NJ EDA Web site. To receive state aid you have to have a taxable income not greater than $250,000 and a net worth not greater than $500,000, excluding the value of your primary residence and your pensions (401Ks and IRAs). Details of eligibility can be viewed on the frequently asked questions page.

Once you determine that you're eligible and that you want to go ahead with the excavation, you need to go to their list of certified contractors, found on the NJ EDA Web site. You must use one of these contractors if you want to get state reimbursement for the job.

Reimbursement is the operative word. Homeowners should know that they must make the initial investment in tank removal, and clean-up , if that's the case, and then apply for a grant to cover the costs.

Hidden Costs

But people should know that there are many hidden costs when it comes to oil-tank removal. Terry Doran of Fuel Tank Maintenance Service, the company that removed my neighbor's tank, said that the initial out-of-pocket expense for the homeowner was typically $1,500 to $2,000 if the tank is under dirt (excluding ground tests).

The cost can vary a lot depending on what's in the tank. For example, it typically costs around 75 cents per gallon to dispose of sludge/water in your tank. Expenses that are included in the cost of tank removal are town permits, which can be $50 to $10, digging out the old tank, disposing of the tank, and basic back-filling of the excavation spot. I saw my friend's former tank site once it was backfilled, and it clearly still needed a lot of landscaping, which can run into the thousands of dollars.

Lower Home Value

All of these tank problems can seriously affect the money you get for your house when it comes time to sell or the money you pay for a house when it comes time to buy.

One of my neighbors had to have a tank removed from her old house before she could sell it. A few years earlier they discovered that they had a corroded feeder pipe that ran from their underground oil tank to their furnace and they had it replaced. But what they didn't realize was that the underground oil tank was corroding too.

When they put their house on the market, they failed inspection because their soil was contaminated. Luckily, their tank sat on bedrock, and the oil leak never reached their water table. They also had tank insurance, but the ordeal still cost them dearly. It was around $2,000 out of their wallet to replace their Belgian block trim, patch their driveway, and plant grass seed.

Lost Bids

But, worst of all, they lost two of the three bids they had on their house. And they were handsome, above-asking-price bids. Their third bidder stuck around, but they ended up getting considerably less money for the house than they would have if the oil tank problem hadn't surfaced.

One of my other neighbors also had an oil tank nightmare to tell. About a year ago, before they moved to our block, they bid on a house a few streets away only to find out that oil was leaking from the property's underground oil tank and that the oil had not only reached several other yards, but had seeped into the water table.

Once the oil reaches the water table and can potentially affect drinking water it's a much bigger and much costlier problem. They understandably chose to withdraw their bid, and consequently ended up paying what everyone on the block considers too much for the house they now live in.

This was most unfortunate for them, but also for the rest of us because it skewed the estimated value of our homes, not a good thing, especially in a down market when you may be ready to challenge the appraised value to your house.

No Deadline

So, if you are a New Jersey homeowner with an underground oil tank, whether you're planning to sell that home or stay put for a long time, you should seriously consider having the old tank removed.

The state says the reimbursement program currently has no deadline, but it still seems prudent to tackle the problem of an underground tank now, while the money is there. Sure, it will be a headache, but that headache could turn into a nasty migraine the longer you wait.

Crock Pot Cooking Saves Energy

2009-11-09T19:44:10-05:00

If you want an energy efficient, convenient, and delicious dinner, try using a crock pot. I saved about 80 cents by using my slow cooker instead of the stove top to make a dinner recently, and everyone loved the results.

There are tons of savory crock pot recipes on line. A few weeks ago we had a friend staying and I thought I'd drag out my old crock pot and put it to the test. On a cold, damp morning I found a recipe for an autumn stew that sounded really good. I've made many stews on the stove top, but they require being at home to watch the pot.

Typically, I simmer a beef stew on my gas stove for at least three hours. I calculated with my handy electrical usage meter that this requires about $1 worth of electricity. Running my electric slow cooker for the eight hours it took to make a stew cost only 20 cents! So, I saved 80 cents and if I did this once a week all year long I could pocket close to $50! But, (and this is the best part), the stew I made tasted better than any I ever made on a stove top.

