Northeast To Be Home Heating Oil Hell?

Soaring Prices Put Enormous Pressure On Consumers And The Companies That Deliver Oil

(CBS)  Despite recent drop in crude oil, the cost of home heating oil averages $3.13 a gallon. The steep price tag is putting unprecedented pressure on consumers and the companies that deliver oil in the Northeast, CBS News chief investigative correspondent Armen Keteyian reports.

For 85-year-old Constance Copes, the cold hard truth of heating oil prices has suddenly hit home. She'll pay 60 percent more per gallon than last year.

"I'm not looking forward to the winter too much," she says. "$4.59, that's not easy."

Oil dealer Jim Meehan is also feeling pain at the pump. Last week, he paid about $12,000 to fill his tanker; and come winter he'll do it three times a day.

"Everybody's concerned about the price of oil and ways to afford it. It's just mind-boggling, because last year our typical price was $2.50 a gallon, and now it's almost doubled," Meehan says.

That's grim news in New England, where eight million families (50 percent of the households) heat their homes with oil, which is now averaging $4 a gallon at retail.

And it's not just oil. Natural gas is up more than 25 percent from last year and electricty rates have nearly doubled.

"It's really scary. This is really going to devastate the middle class in ways we're just understanding," says Mark Wolfe, executive director of the National Energy Assistance Directors' Association.

Eugene Guilford represents 400 of Connecticut's mostly "mom and pop" oil dealers. Many, he says, are now caught for the first time in a credit squeeze -- stuck between soaring oil prices and banks leary of loaning the millions of dollars needed to buy oil wholesale.

How many of your dealers could you potentially lose, Keteyian asks.

"I could easily see that 25 or 30 heating oil retailers would not be able to make it through the next heating season, without any question" says Guilford.

In fact, in the last year, at least 15 oil dealers in six states have gone belly up, leaving tens of thousands of customers high and dry.

In March, F and S Oil, a Connecticut company, shut down virtually overnight after collecting more than $3 million from families who pre-paid for their oil.

That total included $5,000 from Constance Copes, a loyal F and S customer for 20 years.

Connecticut Attorney General Richard Blumenthal has received more than 3, 000 complaints against oil dealers. He's investigating three, and is suing F&S for failing to live up to its promise.

"There's a sense of real confusion, as well as anxiety and apprehension about whether people are going to be able to heat their homes and who to trust to give them advice, let alone deliver the product," Blumenthal says.

Meaning that in the heat of summer, Constance Copes and thousands like her have had to pay twice for oil long before a winter of discontent arrives.

[cbsblogger]

While Americans will sacrifice, the Bushies and the Chenies and big oil will only get richer.

Every energy and utility company in the USA should be forced to sacrifice for the benefit of the USA.

This energy crisis should be shared by all including the overpaid CEOs of big oil and their shareholders.

I totally support the need for a excess profits tax on energy companies to ensure that they are also sacrificing for the USA.

[ramos937]

I quote an early internet report. At the beginning of Bush''s first term, VP Cheney held a series of meetings with high level oil executives. These meetings, although held on government time and using government resources, were barred to the public. At these meetings, it was agreed that the administration would not aggressively seek to develop alternative fuel sources. Ever since then, despite numerous FOIA actions and court decisions, the government has never allowed transcripts of these meetings to be made public. The shortage of heating resources is one of the major consequences of these meetings.

[choptopford]

I don,t know where you found 3.13per gal but Maine is still 3.50 or more

[u-r-right]

I hope it''s an unusually mild winter and then big oil can drown in the heating oil.

[Syndicate]

Elections are in November. Democrats stalling on energy. Perfect storm?

One question. If the Cheney transcripts are secret how do you know what they say? For all you Know they manipulated the markets and kept heating oil from being $20 a gallon.

[tedsgmc]

Yes! I am from Connecticut "origanally" and I feel bad for you folks "up there" and I now live in Texas since 2004 and here in Texas summer time down here is like winter "up there". My electric bill last year was approxamatly $150 to $175 a month(summer time 2007) and now this year 2008 my electric bill as of August 1, of this year is now about $225 to $275 a month as air conditioning down here runs from about mid May till about early October.
You also have to realize that we go through economic "***" about every 10 years or so and it is not much different then that in 1991.Trust me life here in the "good ol''e Lone Star" state isn''t that much better.I still wish I was back in CT as I am a true "Nutmegger" than someone from Texas.
P.S I am from the Torrington area of CT for those of you who are wondering.I miss it "up there" and someday I will be back.

