Saving Money On Fuel This Winter

(CBS)  Home heating is at record highs, with natural gas and electric going through the roof. But as CBS News correspondent Mika Brzezinski reports, some people will actually be saving money on heat this winter.

They are heating their home with bio-fuels. And the savings are huge.

"We're probably saving this year about $1,500," says homeowner Colleen Forrest.

They may save even more next year, thanks to a $2,100 wood pellet stove. There is a big difference between the two.

The pellets are a renewable fuel source that could save you one-third to one-half what you would otherwise spend on oil or natural gas.

Plus, unlike the old woodstoves, you don't have to feed the fire with wood pellets every few hours. A bag of pellets will heat a small home all day.

And the demand is high.

Steve Walker, a New England pellet salesman, says his plants are already churning out 200 tons of pellets a day, 7 days a week. "All of our dealers are knocking on the door to get more and more," Walker says.

He is turning sawdust into gold dust.

The raw material used to make wood pellets is essentially junk from local wood companies and saw mills. It used to go straight to landfills.

It's the kind of stuff people used to pay to get rid of… until now.

"We used to get it for nothing, but that has changed quite a bit lately," Walker says.

As the saying goes, one man's trash is another man's treasure.

And heating oil distributor Mike Devine have found his own bio-fuel treasure in amber fields of … soybeans. His processed soybean oil, blended with regular heating oil can go straight into a regular furnace.

"We have a product that's burning better for the environment," Devine says. "Secondly, this is a product that's being produced domestically; it's being grown in the American heartland."

Devine expects sales to be up 500 percent over last year.

Robin and Randy Bonnist are true believers.

"I just love the idea that in the end we'll be saving money and we'll be saving fuel," Robin says.

Colleen Forrest is just happy the coldest room of her house is now cozy – heated by pellets, and burning less oil.