Thanks both to what has already been an unseasonably warm season and to bargain basement energy prices, Americans are saving a lot of money on their heating bills this winter. The EIA reports:
As discussed in the [EIA’s] October 2015 Winter Fuels Outlook, the winter of 2015–16 was expected to have lower expenditures than the winter of 2014–15. In the time since that outlook was released, the weather has been much warmer than expected, and prices have fallen faster than anticipated, resulting in even lower heating expenditures…At the national level, the 2015–16 winter is now expected to be 15% warmer than last winter. […]
Based on the most recent price and weather forecasts, EIA expects the average household that heats primarily with natural gas will spend about $110 (17%) less on that fuel this winter compared with last year…The average household that primarily heats with heating oil is expected to spend about $760 (41%) less on the fuel this winter compared with last year…[W]inter 2015–16 expenditures for households that primarily heat with propane are expected to be 24% lower than last winter in the Northeast and 31% lower in the Midwest.
The shale boom has a lot to do with these winter savings, as new supplies of fracked gas have helped push spot natural gas prices here in the U.S. well below $3 per mmBtu (read: cheap). But the shale boom has also done its part in pushing down global oil prices by adding to a global glut of crude, and that’s in turn had a knock-on effect in depressing petroleum-based fuels like heating oil.
These savings aren’t negligible, either. Natural gas-heated homes will save on average more than $100 this winter, and households that use heating oil will spend (again, on average) $760 less. These savings will be especially welcome in poorer households, whose heating bills might comprise a bigger slice of their monthly budget. Expensive energy can be seen as a kind of regressive tax, in that it disproportionately burdens the poor. If that’s the case, then it stands to reason that this mild winter’s low heating bills are nothing less than progressive.
Americans might wonder how the recent price plunges in global natural gas and oil markets might affect them here at home, but already we’re seeing two concrete pieces of evidence in cheaper gasoline and smaller heating bills.