A place to discuss the forums as we all learn this new system.
I've spent the last few days looking at numbers to try and figure out what the most likely scenario is for fossil fuel and heating prices between now and the end of the year.
At this point, it looks like crude is going to trade in the $106-$118 US pb range until the heating season is underway and then (assuming an average or worse winter) crude prices will go above $118 US pb and stay there for the rest of the heating season.
These are =structural= prices, eg the prices to be expected if no unusual events occur. Unusual episodic interruptions in supply or demand would very likely result in crude prices outside these ranges.
The Fed seems unlikely to raise the FFR above 2.25% in the near term given the weakness in the US economy. That is also going to tend to keep crude prices higher rather than lower.
Those that heat with natural gas are not going to avoid higher prices either. Propane and NG supplies are below the "floor" of their historical trading ranges for this time of year and have been for some time.
In short, your fossil fuel bill this winter is going to be more than 1.75x greater than it was last winter unless you do something about it.
For the poorer or those on lower fixed incomes, this is literally a recipe for a life threatening heating season.
What can be done;
ON A PERSONAL LEVEL:
1= winterize your home as best you can.
2= if you do not have programmable thermostats installed, do it.
3= be prepared to keep your house at the lowest possible temperature you can accept.
4= plan out and budget your total fossil fuel consumption every month like you would your housing and food bills.
5= if you can afford to make more permanently significant improvements to your fossil fuel use, do it.
a= energy star has a rebate program that will pay $150 if you replace a non conforming major appliance with one that is. They have a program that will give a $1500 rebate for replacing a non compliant furnace with one that is (you must pay for the utility affected to qualify for the rebate in question.)
b= if you are regularly driving a fuel hog, do whatever you have to to stop doing so.
ON A COMMUNITY LEVEL:
1= Those of us who belong to organizations that help the less fortunate should push to see that those we are helping do as much of the above list as possible. Financial aid for that purpose combined with fuel assistance will stretch philanthropic dollars farther than simply providing fuel or heating assistance.
2= Get your community government to plan ahead. Fuel and heating supplies for community resources (plows, school buses, garbage trucks, First Responder Vehicles, etc) and community buildings are not going to magically appear or be cheaper. Communities should be buying supplies now, for all of these purposes, in preparation for the higher prices of the heating season. Picture the consequences if your community does not have enough fuel or heat for critical services like fire, police, road plowing, schools, etc. Get involved in your community government and do what you can to make sure your community prepares appropriately.
3= If dollars are available, make as many permanent improvements as you can to your community's energy use profile.
ON A STATE AND NATIONAL LEVEL:
1= ALL of us should be writing to our legislators to see that the above kinds of activities are pursued in the state and national government organizations and on those levels as well as the more grassroots ones.
2= State and national governments need to stockpile fossil fuels for this heating season to a greater extent than they have before. On the Federal level, this means the US government should be augmenting the National Strategic Petroleum Reserve for the =specific= purpose of stabilizing US domestic supply and prices this heating season.
Voltaire:ON A PERSONAL LEVEL:1= winterize your home as best you can.2= if you do not have programmable thermostats installed, do it.3= be prepared to keep your house at the lowest possible temperature you can accept.4= plan out and budget your total fossil fuel consumption every month like you would your housing and food bills.5= if you can afford to make more permanently significant improvements to your fossil fuel use, do it.a= energy star has a rebate program that will pay $150 if you replace a non conforming major appliance with one that is. They have a program that will give a $1500 rebate for replacing a non compliant furnace with one that is (you must pay for the utility affected to qualify for the rebate in question.)b= if you are regularly driving a fuel hog, do whatever you have to to stop doing so.
Now what?
Jonathan Bartlett:1: Done in 1992 after first winter. Double pane windows throughout, extra attic insulation, roof ridge vent, outside air source for burner combustion.
You can get a free heat map done of your house. How's the R value of your walls and baseboards? Are all your pipes carrying hot H2O insulated? How efficient is your furnace in specific and your heating system in general?
