Oil and Gas

Energy Secretary: Heating Oil Will Meet Winter Demand


The U.S. will have plenty of heating oil supplies this winter to meet demand, but the Bush administration is concerned about the higher prices consumers will have to pay for the fuel, Energy Secretary Sam Bodman said Wednesday.

"I think we're in reasonable shape in terms of supply," Bodman told Reuters in an interview. "There seems to be enough oil ... to get by. It's a matter of increased costs," he said.

Bodman was referring to the Energy Information Administration's new winter forecast, which is projecting that consumers will pay more for all heating fuels.

Heating oil expenditures this winter in the Northeast states, the biggest U.S. heating oil market where a third of the households use the fuel, will be up 22 percent, or $328, to $1,827 for the season, according to the EIA.

While Bodman expects supplies to be plentiful, the EIA warned in its forecast that if U.S. refiners produce more gasoline than expected over the next few months to rebuild below-average inventories, the result could be lower available heating-oil supplies.

Expensive crude oil prices will help raise residential heating oil prices to a nationwide average of $2.88 a gallon this winter compared with $2.48 last year, the EIA said.

"You know that's always a concern when we have these higher prices," Bodman said. "It is a real problem."

He pointed out there is a federal program, the Low Income Home Energy Assistance Program (LIHEAP), that helps poor families pay their heating bills.

However, consumer groups have called on the Bush administration to seek more funding for the program, because there is enough money in the current budget to help only about 15 percent of the families eligible for LIHEAP.

Bodman spoke to Reuters on a visit to T.C. Williams High School in Alexandria, Va., where he toured the new energy-efficient campus.