-Caveat Lector- > U.S. braces for winter energy shortage > > By Scott Bowles > Gannett News > Friday September 22nd, 2000 > > > Faced with a natural gas shortage, soaring > oil prices and unprecedented demands for > electricity, Americans are bracing for the > worst energy crunch in a quarter of a > century. > > It should hit, economists say, about the dead of > winter, when temperatures and > resources drop and the need for heat peaks. > > The federal government is sounding the alarm. > > Energy Secretary Bill Richardson said this week that > oil prices were > "dangerously high." The White House, which has urged > OPEC to increase > production to avoid a global recession, is considering > drawing from the country's > emergency stash of oil. And the nation's governors met > this week in Ohio to > discuss energy concerns. > > The threat is sparking near panic in some regions of > the country. New England is > on a buying binge of wood stoves. Pennsylvania > residents are stockpiling barrels > of heating oil in their homes. Sales of portable > generators are brisk in California, > where residents worry about rate increases and more > rolling power blackouts. > > How did it come to this? Wasn't it just last year when > a gallon of gasoline cost > 90 cents? > > Though officials don't expect this shortage to compare > with the energy crisis of > the mid-1970s, they agree that nearly all Americans are > > going to feel it in the > wallet. > > The cost of natural gas - the country's dominant > heating fuel - will rise > anywhere from 25 percent to 40 percent during the > winter. Crude oil prices are > nearing $40 a barrel, the highest level since they > reached $41 during the Persian > Gulf War. That means no relief at the gas pump, where > gasoline costs an > average $1.60. Heating oil will cost 30 percent more > this winter than it did last > year. > > "We aren't running out of energy, the way we were in > the '70s," says Allison > Wilkes, an economist and consultant for California > utilities. "But it's going to cost > us a good bit more to get it this winter. It's been a > while, but we're going to have > to start thinking about energy conservation again." > > The news isn't all dire. Members of the Organization of > > the Petroleum Exporting > Countries agreed earlier this month to increase oil > production by 800,000 barrels > a day. It takes time to get oil on line and available - > > experts don't expect much > relief for another six to 12 months. But help is on the > > way. > > America, in particular, stands to weather the crunch > fairly well. While dwindling > crude oil reserves threaten to stall the economies of > India, South Korea and > several European nations, many economists say the > bustling U.S. economy > should keep inflation down. > > And the next time you curse the corner gas station for > charging $1.60 a gallon, > consider London and Paris, where motorists wait in line > > 20 minutes to pay $4 a > gallon, often to find the station has run out of fuel. > > Energy shakes markets > > However, the country will hardly escape the crunch > unscathed, says Ann-Louise > Hittle, senior director of world oil at Cambridge > Energy Research Associates in > Massachusetts. The energy drain, she says, is a > reminder of how entrenched the > country is in the global economy, and how volatile > energy prices can shake > markets worldwide. > > "We don't rely on oil as much as we used to," she says. > > "But for the oil we do > use, we rely on imports more than ever. And that can > leave you vulnerable." > > The latest power pinch wasn't a big surprise. It built > momentum for more than a > year, beginning in late 1998, when Americans were > enjoying the lowest gasoline > prices, adjusted for inflation, since the Depression. > > The low prices came thanks to Asia's economic crisis. > When the region fell into > a deep recession, it drastically cut oil imports and > left supplies flush for the rest > of the world. Crude oil, used for both gasoline and > heating oil, plummeted to $10 > a barrel. Some regions of the USA saw gasoline dip as > low as 60 cents a gallon. > The cost of natural gas dipped to $2 per 1,000 cubic > feet, less than half what it is > today. > > Though the oil glut was welcome news to consumers, > drilling companies > "couldn't handle the price collapse," Hittle says. > > The firms, many of which produce oil and natural gas, > curbed exploration in the > face of dwindling profits. OPEC also agreed to cut > production to 5 million barrels > of oil a day until prices rose again. They did, with > unexpected swiftness. As the > Asian market recovered and the American economy boomed, > > demand for oil > soared. With little new exploration, supply has been > slow to catch up, and > probably won't until next spring. > > Commuters off guard > > It has caught the American commuter off guard. Los > Angeles resident Douglas > Burke shook his head watching the gas pump glide past > $25 as he filled up his > Jeep Cherokee recently. > > "I don't know if I can get used to this," the film > production assistant said when the > pump finally stopped at $28. "I bought this (vehicle) > when gas was less than a > buck a gallon. I figured the price would rise some, but > > not like this. I'm beginning > to wish I got a compact." > > Hittle of Cambridge Energy says most Americans were > oblivious to the perils of > dirt-cheap crude. "There is no free lunch," she says. > "And