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Short-Term Energy Outlook

Release Date: September 9, 2014  |  Next Release Date: October 7, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Projected Winter Fuel Expenditures by Fuel and Region

The average household winter heating fuel expenditures discussed in this STEO provide a broad guide to changes compared with last winter. However, fuel expenditures for individual households are highly dependent on local weather conditions, market size, the size and energy efficiency of individual homes and their heating equipment, and thermostat settings (see Winter Fuels Outlook table). Forecast temperatures are close to last winter nationally, with the Northeast about 3% colder and the West 3% warmer.


Natural Gas

About one-half of U.S. households use natural gas as their primary heating fuel. EIA expects households heating with natural gas to spend an average of $80 (13%) more this winter than last winter. The increase in natural gas expenditures represents a 14% increase in the average U.S. residential price from last winter, with consumption that is slightly lower than last winter nationally. The projected changes in residential natural gas prices this winter range from a 10% increase in the West to a 15% increase in the Northeast. Several factors contribute to this regional variation, including differences in weather patterns, regional changes in production and pipeline capacity, and differences in regulatory constraints in passing price changes through to customers.


Heating Oil

EIA expects households heating primarily with heating oil to spend an average of about $46 (2%) less this winter than last winter, reflecting a 5% decrease in prices and a 3% increase in consumption. Although winter temperatures are expected to be similar to last winter nationally, weather in the Northeast is expected to be 3% colder than last winter. Reliance on heating oil is highest in the Northeast, where about 25% of households depend on heating oil for space heating, compared with 6% of households nationally. The state of New York, which accounts for about one-third of the region's heating oil market, has required the use of ultra-low sulfur heating oil since July 2012. A number of other states will begin to move away from higher-sulfur heating oil in the coming years.



About 5% of all U.S. households heat with propane. EIA expects households heating primarily with propane to spend more this winter, but the projected increase varies across regions. EIA expects that households heating with propane in the Midwest will spend an average of $120 (9%) more this winter than last winter, reflecting prices that are about 10% higher and consumption that is 1% lower than last winter. Households in the Northeast are expected to spend an average of $206 (11%) more this winter with average prices that are about 8% higher and consumption that is 3% higher than last year.



Households heating primarily with electricity can expect to spend an average of $18 (2%) more this winter with 2% higher prices but consumption slightly lower than last winter. About 39% of all U.S. households rely on electricity as their primary heating source, ranging from 14% in the Northeast to 63% in the South.



The use of cord wood and wood pellets as the primary residential space heating fuel has increased by 39% since 2004, to about 2.5 million households in 2012. About 8% of households use wood as a secondary source of heat, making wood second only to electricity as a supplemental heating fuel. About 20% of New England homes (1.1 million) used wood for space heating, water heating, or cooking in 2009 (EIA, Residential Energy Consumption Survey, 2009), which is nearly twice the national rate. Almost half of all rural households in New England used wood compared with only 12% of the area's urban households that used the fuel.

Percent change in fuel bills from last winter (forecast)
  Base case forecast If 10% warmer than forecast If 10% colder than forecast
* Propane expenditures are a volume-weighted average of the Northeast and Midwest regions. All others are U.S. volume-weighted averages. Propane prices do not reflect prices locked in before the winter heating season starts. Propane prices are not available for the warm and cold cases.
Heating Oil -2 -13 9
Natural Gas 13 3 25
Propane* 9 - -
Electricity 2 -1 6

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