[cattlekate]

Posted by ramos937 at 07:39 PM : Aug 11, 2008

Exactly. When President Obama gets into office, maybe we will know what went on during those secret meeting.

[tedsgmc]

Part 2 From TedsGMC:
Also, no wonder why some of these oil companies went out of business, well when folks had "purchased" oil a set price and quantity, You kind''a "threw the dice" on it as that EVERYONE and I mean EVERYONE WAS NOT "predicting" that oil was going to be so high within a lets say 6 months or a year ago.
God bless you Connecticut for trying to "keep-up" on the affordability of heating oil this year and and stay warm I know it''s going to be "hard" this year,but the feeling is the same for me down here in TX with the air conditioning season,I can not wait for October to come.The heat down here is on a "average" of about 95 to as high as 110 degrees.The summer of ''05 was the "hottest" though as it got as high as 115 degrees in San Antonio.I do miss a good ol''e fashioned New England (Connecticut) fall and winter season.It is "refreshing"!

[cdfoxtrot2]

Elections are in November. Democrats stalling on energy. Perfect storm?

One question. If the Cheney transcripts are secret how do you know what they say? For all you Know they manipulated the markets and kept heating oil from being $20 a gallon.

Posted by cbscrash07

Yes, that makes sense. Oil people keeping the price of oil down. Did you vote for Bush? Your I.Q. seems to fit.

[Marie Zarankevich]

A lot of very poor people are going to Bite It this winter. -- Many of them will be elderly, and many will be disabled. -- A lot will be little kids. -- This will be a winter to remember.

[ausus-2009]

Many of the critics seem to miss the point. The consumers who are struggling with oil prices cannot afford to switch to any other heating source without a huge government subsidy.

Nationalizing the oil industry would only be a short-term fix, as oil is a limited resource, and would set a dangerous precedent. This means that any industry that is perceived to be making excessive profits would be subject to nationalization. What next - collective farms, government-owned department stores, government-only radio and TV stations?

[wogerwabbit]

This is just more of the fleecing of the American people. We''ll all be turned into coolies if this keeps up. Thanks, George!

[emelder]

During the Nixon presidency, price controls had to be initiated. The same rationale may have to apply in this case. I believe our best shot at fairness and accessibility for all Americans will come by electing Barack Obama to be our next President. John McCain won''t have a clue.

[ausus-2009]

At which level are you going to impose price controls? If you read the article, you would see that retailers are already going broke. If it is on the oil companies, they will find it more profitable to sell oil overseas.

As well, before you think any of these measures will bring oil prices down, look at the price in Europe or in fact in any country where oil is not government-subsidized, and you will find the price is higher.

[real1413]

Bu$h is a sociopath. he doesn''t give a rat''s a $ $ about the middle class.
He *could* open up that stratigic reserve (like his father did at the onset of the first Gulf war) (oil prices declined,and then stabilized instead of going from $15 to the projected $40 a barrel)
He''d rather play politics,and increase the value of the family holdings. It''s really incredible that anyone could be stupid,and brainwashed enough to vote for the dry drunk twice......

[my2centss]

Now is the time to drill and build more power plants, or maybe that was 20+ years ago.

[ausus-2009]

Real1413,

Your rants show that you don''t understand that oil is a world-wide problem. India and China combined are greater consumers of oil than the US. The EU is another huge consumer. As I said before the price of oil in the US is the lowest in the unsubsidized world.

[cbsblogger]

Bush and Cheney and Ken Lay mapped out the pillaging of America in 2001 by big oil and to this day they have kept it a secret.

[rave_on3]

...As I said before the price of oil in the US is the lowest in the unsubsidized world.

Posted by ausus at 10:05 PM : Aug 11, 2008

You are correct! Unfortunately, since the surge in price, the cost of our fuel has gone up faster than the rest of the world because our dollar is anemic.

[vnveteran72]

Elections are in November. Democrats stalling on energy. Perfect storm?

One question. If the Cheney transcripts are secret how do you know what they say? For all you Know they manipulated the markets and kept heating oil from being $20 a gallon.

Posted by cbscrash07

Yes, that makes sense. Oil people keeping the price of oil down. Did you vote for Bush? Your I.Q. seems to fit.




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Posted by cdfoxtrot2 at 09:02 PM : Aug 11, 2008
+ report abuse

LMMFAO.....Stupid is as Stupid does......
Neocon Cheerleaders and Apologists = Rock Stupid

[vnveteran72]

...As I said before the price of oil in the US is the lowest in the unsubsidized world.

