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Rising natural gas prices prelude expensive winter
By SARA DRYDEN
Indiana Correspondent

WEST LAFAYETTE, Ind. — As temperatures begin to drop, natural gas prices are starting to rise. This will likely lead to higher energy costs this winter.

According to Purdue University agricultural economist Otto Doering, natural gas prices have increased dramatically in the past months due to decreased production caused by hurricanes Katrina and Rita. While oil production is expected to be largely back on track by the end of the month, it is unclear when natural gas production will return to normal. As a result, the federal Energy Information Administration now predicts that natural gas prices will increase 77 percent or more this winter in the Midwest. The only additional supply available is liquefied natural gas imported from the Middle East.

“However, there are a limited number tankers to transport it and fewer port facilities to receive it,” said Doering.

Sen. Evan Bayh (D-Ind.) introduced legislation as part of a comprehensive hurricane supplemental bill that would give additional funding to the Low Income Home Energy Assistance Program. This federal program helps families heat their homes. Bayh thinks the extra funding is needed to help offset the higher energy costs this winter.

“Heating increases of this magnitude will place a heavy burden on families,” Bayh said.

Doering suggests that some simple conservation measures will help cut down on natural gas use and keep prices from skyrocketing.

“Conserving 10 percent would make a big difference right now,” said Doering. “We are at a tipping point where a small surplus that is expected to continue for a while could eventually greatly reduce prices.”

Vectren Energy Delivery headquartered in Evansville, Ind., suggests using a budget payment program to help manage winter heating costs. A budget program spreads the cost of winter heating throughout the year and eliminates monthly price fluctuations. In the early summer, a new budget amount is set based on the amount of gas used. Any credit or debit balance is rolled forward.

“Although we can’t predict the weather or control the price of natural gas, a cold winter combined with high natural gas costs could easily lead to higher than normal winter heating bills,” said Doug Karl, Vectren’s vice president of marketing and customer service.

More than 60 percent of Indiana households use natural gas to heat their homes. Here are some ways suggested by the Department of Energy to help conserve energy and keep prices down:

•Use a programmable thermostat.

•Conduct a home energy audit to see where you can conserve.

•Install energy efficient lighting such as compact fluorescent lamps (CFLs).

•Turn down your thermostat to 68 degrees. For every degree you lower your heat in the 60-degree to 70-degree range, you'll save up to 5 percent on heating costs.

•Replace or clean furnace filters once a month.

•Reduce hot water temperature. Set your water heater to the “normal” setting or 120-degress, unless the owner’s manual for your dishwasher requires a higher setting.

•Seal up the leaks. Caulk leaks around windows and doors.

•Let the sunsine in. Open drapes and let the sun heat your home for free (get them closed again at sundown so they help insulate.)

•Rearrange your rooms. Move your furniture around so you are sitting near interior walls - exterior walls and older windows are likely to be drafty - don't sit in the draft.

•Keep it shut. Traditional fireplaces are an energy loser - it's best not to use them because they pull heated air out of the house and up the chimney.

•Eliminate wasted energy. Turn off lights in unoccupied rooms.

•Shorten showers.

•Use appliances efficiently.

•Put your computer and monitor to sleep mode. Do not leave it in sleep mode overnight; turn it off.

10/12/2005