Jonathan Bartlett:4: Our house payment is fixed and predictable. Our menu is predictable, but food price isn't. Food goes up 50% do I eat 1/2 as much? Weather is definitely not predictable. It's not easy to predict how cold and for how long and how much solar gain and such to 'budget' heating bill.
Yes, it's a nasty problem. I keep track of my bills and use the old ones plus recent price change behavior to predict near term bills. I can usually hit it within 10% for regular expenses, so I remove 2x that, a 20% margin of error, from the budget for discretionary expenses every month as an insurance policy against being wrong in my predictions. Any excess is rolled over into next month's discretionary fund Whenever my predictions are too low, I expand both margins of error until I'm not too low anymore.
One definite effect of the volatility of recent prices: discretionary spending has dropped to near zero as the need to set aside greater amounts of padding imposes itself.
One's utility bills can be made far more predictable if one is willing to use the averaging programs of your utility company.
Jonathan Bartlett:a: My municipal (town owned, non-profit) electrical utility is not a participating member of the rebate consortiums. No rebates.
OTOH, your 'e bill is probably already lower than the average because you have a town owned NFP EPG. Also, the E-Star rebates for better appliances, furnaces, CFL, etc are federal. You should be able to get them regardless.
Your local utility's rebate or lack thereof was not the only thing I was implying or stating when talking about the municipal situation. For instance, every municipality should be stockpiling petroleum supplies for this winter before the prices go up significantly again.
Jonathan Bartlett:b: Two VW diesels, 50 and 40 mpg respectively, diesel tractor/lawnmower/snowthrower, all running high bio blends in winter, or B100 in summer. I'm bicycle commuting as much as I can when there's no precipitation and it's above 20F.
The price of palm oil and a few other SVOs dropped by like 50% within the last few weeks. If you are a part of a bd operation or make your own bd, Stock Up!
...and remember, folks like you are already much better off and much better prepared than the average American is for what's coming. Your fossil fuel bill is probably 1/4 -1/2 what the average person around you pays for the same standard of living.
Good stuff, Voltaire! I agree with you wholeheartedly.
Voltaire:You can get a free heat map done of your house.
"'To be neutral and to be passive is to collaborate with whatever is going on.' Democracy is not just a counting-up of votes, but a counting-up of actions.'" ~Howard Zinn
Ah, I changed to the keywords "thermal home scan" and found some pay services, but free would be nice.
Designed and built our own home two years ago. Not a worry in the world regarding our utility bills, in fact I laugh every time I write the check.
Two '96 VW TDI B4 variants, '87 MB 300TD, '97 Ram 2500 Cummins, '89 Ford F250 diesel, Kubota lawn tractor, Diesel Generator... 31 Cylinders Kicking on the Sweet Sauce of the Soybean
ebztz: Voltaire:You can get a free heat map done of your house.Nifty. I'd like to have this done. Do you have any specifics? I Googled "free heat map" and related phrases, but apparently "heat map" is also a internet term, so I didn't find anything. I did find this though, which is cool.
Last year the PBS program _This Old House_ had an episode that included info on federal programs to get a free thermal scan done of your house,
I can't find the reference quickly, but maybe these starting points will help.
http://www.pbs.org/thisoldhouse/articles/
http://www.thisoldhouse.com/toh/
My wife definitely remembers the episode and that for some time last year the TOH website had pointers to the info on it.
No promises as to results, but I'll keep poking around and see if I can find something definitive. If you know a General Contractor, they might know or be able to find the info quickly. Another possibility is to get in touch with your local heating utility (gas or heating oil company).