Posted by ausus at 10:05 PM : Aug 11, 2008

You are correct! Unfortunately, since the surge in price, the cost of our fuel has gone up faster than the rest of the world because our dollar is anemic.


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Posted by rave_on3 at 10:14 PM : Aug 11, 2008
+ report abuse

Americans incomes have been stagnant for years, even falling more recently, so add increased costs of everything they need to survive, and you have a Ruling Elite Wet Dream of an entire population of desperate slave workers.
It''s good to be a Stinking Rich War Profiteer in the days of Little King George.

[ausus-2009]

vnveteran72,

I take it you have not been to Europe recently. It is a continent of regulations, high taxes and subsidies. Germany has the oldest students, youngest retirees, shortest working hours and most holidays in the world. It is a situation that cannot last. It''s no wonder the price of oil there is twice what it is in the US.

[squidly8]

Natural gas is certainly a good alternative but it isn''t always available to everyone. In fact, the gas line stops at the house right next door me. There are only a couple more houses down past me and the gas company won''t extend the line because they won''t make their money back.

I burn oil for heat and hot water as it has always been a relatively cheap alternative. Propane is very expensive here let alone have the unsightly pig in your yard. CT is in the top 5 for electricity prices so that isn''t a cheap alternative. When I bought my house in 2000, fuel oil was about 90 cents/gal. I burn about 1000 gals/year keeping the heat at 60 at night and most of the day. It is up to 68 in the mornings while we are getting ready for the day and then at 68 again in the evenings. Going from $900/year to $4500 is absolutely punishing.

I just installed a pellet stove - this will be my first heating season with it. It will probably reduce my overall heating costs by about half.

[rave_on3]

It''''s no wonder the price of oil there is twice what it is in the US.

Posted by ausus at 10:26 PM : Aug 11, 2008

...not to mention their income tax rate for even lower middle class is a somewhere around 35%. That''s a flat rate...no deductions. Compound that with a value added tax (national sales tax) of, I believe, 18% and rumors were for it to hit 20%. It may be there already. Imagine somewhere in the neighbourhood of half your income going to taxes.

[macusweil]

Thanks Bush / Cheney. One day we''ll learn if any laws were broken in Cheney''s closed door session with BIG oil when they laid out the Republican energy "policy" that put our nation into this crisis.

McSame you aren''t getting my vote in 2008. I may be broke paying for fuel oil but not to broke to vote.

[blackyowe]

We are so screwed in America. I went back to burning wood. I could never aford oil to heat anymore. I heated with wood for 13 years then oil for 9. I went back to wood a few years ago. How on earth can I justify paying so much to to keep my house warm. I am also very lucky to have a smaller home. I am thinking about doing more insulation soon too.

[haoli25]

A lot of very poor people are going to Bite It this winter. -- Many of them will be elderly, and many will be disabled. -- A lot will be little kids. -- This will be a winter to remember. Posted by marizara


The thinning of the herd, nothing more.

[excelsior9]

I understand the hard time the NE faces, but do not understand why Maine has decided to accept oil from the US hate mongoring Argentina.

[deacon20081]

Perhaps now is the time to Force Exxon to Stop selling Oil from Alaska to other countries. That 5 million barrels a day needs to be diverted back to the country that owns it.

[barbaram99]

ye ever lived in Maine...I have and I was born and raised in Maine, I have family there. I am a Mainer in Seattle. My parents don''t have computer and I will be on the net as we talk. We used to shut down rooms in the winter to save heating fuel and that was in the 60s.

[deacon20081]

I understand the hard time the NE faces, but do not understand why Maine has decided to accept oil from the US hate mongoring Argentina.
Posted by excelsior9
---------------------------------------------
If Nicaragua or Brazil or any other country is willing to help people heat their homes when our own government won''t....You better believe we need to be thankful for the help.

[randynason]

I was born and raised in Maine. My mom and dad still live there and this year, a cord of wood is costing $200.00. That is more than three times a much as two years ago. I would encourage my folks to buy heating oil from bin Laden himself, if it would help. Our own country is not addressing the problem effectively and Bush has run the country into the ground.

[macusweil]

"I understand the hard time the NE faces, but do not understand why Maine has decided to accept oil from the US hate mongoring Argentina.
Posted by excelsior9"

Guess you must be either you are yellow or think you clever living in a red state, either way you''ve never had a frozen pipe burst in Jan have you? or had to choose between food or heat??

excelsior means "still higher" ~that refers to the weed you smoke before you posted? Because you sure aren''t from NY and you are a very poor example of an American patriot.