The nice thing about it is that I spent about ½ hour preparing the meal at 8:00 in the morning after I took my daughter to school. Then I left the house for the better part of the day. By 4:30 that night the stew was ready.

Perfect End to Rainy Day

I turned my crock pot to warm and finished doing some chores. Around 6:30 I boiled noodles and cut some Italian bread. We broke out a bottle of wine when my husband and our friend came home at around 7:00 and enjoyed it with a very satisfying meal of stew over warm noodles. The perfect end to a dreary, rainy day.

My slow cooker has found a new life. Last week I made a fish chowder with halibut that even my daughter said was “really, really good.” Coming from a twelve-year-old girl, that's high praise!

RECIPE FOR AUTUMN VEGETABLE BEEF STEW

Ingredients:

1 ½ pounds lean stewing beef

1 slice bacon, (diced)

1 cup chopped onion (I used leeks)

2 cups beef broth

1 cup apple cider

5-6 medium potatoes (diced)

2 carrots (peeled and sliced thin)

2 ribs celery (ditto)

1 ½ cups diced rutabaga (I prefer parsnips)

1 cup of fresh green beans (I added for color)

1 bay leaf

½ teaspoon dried rosemary

a dash of pepper

2 tablespoons flour

2 tablespoons cold water

1 tablespoon fresh chopped parsley

The combo flavors of cider and bacon make this really tasty. Just cook the bacon, beef and onions over medium heat until beef is browned and bacon is cooked. Drain the grease and add the beef, bacon, onions along with beef broth, apple cider, potatoes, carrots, celery, parsnips, bay leaf, rosemary, and pepper. Cover and cook 7 to 9 hours on medium. Combine flour with cold water to form a smooth mixture. Stir into beef mixture, turn to high and cook 15 minutes longer. The recipe says it serves 4-6, but I added a little more beef and veggies than called for, put it over noodles, and served 7 people.

Oil Supply Is Plentiful, but Prices Rise Anyway

2009-11-01T18:18:12-05:00

If you notice higher gasoline prices at your local pump, don't think it's because there isn't enough oil to go around. Supplies of refined products, both gasoline and heating oil, are plentiful. Gasoline stocks rose this past week, but prices climbed higher anyway, which is contrary to what we all learned in Economics 101. In fact, there hasn't even been a significant hurricane, something that often causes refinery shutdowns and temporary refined-product shortages at this time of year.

Oil prices (and that includes prices for gasoline and heating oil) are acting completely independently of supply/demand fundamentals. It's the recent rise in the stock market and the weakening of the U.S. dollar against other currencies that are making the fuels you consume more expensive. Traders believe that oil, just like gold, will hold its value as currencies decline.

Oil Is the New Gold

2009-10-24T19:42:32-04:00

Prices for gasoline and heating oil rose in the U.S. this past week, following crude oil. There were no major supply/demand fundamentals driving prices up, and as I mentioned in an earlier entry, supplies of refined products, particularly heating oil, are high. The major factor pushing fuels higher is the declining value of the dollar relative to other currencies.

Speculators are trading their dollars for oil because they believe that oil will do a better job of holding its value. In the past two years, as the economy steadily weakened, oil has become more of a financial instrument, like gold, and has begun to respond less to to changes in supply and demand.

Lessons from Montclair's Recycle Master

2009-10-17T19:51:35-04:00

If you've ever wondered what happens to the old newspapers, water bottles and laundry detergent containers you put at your curb once a week, you might be surprised to learn where they go and what they're worth. The items that I thought had value didn't, but things that I thought were worthless were the stars of the recycle pile.

Environment and economics are the driving factors behind any recycling program. That's according to Craig Brandon, Montclair N.J.'s Supervisor of Solid Waste Management. Craig spent a good hour explaining some of the ins and outs of the recycling business to me when I visited him in his office.

Right now Montclair has a five-year contract to sell all of its recycled plastic/metal to a company in Clifton, N.J., called Green Sky. I talked with Green Sky and found that they take all of Montclair's metal and plastic waste in one unsorted lot. Their job is to separate the plastic from the metal and bale each one into parcels of about 1,250 pounds each. Those bales are then sold to plastic or metal processors.

