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Tuesday, November 22, 2011

Winter Fuels Outlook 2011-2012

Robert Pirog
Specialist in Energy Economics

The Energy Information Administration (EIA), in its Short-Term Energy and Winter Fuels Outlook (STEWFO) for the 2011-2012 winter heating season, projects that American consumers should expect to see heating expenditures that on average will be somewhat higher than last winter. Average expenditures for those heating with natural gas are projected to increase by 2.6%, while those heating with electricity are projected to see a decline in expenditures of about 0.6%. These two fuels serve as the heating source for about 88% of all U.S. household heating. Propane and home heating oil consumers are also projected to see increased expenditures.

Within the U.S. average projections, differences exist with respect to region of the country and type of fuel.

Economic conditions of slow growth and relatively high unemployment suggest that lower consumption of all fuels may occur, especially in the context of milder winter weather conditions as forecast by the National Oceanic and Atmospheric Administration (NOAA). While the price of natural gas has been relatively low, the price of oil has been relatively high over the past year. If the price of oil spikes for an extended amount of time, or if the price of natural gas increases, heating costs might be expected to rise above projected levels for many consumers. Lower prices could reduce seasonal heating expenditures.

Uncertainty exists with respect to the status of funding for the Low Income Energy Assistance Program (LIHEAP), the key federal program assisting low-income households with heating expenditures. Funding for the Department of Labor and the Department of Health and Human Services has to be resolved by Congress (S. 1599, H.R. 3070).

It has not been announced whether the CITGO program to assist some U.S. heating oil consumers will be continued.

Date of Report: November 1
4, 2011
Number of Pages:
Order Number: R420
Price: $29.95

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