Winter 2021/22 energy outlook – expect increased prices

Pops - October 13, 2021

News

Just received the EIA, Short-Term Energy OutlookOctober 13, 2021 Release 

We forecast that average U.S. household expenditures for all major home heating fuels will increase significantly this winter primarily because of higher expected fuel costs as well as more consumption of energy due to a colder winter. Average increases vary by fuel, region, and weather assumptions. Compared with last winter, we forecast propane expenditures will rise by 54%, heating oil by 43%, natural gas by 30%, and electricity by 6%. We expect space heating demand to generally be higher this winter based on forecasts from the National Oceanic and Atmospheric Administration (NOAA) that U.S. average heating degree days will be 3% higher than last winter. Altering our assumptions for a 10% colder-than-expected winter significantly increases forecast expenditures, while a 10% warmer-than-expected winter still results in increased expenditures, because of price increases.

https://www.eia.gov/outlooks/steo/

If the budget is tight, add a little padding for heat this winter. Maybe think about sealing up the windows (tape up some plastic sheeting), maybe add a lining to the curtains—walmart has small pieces of precut fabric or maybe you can find some cheap sheets. If you are ambitious check/repair/add weatherstripping to exterior doors. Change the filter in the furnace.

For the worse case, lay in some Goodwill coats and blankets, space blankets are awesome (but don’t tuck them in because they trap moisture) and know where the pup-tent is, you can always camp out in the living room.

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I’ve noticed a similar news story (in one of the latest news roundups from this site actually) that was saying that natural gas prices went up 80% I think. This is scary and I’m mostly worried about my elderly parents. Fortunately they have a wood stove as a backup and they are still fit enough to not be helpless but I got them extra wood pellets which they received gratefully.

Great suggestions btw Pops, living room camping is a great idea for the able-bodied.

 

Energy prices are rocketing across Europe and demand is apparently outstripping supply, which means Europe has to grovel to Russia for oil and gas.  We are told that demand for oil and gas in asia is massive and they are happy to pay higher prices.

 

Thank you for sharing 

 

I’m already seeing more people talk about propane heaters on various websites. As things get colder, people are starting to buy up supplies. Appreciate the head up, we will adjust our budget accordingly to account for higher fuel costs.

 

In the UK the main suppliers of bottled propane / butane is Calor, and their system works mainly on the system of one in , one out.  IE you have to take an empty bottle in for Calor to reuse, then they will sell you a refilled bottle.

Trouble is no one is taking the bottles back, they are stockpiling gas bottles, this has the knock on effect of creating a bottle shortage which in turn creates shortages.

Also all this global supply chain system problems has a knock on effect for power generation, Not just the fuel supply but all the parts needed to run and maintain our power systems are in short supply, from gas pipes to steel for power towers, to turbine parts, generator spares, computer systems etc.

 

Dunno if this link works but it appears that Putins russia is playing mind games with Europe over gas supplies.

https://www.msn.com/en-gb/money/other/russia-holds-back-gas-supply-to-europe-amid-pressure-to-approve-nord-stream/ar-AAPFyLY?ocid=winp1taskbar

 

Just a quick update, in the US storage of all fossil energy sources is below average: crude, diesel, unleaded, propane and nat gas. Production hasn’t returned to pre-pandemic levels and over the last 6-8 years exports of US fossils have been not only allowed but encouraged so what production has returned is increasingly exported.

Don’t know if this will mean physical shortages if you have the money to pay but I am buying another gas can, extra propane bottle, etc to keep on hand just in case. Be careful how you store that stuff.

Again, the thing that is new is the US is now exporting fossils and there is a global shortage as economies restart and suppliers struggle. The amount in storage is low and that is the universal sign to raise prices. 

Here is the weekly EIA report https://www.eia.gov/petroleum/weekly/index.php

Click the icons to the right of “This Week in Petroleum” to view specific fuels. Look toward the bottom of each page for “stocks” or storage.

 

I take it that a barrel of gasoline is like a 55 gallon drum?? That is a lot of gasoline. Now looking at that chart it says the US has like 220 million barrels of gasoline in reserve. A million is a huge number, now think of 220 of those million!!

That’s a very small amount compared to what we use and need, but I am just trying to wrap my mind around the sheer volume, storage, and logistics behind 220 million barrels!! 

That is a rational plan to buy an extra gas can and propane bottle when you see supply starting to dip or prices rise. 

 

Yes Sir, it is huge. A barrel of oil is equivalent to 42 US gallons. Prior to the pandemic, 2018, we were using over 100 million barrels… per day… of various oilish liquids globally., not to mention various gases, methane and propane, and solids like coal and tar. Oh and every plastic.

Petroleum is the master commodity, arguably how we have gotten to 8 billion population. Think about it, without it nothing gets grown, mined, timbered or manufactured, let alone cooked, packaged, or distributed. There are lots of opinions but at this point there is no substitute.

I shouldn’t get started LOL

 

 Good evening Sir Henry,

Yes, working with petroleum and the distillates is BIG – yet the oil embargoes has it worked out for governmental and critical infrastructure to continue.

Much of the storage and logistics is “front-end loaded”. This means that, for example, if funding obtained and the Louisiana Offshore Oil Port is built, it is easy enough to add a little to later construction for 2 to 3 additional oil tankers to discharge oil to storage and the refineries.

We’ve now got the strategic petroleum reserve and it recently expanded … although publicized as otherwise. Augmenting the SPR are the still available Naval Petroleum Reserves. Pres Clinton sold Elk Hills Naval Petroleum Reserve, California  to Oxy Petroleum.  These sales typically have secret contract clauses to provide oil to USG when sought. Before Watergate scandal, America’s major scandal was “Teapot Dome”.  Teapot Dome is a Naval Petroleum Reserve.

I used to work emergency resupply of petroleum and the distillates when a reserve Federal Emergency Manager with Office of Emergency Transportation, USDOT. Oil is now arranged for availability. One thing Kissinger did that was an award-winner was the arrangement for an oil futures market in New York City.  Not publicized but the US Government effectively controlled OPEC.

For an anticipated Hades event, NOW is the time to prepare fuel supplies.