Right now Green Sky pays our town $15 per ton for mixed plastic containers (marked No. 1 or No. 2) and metal. Craig told me that companies like Green Sky don't really want the plastic—it's just not nearly as valuable as the metal. There's an oversupply of plastic and much of it ends up being exported to place like China. That's a main reason it commands comparatively little money.

Precious Paper

Our town makes even more money for the paper it recycles than it gets for the metal. Companies like Green Sky dole out $65 per ton for clean paper, which is mostly paper that hasn't been soiled by food. Cardboard commands more than that. Right now it's about $80 per ton. Clean paper and cardboard, it seems, are relatively hot commodities in the recycle world

I was wondering how much revenue the town got for all its recyclable garbage. I didn't get a total- year figure, but I was told that in 2008 Montclair recycled 3,900 tons of paper and at $65 per ton that alone puts $253,500 in the bank for the town.

Revenue Drain

It sounds like a lot of money, but the recycle business is actually a net revenue drain—at least in our neck of the woods. It actually costs Montclair more money to collect all the recyclables than the town earns from recycling. The costs include (but aren't limited to) paying the employees who collect the materials and purchasing and operating the trucks.

Speaking of trucks, after a very edifying lesson in recycling, Craig made me an offer I couldn't refuse. He took me out in his flatbed truck and we visited some local recycling bins, particularly those of neighborhood schools and businesses. What an eye-opener!

Craig made a point of telling me that Montclair is comparatively good at recycling. But it seems that the large institutions in town are not very diligent about separating precious paper from plastic and metal.

It Wasn't the Kids

We looked in a bunch of bins and saw through clear plastic garbage bags that piles of clean paper (used but not soiled) were mixed with bottles and cans. And this was on the Tuesday morning after Columbus Day. Kids were not in school the previous day, but teachers were in meetings, so the only conclusion was that the adults had mixed the paper with the other recyclables.

This is a real shame because it costs the town dearly in revenue! So this is a lesson for teachers as well as students. We should all make an effort to separate our paper from metal and plastic. It's good for the environment and great for the pocketbook. That's especially good news in this fragile economy.

This Compost Event Can Save You Money

2009-10-12T14:24:27-04:00

I took my daughter to the YMCA this morning and picked up a flier on composting that caught my eye. It's a great way to save energy because you don't have to buy fertilizer, which has natural gas as a raw material, as I wrote about in a previous post.

Our town, Montclair, NJ, is trying to make composting easier for its residents, and it's sponsoring a composting event Saturday, October 17 from 11 a.m. to 3 p.m. at Edgemont Park.

Now this blog has readers from as far away as New Zealand, so, obviously a lot of you aren't going to make it. But read on anyway because you might pick up some ideas that you can use wherever you live!

Not only is Montclair offering free compost for your garden (but you have to bring your own bags and shovels), but you can also learn about composting and purchase a compost bin and turning tool at a bargain price.

The bins can be purchased for around $52, about half of what they would cost if bought retail. They're cylindrical (narrower at the bottom) and can hold about 1 cubic yard of compost. They come in two pieces, so they can easily fit in the back seat of most cars.

Visitors to the event will also be able to buy turning tools, very helpful in aerating compost. I'm told that turning your compost once a week is extremely important if you want to produce the best quality organic material. The tools, which usually cost about $25 retail, will be available for around $15.

The event will also give participants tips on "green" yard care/gardening, water conservation, backyard bird and butterfly habitats and related topics. More information can be obtained from the Department of Environmental Affairs "Compost Hotline" at +1 (973) 509-5721.

See An Energy-Related Film

Also in Montclair this Thursday October 15, at 6:30 pm at the main public library will be a showing of two energy-related films: Kilowatt Hours and Unlimited. The first film explains where electricity comes from and also gives valuable tips on how to save energy in your own home.

The second film, which was made by a local resident, talks about our unlimited opportunities to cut carbon emissions. After the films, which take roughly an hour in total to watch, there will be an opportunity to ask questions and discuss energy-related issues.

So, if you can't make it to the event, how about sharing some of your ideas or questions, and we can have our own educational event right here on this blog!

