Rising heating oil prices drive a portion of 1M Pa. users to natural gas

| Friday, Nov. 30, 2012, 12:01 a.m.

Rising home heating oil prices are driving homeowners who depend on the fuel to convert to natural gas or find ways to use less oil.

Some are lowering thermostats or adding coal- or wood-burning stoves, said Norman Wildenmann, general manager at Bish Oil Co. in Greensburg. Those who purchase oil are buying in smaller quantities, instead of filling tanks for winter.

“Rather than spending $1,000 or $1,200 at once, they're getting a little at a time,” said Amy Adams, president of Adams Petroleum in Emsworth.

The Northeast has the nation's biggest concentration of heating oil consumers, mostly in rural areas. That includes about 1 million Pennsylvania homes.

Federal energy officials say, based on forecasts for a colder winter than last year's, heating oil bills could rise 19 percent or more to their highest levels ever.

For the week ended Nov. 26, residential heating oil increased 3 cents to an average $4 per gallon, the Department of Energy said. That's nearly 11 cents per gallon higher than a year ago.

With more domestically produced natural gas, the cost gap between the fuels is widening. Heating oil cost 29 percent more than natural gas eight years ago, in terms of energy produced; it's 168 percent more expensive this winter, federal data show.

Heating oil, which refiners produce as a byproduct of crude oil, has risen in price more than retail gasoline.

In North Huntingdon, heating contractor Eichelberger & Sons converted about 20 homes to natural gas heat over the past few years, and about the same number of customers with oil-burning furnaces added electric heat pumps or converted to electric furnaces, said Paul Eichelberger.

“If natural gas is available to them, they're anxiously awaiting a chance to switch to gas,” he said.

Columbia Gas of Pennsylvania said 677 customers converted through October this year from fuel oil to natural gas, and for all of 2011, a total of 765 hooked into Columbia's main lines.

The utility “promoted the benefits of natural gas, including cost savings,” spokeswoman Brynnly Mazzie said, noting that domestic gas production is up 20 percent since 2006 and costs are down more than 50 percent.

Peoples Natural Gas Co. gets inquiries about switching to gas, spokesman Barry Kukovich said, although he did not have numbers. When it's feasible to switch, based on the nearest main line, a customer can hire a plumber to install pipe that connects the home.

“The natural gas utilities are making more of a push and are laying more pipe to offer service to new customers,” state Public Utility Commission spokeswoman Jennifer Kocher.

Jean Beatty had 450 gallons of fuel oil delivered on Thursday to the Murrysville home that she and her husband, Carl Beatty Sr., built in 1973. Back then, fuel oil cost 29 cents a gallon — much less than natural gas — so they never tapped into the gas line about 500 feet away. Her latest supply was $3.69 a gallon.

“I'm really upset. I'm cutting all kinds of corners,” Beatty said.

They keep their thermostat at 60 to 62 degrees overnight and 66 during days. They recently installed a $6,200 heat pump.

In subfreezing weather, a furnace is needed in addition to a heat pump to reach the typical 70-degree indoor temperature, said Eichelberger.

The recent cold spell bumped up prices, said Brian Milne, refined fuels editor at market research firm DTN of Omaha. And because heating oil follows crude oil in price, Middle East events such as the Israel-Hamas conflict have an impact, he said.

Other factors affecting prices: Superstorm Sandy's aftereffects and New York state's move to a higher-grade, lower-sulfur standard for heating oil.

“The market has stabilized, and we shouldn't see many more increases for the rest of the year,” Milne said.

High-priced heating oil is a particular concern now because federal heating assistance was cut to $3.47 billion for the past two years, said Brandon Avila, spokesman for the Campaign for Home Energy Assistance.

“We have a lot of older customers on fixed incomes, and we have more people on energy assistance now than ever,” said Dell Cromie, president of Glassmere Fuel Service Inc. in Tarentum. “They only have so much money to move around.”

Kim Leonard is a staff writer for Trib Total Media. She can be reached at 412-380-5606 or kleonard@tribweb.com.

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