[lemonskink]

Bush/Cheney Regime lead me to three simple words:

Moan for Man.

www.ronnierayjenkins.com

[ausus-2009]

deacon20081,

I think you will find that a major exporter of Alaskan oil is BP - the UK government owned British Petroleum. Taking action against them could lead to a trade war in which there would be no winners. It would probably push the price of oil much higher.

[andylance1]

Don''t drill, Nancy and Barack, let them freeze. It will be nice and frosty in early November in Indiana, Ohio Pennsylvania and Virginia. When they fill up their fuel oil tanks for over $1000 a pop, they will realize how wise Nancy and Barack are, and in 10 or 20 years they will be kept warm with solar and wind energy. Let them freeze, please. Thank you very much.

[tedsgmc]

Yes! I was wondering is Govenor Jodi Rell "planning" on some sort of "relief" for Connecticut residents this year for "heating expeses"? One suggestion would be to ALLOW Connecticut residents to deduct a certain percentage of the cost of there heating expenses off of there state income tax. The same idea could work in other northeast states as well.
To Connecticut residents suggest this to your senators,mayors,first selectmen this idea, or get "in touch" with Govenor Jodi Rell on this issue.

[lochlan-2009]

It''s crazy to see what one administration can do to a country as great as the United States, long considered the greatest country in the world.

And, it seems, they don''t even have the burden of shame for what they have done.

It''s sickening and sad.

[tedsgmc]

Part 2 (again)
As far as Maine is concerned they can freeze there @$$e$ off as far as I concered. I had lived in Maine for 3 years and it was a huge "waste" of time.People there(Mainers) are basically "inbreeds" of Canada.So I hope "Mainers" have a really "nice" and "hard" winter and they will eventally learn that oil from here supports the AMERICAN economy and not from Canada or some other "leftest" "communist" country!

[cbsfan73]

Has anyone considered installing electric baseboard heaters? That''s what I did...

[ausus-2009]

andylance1,

Maybe you need a geography lesson. Maine is so far north there is little sun so when solar energy is needed most there is very little available. Solar energy generated in California would have huge line loss by the time it got to Maine. Wind power has some limited value, but it, too, would have to be converted to electric heating which will prove expensive. How do you generate electricity on a calm, foggy day?

AS to your insensitive let them freeze remark, dead people don''t vote.

[cbsfan73]

One may consider replacing an old oil furnace. The new ones have heat exchangers that are twice as efficient as furnaces made fifteen years ago.
Thermo-Pride makes a good one.

Also, it makes economic sense to add more insulation to older houses now.

[cbsfan73]

RandyNason Wrote:
"I was born and raised in Maine. My mom and dad still live there and this year, a cord of wood is costing $200.00. That is more than three times a much as two years ago."

Yeah, I really feel sorry for my folks back in Crabapple Cove.

[jimfinster]

Many people may need to reconsider the place they live. There are much warmer climates than the NE, where other heating sources are available...

[cbsfan73]

jimfinster suggested:
"Many people may need to reconsider the place they live. There are much warmer climates than the NE, where other heating sources are available..."

Jim,
Never encourage a Yankee to move south...

[rudy654-2009]

And as we descend into this bottomless abyss created by this administration, the perps still have nothing to say. The Enron effect is on.

[ubrew12]

Dig a trench 6 ft deep in your lawn. Put a pipe in there. Circulate anti-freeze in the pipe with one end of the pipe in your house. Problem solved.

Next.

[ausus-2009]

Radiant or convective electric heating is inefficient, even in baseboards. One kW produces 3000 BTU, about the same as generated by the body heat of one person. I have an electric heat pump which produces twice the heat output per kW, but it is useless if the temperature drops much below 40 deg. That means it wouldn''t be much help in Maine.

Probably the only practical suggestions are more insulation, double glazing and shutting off rooms not in use.

[marcpcbs]

This is a case of America robbing America. It''s been said that if America could financially profit from it''s own annihilation, it would blow itself up, and that%u2019s exactly what it''s doing.

Out in California the police have stopped arresting drug dealers so their making billions of dollars and the "legal" business people have tripled their prices just to keep up with the drug dealers.

This is what happens when a country has no system in the schools or the homes to introduce it''s kids to morals, ethics and principles, just gangs, violence, greed and drugs.

[hadenufff]

Hey marcpcbs, since when is it the schools'' job to introduce kids to morals????? It''s the frikking parents'' job to do that. The schools'' job is to educate, not instill morals. Looking at the gov., what kind of morals do you think they''d teach the kids anyways???