| Gas Prices Fall, Heating
Costs Remain High
By Elizabeth Coe
Capital News Service
Tuesday, Nov. 1, 2005
ANNAPOLIS - Maryland's
average price for a gallon of gas has dropped below pre-Katrina levels, but
the cost of heating homes this winter is still a concern because oil and
natural gas prices have not declined as quickly, industry officials told
lawmakers Tuesday.
"I don't know how or
when the prices will come down and level out," said Rayola Dougher,
spokeswoman for the American Petroleum Institute. "Perhaps when production
comes back, we could see prices go down then, but a lot will depend on
winter weather."
About 19 percent of the
United States' oil production ability remains shut down as a result of
hurricanes Katrina and Rita, she said, and 11 percent of natural gas
production and 17 percent of U.S. refining capacity is closed.
Gas prices in Maryland
have dropped about 80 cents from a high of $3.27 on Sept. 6, to $2.44 on
Nov. 1, according to AAA Mid-Atlantic.
Imports supplementing
U.S. supplies are largely responsible for the drop in gasoline prices, said
Dougher.
But the United States is
not able to import large supplies of natural gas, which is commonly used for
home heating.
The supply is tight, and
the cost of fuel has remained high since the hurricanes disrupted production
in the Gulf region, Dougher said.
As a result, the U.S.
Department of Energy has predicted that home heating costs in Maryland will
be about one-third higher than last winter, she said.
Mary Lou Kueffer,
director of the state's Energy Assistance Program, said the high fuel prices
mean the need for assistance with heating bills this winter will be much
higher.
Last winter, about
96,000 residents applied for assistance with home heating bills from
Maryland's Energy Assistance Program. This year, she expects that number to
top 100,000.
"We expect to have a
significant number of applicants coming in this year who had enough money to
pay their bills last year," she said. "But it's hard to project the numbers,
since we don't know what prices will be six months from now."
Applications already
are up 10 percent compared with last year, Kueffer said.
About 50 percent of the
state's homes use natural gas for home heating, contributing to the
increases, Dougher said.
Meanwhile, a gallon of
heating oil in Maryland is no bargain at $2.62, up 56 cents from a year ago,
according to the Energy Information Administration.
For heating oil prices
to decline, the United States will need a surge in production, Dougher said.
"The supplies are still
not back to where they have been," she said. "Supplies are tight, and it is
hard to find imports."
Kueffer said she is
expects her budget to remain about the same as last year at $34 million, and
she has not yet heard of any additional funding from the federal government
or the state. "Congress is debating on what the federal funds will be this
year," she said.
To handle the increased
enrollment, Kueffer said the Energy Assistance Program will need to shift
people into different categories so that those who require the most
immediate assistance will be given priority.
Sen. Thomas M.
Middleton, D-Charles, said he is concerned about the program because he has
already received calls from constituents worried they may not be able to
afford their bills this year.
Sen. J. Robert Hooper,
R-Harford, said he thinks the Energy Assistance Program will need more money
and should request assistance now from the state.
"If we wait," he said,
"we can't get the wheels of government moving fast enough to do people any
good."
Banner graphic by
April Chan, incorporating photo from the National Oceanic and Atmospheric
Administration; Newsline Web content edited by Chris Harvey; Capital News
Service stories edited by Adrianne Flynn and Tony Barbieri.
Copyright ©
2005 University of Maryland Philip Merrill College of
Journalism
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