we're paying the bill > now." > > Consumers might find that electricity bills don't dip > much, either, even though the > peak season typically ends with summer when the use of > air conditioning drops. > Thanks to deregulation, a scorching summer and the > growth of the high-tech > economy, consumers are vulnerable to the vagaries of > the market like never > before. > > In California, shortages have forced utilities to > arrange power-cutoffs to certain > customers, including hundreds of office buildings, > businesses and colleges. > > Increasingly, electrical plants use natural gas to > generate power. A spike in gas > prices might mean double-digit increases in some > customers' bills this winter. > > "If we have a normal winter, we should probably be all > right," says Bill Brier, a > vice president with the Edison Electric Institute, a > Washington-based trade > organization of privately owned utilities. "If it gets > extra cold and there's a high > demand for heating oil, that could change things." > > The Northeast will be particularly vulnerable. More > than 35 percent of homes > there are warmed with heating oil, which has risen from > > about 90 cents a gallon > last year to more than $1.60 currently. > > It has left many residents looking for alternative ways > > to warm up. Wood-burning > stoves are the hot item in New England. "Sales are > booming," says Josh Coutu, > manager of Vermont Casting Factory in Natick, > Massachusetts. "We're already > backed up three weeks on installations, and we have > four crews running. We > thought last year was busy with Y2K, but this year is > busier." > > Pennsylvania homeowners are trying to outfox the > commodities market by > buying up barrels of heating oil amid predictions that > its price is about to go up. > Dave Gourley says he has been working from "morning to > midnight" seven days a > week to make deliveries for Blazczak Home Heat, a > heating-oil company in > suburban Pittsburgh. > > "The panic is on," he says. > > The cash option > > For some, there will be no option other than doling out > > more cash. > > For the American trucker, every nickel-a-gallon fuel > spike means an additional > $1,000 in operating costs every month. That could mean > price hikes down the > road on all goods shipped by truck, from produce to > computers, says New York > transportation stock analyst Josh Bergman. "It's > impossible to say how much of > the cost will get passed on to consumers, but I > wouldn't bet on much relief at the > grocery store this winter," he says. > > Fliers shouldn't be immediately affected by the crunch, > > Bergman says. The > industry's terrible record this summer in on-time > flights has sparked a fare war > that should offset fuel-price increases for the next > six months. > > Commuters will have no such luck. AAA says the increase > > in fuel prices means > that two-car households will spend $410 more this year > to drive than last year - if > prices don't rise any more. > > The White House is under increasing pressure to do > something about the price > hikes, namely tapping the Strategic Petroleum Reserve, > about 570 million barrels > of crude oil stored at four sites in Texas and > Louisiana. The reserve is to be used > only in the case of a national supply emergency. > > It's up to consumers > > Short of federal intervention, however, energy > officials say it's up to individuals to > lessen the blow. > > Former U.S. Rep. Joseph Kennedy, who now runs Citizens > Energy Corp. in > Boston, says that consumers cannot trust the promises > of OPEC and other > energy exporters. Kennedy, who spoke at a Massachusetts > > Statehouse hearing > last week, says his state is in the midst of "a heating > > oil crisis." > > "Anyone who thinks it isn't real hasn't spoken to the > elderly woman I visited > some time back," says Kennedy, whose not-for-profit > group supplies low-income > families with low-cost heating oil. "She has to keep > her gas stove running to stay > warm. The fact is a lot of OPEC countries have never > been great fans of the U.S., > and they take some joy in watching us squirm." > > The nation's governors huddled this week to discuss > plans for their own states to > battle rising energy costs. Alaska Gov. Tony Knowles > said interest has grown in > tapping the natural gas reserves in Alaska's North > Slope. > > In the past, the low price of natural gas was not > enough to justify constructing > pipelines from Alaska to the continental USA. Knowles > said that could change, > despite protests from environmental groups. But some > industry observers say the > answer is simpler. > > "The fact is, costs are going to be higher this year, > regardless of where you live > and what you use for energy," says economist Wilkes. > "We should be looking at > age-old solutions. Weather-strip your windows. Turn > down the thermostat when > you're not at home. It's simple advice, but it's gotten > > us through hard times before." > > -- > **COPYRIGHT NOTICE** In accordance with Title 17 U. S. C. Section 107, > any copyrighted work in this message is distributed under fair use > without profit or payment to those who have expressed a prior interest > in receiving the included information for nonprofit research and > educational > purposes only.[Ref. http://www.law.cornell.edu/uscode/17/107.shtml ] > > <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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