Sorry I don't have this info at my finger tips.
more info on where prices are likely to be headed:
from (2008 Aug 20) edition of The US EIA _This Week In Petroleum_ http://tonto.eia.doe.gov/oog/info/twip/twipprint.html
"where do we expect prices to go from here? While we are not quite as confident in forecasting the near-term path for oil prices as Michael Phelps might be about winning his next race, we do think that crude oil prices may settle in the $120 - $130 per barrel range for most of the remainder of the year, barring any additional major supply disruptions from hurricanes or other events such as the current conflict in Georgia. This is largely due to our projection that year-over-year declines in U.S. oil consumption will not be as large in the second half of the year, in part due to relatively weak consumption in the second half of last year and also to the perceived end of the upward surge in prices. Balancing out the forecasted decreases in U.S. consumption, we project relatively strong continued demand growth in non-OECD countries. Finally, as prices drop, Saudi Arabia may cut back on its recent increase in production, which could halt the most recent price decline. Of course, whether or not this scenario unfolds is anyone’s guess, but understanding the factors behind the increase and recent decline in oil prices is important in understanding what might come next in the prices we pay at the pump."
Here are gifs of the supply charts from the same TWIP:
http://tonto.eia.doe.gov/oog/info/twip/crstuss.gif
http://tonto.eia.doe.gov/oog/info/twip/disstuss.gif
http://tonto.eia.doe.gov/oog/info/twip/gtstuss.gif
http://tonto.eia.doe.gov/oog/info/twip/prstuss.gif
THESE CHANGE EVERY WEEK; SO IT WOULD BE GOOD IF SOMEONE CAN FIGURE OUT HOW TO PUT THE ACTUAL STATIC IMAGES FROM THIS WEEK'S ED OF "TWIP" INTO THIS THREAD SO WE HAVE THEM PERMANENTLY. (I can't seem to be able to do it. Help?)
The implication of these supply graphs is that diesel prices rate to go down in the near term while gasoline and propane prices rate to go up. I suspect any price relief in diesel will more than reverse itself once heating season increases distillate demand.
Hold onto your hats folks, the ride is about to get bumpy(ier).
Crude oil futures went up by 5 - 6.5% today, depending on the specific type, to close at an average of ~ $121 US pb.
Thanks to the Georgia vs Russia mess. Even though nothing substantive has happened to disrupt supplies (yet).
Looks like the range just went from $106 - $118 to $112 - $124 or thereabouts.
Given that just the threat of a supply disruption is having this effect, if there is an =actual= supply disruption, expect crude prices to rocket up like they did previously this year.
If that happens, The Fed may have to raise the FFR just to try and tempt people away from crude futures.
That calm breather I was expecting before heating season may now be a forlorn what-could-have-been.
Voltaire: Hold onto your hats folks, the ride is about to get bumpy(ier).
Well if the NWS and Farmers Almanac are correct we are in for one hell of a winter.
Dereck
from http://www.bloomberg.com/apps/news?pid=20602099&sid=argjhnAOh5z0&refer=energy
China Pays Nigeria, Algeria, Egypt Record Prices for July LNG By Wang Ying and Xiao Yu
Aug. 22 (Bloomberg) -- China paid record prices for three liquefied natural gas spot cargoes last month as demand for the fuel increased in the world's fastest-growing major economy.
The second-largest energy consuming nation paid Nigeria $15.46 per million British thermal units, Egypt $15.37 and Algeria $15.39 for each individual LNG cargo, Bloomberg calculations based on customs figures released in Beijing today show. That exceeds the $14.35 per million Btu China paid Nigeria for LNG in June.
Guangdong Dapeng LNG Corp., which operates one of China's two liquefied natural gas terminals, is buying spot cargoes to supplement deliveries from Australia supplied under a 25-year agreement. The July spot LNG prices China paid are almost five times the $3.15 per million Btu it cost to import Australian LNG.
China paid Nigeria $49.5 million for 61,039 metric tons of LNG for immediate delivery, Egypt $48 million for 59,544 tons, Algeria $52.2 million for 64,679 tons and Australia $30.5 million for 189,430 tons, today's customs figures show.
A spot LNG cargo typically weighs between 55,000 and 60,000 tons. LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 258 degrees Fahrenheit) for transportation by ships to destinations not connected by pipeline.
Only the U.S. uses more energy than China.
A British Thermal Unit is equivalent to the amount of heat generated by a lighted match.
