Home heating 101: six cold facts on staying warm this winter

Winter weather has arrived. Blizzards in Minneapolis, subfreezing temperatures in Buffalo, N.Y., and cold weather spreading into places like Atlanta. With the rush of arctic-type conditions, how much will it cost this winter to stay warm? Here are six cold facts on staying warm.

Rick Wilking/Reuters/File
A state-of-the-art wind turbine at the US National Renewable Energy Laboratory's (NREL) National Wind Technology Center (NWTC) spins on a sunny day near Boulder, Colorado, on July 21.

1. Will it cost more to stay warm this winter?

Rich Clabaugh/Staff

The average American household expenditure is not, in fact, expected to be much different from last year – $962 for 2010-11 versus $966 for 2009-10 – according to a December forecast by the Energy Information Administration (EIA), part of the Department of Energy. But it really depends on what fuel you use to heat the house.

Almost 90 percent of the nation's households use natural gas or electricity. The outlook for most of those homeowners is good, since prices are either the same as last year or lower.

"In the case of natural gas and electricity, it's a combination of lower demand on the industrial side because of the economy and higher supplies because of the recent increase in gas coming from shale formations," says Paul Flemming, director of power at Energy Security Analysis Inc. (ESAI), in Wakefield, Mass. "The inventory of natural gas is as much as we have ever had."

However, if you heat with oil, get ready for fuel-bill sticker shock. Prices are expected to average $3.18 a gallon, resulting in an increase in the average home heating bill of $269, according to the EIA. Behind the higher prices: those shipments to Europe and higher crude oil prices, above $90 a barrel, the highest since 2008.

"Oil is higher because demand is there, supporting prices," says Andrew Reed, an oil analyst at ESAI. He expects heating oil prices to remain relatively high until the warm weather returns.

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