Monday, November 01, 2010

Homeowners continue to get burned over higher heating costs

Do you own a home?

How much do you spend on heating every year?

Are you using natural gas, heating oil, electricity or wood to heat your home?

(Seriously, some people still use wood to heat their homes. Its very rare and more common to rural regions, but it does happen.)

I found this old newspaper article from the Globe and Mail from October 5th 2005.

Homeowners should expect to get burned over heating

In it they predict that heating prices will continue to soar.

Well, its now November 1st 2010. Five years and almost a month later. So I think its time we asked, how much did the prices go up???

Well, lets start by looking at crude oil prices - which in turn effects the prices of heating oil. Below in the chart you will see inflation adjusted prices on crude oil rose between 2005 (roughly $45) and 2010 (roughly $70) climbed approx. $25 per barrel, or about 56%.

The next chart shows the prices of furnace oil / heating oil for 2000 to 2010. It looks very similar because the prices are largely effected by the prices of crude oil. The biggest price rise was during 2008 (the Great Recession), and it continues to rise. Compared to 1999 prices the cost of furnace oil has doubled in the last 11 years.

This next chart show the price increases for Natural Gas... The chart points out specific spikes in costs due to the California Electricity Crisis, Severe Winter Weather (thanks to climate change), Hurricanes Katrina and Rita (again, climate change), the high oil price spikes in 2008 effecting the cost of natural gas too, and the economic slowdown that followed the bailout of banks and the real estate market collapse in the USA.

All told the prices for natural gas actually have dropped since 2005. But compared to 2000, prices have doubled in the last 10 years.

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