(I HIGHLY DOUBT IT. 1 BTU is the amount of energy required to raise the temperature of 1 lb, or 1 US pint, of H20 1"F at "standard temperature and pressure", eg at ~ sea level and either 32"F or 68"F depending on which standards body you are adhering to. It's going to take a substantially bigger than normal match to do that... -Voltaire)
To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net; Xiao Yu in Beijing at yxiao@bloomberg.net
Last Updated: August 21, 2008 22:00 EDT
dereckbc: Voltaire: Hold onto your hats folks, the ride is about to get bumpy(ier). Well if the NWS and Farmers Almanac are correct we are in for one hell of a winter.
Can you post some specifics and references please? What I could find quickly was not very illuminating.
Voltaire I did not read it on the web, heard on the radio and TV news reports.
dereckbc: Voltaire I did not read it on the web, heard on the radio and TV news reports.
OK. So what did you hear them say? And where (which programs in this case) did you hear it?
Voltaire: paid Nigeria $15.46 per million British thermal units, Egypt $15.37 and Algeria $15.39 for each individual LNG cargo, Bloomberg calculations based on customs figures released in Beijing today show. That exceeds the $14.35 per million Btu China paid Nigeria for LNG in June.
paid Nigeria $15.46 per million British thermal units, Egypt $15.37 and Algeria $15.39 for each individual LNG cargo, Bloomberg calculations based on customs figures released in Beijing today show. That exceeds the $14.35 per million Btu China paid Nigeria for LNG in June.
flectere si nequeo superos, Achaeronta movebo! -Virgil
Voltaire: dereckbc: Voltaire I did not read it on the web, heard on the radio and TV news reports. OK. So what did you hear them say? And where (which programs in this case) did you hear it?
Voltaire I for sure heard it on CBS and ABC radio network news. They both claimed according to the NWS and Farmers Almanac to expect 2 degrees lower than normal temps this winter for an extended period in addition to the 1 degree lower temps already recorded over the last 18 months globally. I heard it repeated on Bloomberg TV netowrk as it relates to oil futures and home heating oil prices for speculators.
I take no stock in long range weather forecast, I am only repeating what I heard. Honestly I have better things to do than search for web references, no offense offered, I just don't care.
Believe it or not, that's more specific than what I could find on the www.almanac.com
I don't put much stock in long term weather predictions usually either, but in the case of _The Farmer's Almanac_ there's a very interesting phenomenon.
PBS (Nova? IIRC) did a statistical analysis of them a couble of years ago. Turns out they are exactly wrong ~85% of the time.
Total random is right or wrong 50% of the time.
Which means, perversely, the FA =can= actually be used a semi-reasonable prediction service. Just bet on the opposite of whatever they predict.
Voltaire: PBS (Nova? IIRC) did a statistical analysis of them a couble of years ago. Turns out they are exactly wrong ~85% of the time.
V PBS and NOVA tend to lean hard left. I don't put much stock in what they report. NOVA puts out pretty good science topics when there is no political implications, but when there is they lean left, way left.
dereckbc: Voltaire: PBS (Nova? IIRC) did a statistical analysis of them a couble of years ago. Turns out they are exactly wrong ~85% of the time. V PBS and NOVA tend to lean hard left. I don't put much stock in what they report. NOVA puts out pretty good science topics when there is no political implications, but when there is they lean left, way left.
The political leanings of various programs on PBS are as varied as the programs. Frontline and The News Hour are usually very careful about facts and evidence. The News Hour usually manages to get advocates of both sides of every issue in interviews. TNH is certainly much better reporting than any of the major networks. Shows like NOW seem to lean Left (I say "seem" because I do not watch it nearly as often as my other "standard set" of PBS programs.). Shows like the Nightly Business Report lean Right. Etc,
It really does vary.
However, since we are talking about a strict "math and science" topic, the statistical correlation analysis of a record of predictive data, I think it is fairly safe to say that Politics is not a factor in a show using such methods to decide how accurate or not _The Farmer's Almanac_ is.