High Stocks Drive Prices Lower

2009-10-08T09:45:26-04:00

       When it comes to both gasoline and heating oil prices, consumers could be in for some significant price relief. The key word here is supply, or more precisely, oversupply.
     The Energy Department reported lower spot prices for gasoline in all major markets for the week ending November 2. Prices for gasoline have been declining for weeks because of reduced demand and a build up of inventories. Lower consumption partially reflects the seasonal shift in driving habits, but a much bigger factor is the weak economy and the high unemployment rate which is keeping a lot of drivers off the road.
    The trend in oversupply is even more pronounced in the heating oil market. The Energy Department resumed reporting distillate prices this week and will continue to do so until mid-March. This market has been decimated by the weak economy and the fall in trucking traffic.
   US inventories of distillate are almost 50 percent higher now than they were at this time last year. This can only be good news for heating oil buyers. Gasoline stocks are up around 25 percent and crude oil inventories are nearly 34 percent higher than a year ago. Basically, we're awash in refined products!

Winter Forecast Favors Heating Savings

2009-10-06T17:48:53-04:00

The Energy information Administration (EIA) published its winter fuels outlook today, and it brings good news for homeowners. This winter, the EIA said it expects the average US household to spend $84 or 8% less on its home heating bill than it did last winter. Their projections are based on National Oceanic and Atmospheric Administration's (NOAA)most recent forecast of 2009-2010 winter weather, which is calling for it to be 1 percent warmer than last year.

But the projected savings vary, depending on what fuel you use and in what area of the country you live. Homeowners using natural gas or propane could see savings of 12% and 14% respectively. Record high natural gas stocks work in their favor. Those using electricity and heating oil could reduce their bills from last year too, but only by only about 2 percent. That's only because of warmer weather.

If weather forecasts are wrong, the picture changes a lot. If the weather in the US is 10 percent warmer than currently forecast, the savings from last year go up sharply to 13 % for heating oil buyers to 21% and 22% for natural gas and propane users respectively. Those with electric heat could see as much as a 6 % savings.

Let's Hope Forecast Is Correct

The scary part is if the weather is 10% colder than currently forecast. High stocks mean those with natural gas or propane heat will still save; just not as much—maybe 5 or 6 %. Those with electric heat will probably see a slight rise in their bill if it's colder than expected—maybe 2 %. But the unlucky ones warmed by oil could see their bills rise by around 10 percent. Let's hope the NOAA got their weather forecast right!

High Heating Oil Supplies May Lower Prices

2009-10-03T18:01:10-04:00

It' s supposed to reach nearly 70 degrees this coming week in New Jersey, but the other day when the temperature inside our house dipped to around 63 degrees and our heat came on I knew that this week's forecast was just a big tease. You can't stop the cold from coming, but high distillate inventories could provide some price relief this winter for those of us with oil heat.

Current U.S. stocks of distillates, which include heating oil, diesel and jet fuel, are unusually high, according to the Energy Information Administration. That's because as the economy weakened, demand for distillates declined more quickly than supply. The Energy Department says U.S. distillate inventories are the highest 1983! What happened?

Well, as weak retail markets reduced truck, rail and bus traffic, diesel demand slumped. Less air travel cut diesel consumption too. Gasoline inventories also rose, but not as much as diesel.

The domestic distillate market was not the only problem. Exports slumped too. Refiners can shift their operations to make a higher ratio of gasoline to distillate or to make a higher ratio of distillate to gasoline. Last year, most U.S. refiners opted to make more distillate because they had high hopes for the export market, particularly China.

There was so much demand from China earlier last year, as their economy thrived and as they prepared for the Olympic games that it bid up distillate prices around the world. But after the 2008 Olympics, the world economy slowed down, China's demand weakened, and U.S. refiners went from tight supply and higher prices to plentiful supply and weaker prices. The average price for U.S. diesel fuel at the end of September was $2.60 per gallon, down from $3.96 per gallon in September 2008.

So, what's in store for us this winter? Weather forecasters disagree on temperature trends, with some saying this could be the coldest winter in a decade because of a weaker warm current in the Pacific (El Nino), and others saying that it could be warmer than last year because of less snow cover in Siberia.

Whatever the temperature, many homes will need heat, and many homeowners will have to buy oil. Hopefully, in this tough economy, we'll be the beneficiaries of weaker diesel demand, higher distillate inventories and softer heating oil prices.