Heating oil prices could become "life or death" this winter

AUBURN, Maine — Richard Smith tried to prepare for high heating-oil prices: He applied for home-heating assistance, he is ready to seal off three unused rooms, and he has insulated his cellar and electrical outlets.

Despite all that, the 75-year-old expects to dip into his savings to keep warm this winter, even with federal heating assistance.

"People are concerned," said Smith, who lives alone with his cat, Sam, in a seven-room house built in 1820.

With fuel prices surging because of Hurricane Katrina, there are no guarantees that heating oil won't hit an unprecedented $3 a gallon. Last year's average of $1.95 per gallon in Maine was already enough to make customers wince.

And officials worry that federal heating assistance for the poor will fall short of what's necessary to keep people warm.

"Three-dollar-a-gallon gasoline is an inconvenience and a hardship. Three-dollar-a-gallon heating oil is life or death," said Beth Nagusky, director of Maine's Office of Energy Independence and Security.

A bigger proportion of homes in New England use oil for heat than in any other region of the country because of its older housing stock and the late arrival of access to natural gas to many parts of the region, said Jonathan Cogan of the Energy Information Administration in Washington.

Many residents avoided the sting of high oil prices last winter by buying contracts that locked in prices early.

This summer, with prices already high, many people paid around $2 a gallon for contracts for this winter. Then Katrina hit the Gulf Coast, knocking out oil supplies and refineries and sending gasoline prices surging.

Damage to Gulf Coast refineries and pipelines pushed retail gas prices to historic highs in the past two weeks, with self-serve regular averaging more than $3 a gallon for the first time ever, according to a nationwide survey released yesterday.

The weighted average price for all three grades surged more than 38 cents to nearly $3.04 a gallon between Aug. 26 and Sept. 9, said Trilby Lundberg, who publishes the semimonthly Lundberg Survey of 7,000 gas stations around the country.

Self-serve regular averaged $3.01 a gallon nationwide, according to the survey. Midgrade was pegged at about $3.11, while premium-grade was at nearly $3.21.

"That's all thanks to Katrina," Lundberg said.

Heating-oil prices spiked, as well, even though there's a greater supply of heating oil than in the past six or seven years, Nagusky said.

"It was a good thing for the oil companies. They relish this. It is an excuse, an excuse, to up it," said Smith, a widower who used to own a small grocery, Smitty's, in Auburn, Maine. "There's no stopping it, and it's a shame."

Smith paid $1.89 per gallon to top off his 275-gallon tank this summer. Since then, the average price has climbed to about $2.50 a gallon in Maine.

New Hampshire's average price was $2.67, a jump of 23 percent in a month and 65 percent in a year, said Joe Broyles of the state Office of Energy and Planning.

The last resort for people who cannot pay to keep warm is federal heating assistance, but how much aid there will be this winter remains uncertain.

There are not a lot of options. Natural-gas prices are up, too. Firewood prices have shot up to roughly $200 a cord in Maine, about $75 more than last year.

Despite rising prices for firewood, woodcutters can barely stay ahead of the demand as New Englanders resort to a fuel source as old as the colonial forests.

"The stuff I'm cutting today will either be delivered this afternoon or tomorrow," said Tom Chrisenton, who cuts firewood in Lyndeborough, N.H. "We can't keep up with it."

Instead of three or four orders a week, he's getting 12 a day.

Wood-burning stoves are selling out in stores, and would-be woodsmen are filling up classes on lumberjack skills.

Federal government statistics show that, in 2001, nearly 10 percent of New England households got some of their heat from a woodstove — more than three times the national average of 2.8 percent.

"You go down to the Southwest, it's solar [power]," said Jasen Stock, executive director of the New Hampshire Timberland Owners Association. "Here, you know, we got trees."

In Haverill, Mass., Rocco Pelosi, 78, has piled up firewood in his 1.5-acre back yard. That will help some, along with federal assistance. Without it, he's not sure what he and his wife would do.

"I don't want to cry on anybody's shoulder," he said. "I try to make ends meet."

Smith's backup plan also involves firewood. He has an extra bed set up next to his fireplace, and he'll sleep in it if he has to.

"I'll block off the room with the fireplace. I'll close it right off," he said.

Firefighters in the region fear that an increase in wood burning will lead inevitably to an increase in people setting their homes on fire.

In the heyday of the wood-burning 1970s, when oil shortages drove up the price of oil for home furnaces, the fire department in Thomaston, Maine — population 2,900 — responded to 27 such fires in one winter, said Peter Lammert, an official with the Maine Forest Service. When the boom died down, that number became one or two a year. This year, he and other officials believe, the fires will start soon after the first frost.

"People are going to do funny things not to pay that money" for oil, said Raymond Parent, the fire chief in Sanford, Maine.