Gas companies in CT make big push into oil territory

earl burnermann

Just heard on WSHU this morning that CT gas companies have come up with a plan to push their gas lines further.



The story stated that a typical oil home that burns $2000 of fuel would only burn about $650 of gas. So the gas companies are going to bring the new lines right up to the house. But instead of charging the new customers up front for the service they are going to put a 10% surcharge on gas used for the next 10 years on these new installs.



The oil companies up in CT are screaming about this.

Jack

First off,

let me start by saying that oil is great heat and a great industry. That said it is simply not competitive against other options, especially natural gas. If the oil industry is able to prevent this type of program the "public" will be more than a bit peeved at the lost opportunity to save money. They loose or loose. I think any oil customer in an urban area, those served by NG, is a major target for the utilities and the customer will thank them for helping them out. We are talking about heating homes and hot water for about a third of the cost of oil. What homeowner wouldn't want that? If you were a state or local representative would you try to stop this? I think only until the next election.

JohnHenry_2

Of Course

The oil companies are screaming. They're going to lose business. But as everything works out in this zero sum game we call life, gas equipment installers will gain from the oil companies loss.



More importantly, everyone else on this planet will gain as well.



1. At least a 25% reduction in CO2 output from those homes. That's if the homeowner just get's a conversion burner for their oil fired boiler. switching from an 80% conventional boiler to a 95%+ condensing boiler will reduce CO2 output another 15-20%



2. Less oil used in home heating will mean lower demand and therefore lower prices per barrel of oil, meaning lower gasoline prices for everyone.



3. Currently, every barrel of oil not used for home heating means a barrel of oil not imported and that money staying in the USA. A lower trade deficit helps everyone.



I could go on.



Anyone that tries to stop a scheme like this is either crooked or insane and would rather other people lose $10 so they can make $1. Shameful.

Jamie Hall

At the risk of sounding slightly sour...

I'd love to switch to natural gas, and I dare say that Charles would help me do it.  However... I live in a rural area.  The nearest gas main is 8 miles -- hilly, rocky miles -- away.  Any bets on how soon the gas company might extend gas service to these rural areas?  Right...  this program, like so many, will help folks in the cities and suburban areas, and I have no gripe with that.  But, again like so many, it won't do a thing for us peasants who live in the country.  But... there aren't that many of us, so we don't count when it comes to counting the voites.



End of rant...

earl burnermann

Don't see prices really dropping

As gas conversions continue to squeeze the home heating companies the producers most likely won't feel the pinch. From what I've heard, there is a large world-wide demand for diesel fuel. So if the oil doesn't end up in a home's oil tank it will end up in some truckers' fuel tank someplace in the world.

JohnHenry_2

Propane?

Propane was down to $0.70 wholesale here at the refineries this last summer. I bet if you got yourself a big tank that you owned (think 3,000 gal bobtail tank that can't be used over the road anymore but is just fine for stationary use) you could find someone to deliver you propane from the closest refinery in the summer months for < $0.25 gal delivery cost. Capital costs not withstanding, around here that would put you in the same price/btu as NG delivered via a pipe. I got a quote for just such a tank last spring. All done up, painted nice and delivered was under $6K.



If I were in your shoes in this area, it would be a no-brainer to go this way.

JohnHenry_2

You are correct

Lower gas prices due to the demand effect won't be large going forward, but imagine what the demand for oil would be if we didn't have plentiful NG...



Europe's fuel usage patterns don't jibe with what you get out of a barrel of crude oil at the refinery so they pretty much have a shortage of #2 fuel oil (diesel) and a glut of gasoline. Good for exports and us gasoline users. I hear gasoline has been under $3 a gallon just south of Seattle due to an actual gas war! That with WTI still over $90/bbl.

bill nye_3

Yeah but...

It is not the gas that makes us mad, I heard that Governor wants to use 7 million dollar$ of tax payer money to "extend the infrastructure". I work in the oil industry, why would I want my tax dollars used to take my job away ?

Condoman

Plan ditched

I live in CT and saw that the plan to help gas companies did not pass because of so many complaints from people that will not benefit from this like myself.



We are in a small town and doubt that water, sewer or gas will make it to my street in my lifetime.



The public utility in Norwich will be expanding the gas lines but they bonded to do that.

icesailor

Consolidation:

And once our dear friends the Wall Street Crime Syndicate and their close family cousins, the Wall Street Banksters, get done sewing up the energy supplies in the US and Canada, and are sending all petroleum products gathered in the USA and will be shipped on to the open world market to be sold to the highest bidder. Good Biddness.

Once they have a complete monopoly in North American Natural Gas, the Multinational energy companies (who we have been pouring billions of US welfare cash into, will be able to set the price to anything they want. The Vulture capitalists will cart our cash away.

It happens slowly so it doesn't hurt as much.

earl burnermann

I feel your pain.

Like you, I was in the oil industry for close to 25 years. Then came the layoffs in 2008 and 2009. I got caught up in the 2009 layoffs. The company I worked for let us know about two days before the cuts that an epa 608 certification would save our jobs. Never heard of this cert before.



Thought learning AC would get me a good job with an oil company again. But it didn't work out that way. I'm out of oil now and I do miss it. But with about 7% of the country heating with oil and over 60% using natural gas I had to make the change to working on gas and ac. Oil is going to be around but it hasn't grown in years and I just see it continuing to shrink.

BobC

Merchantilism

We are going back to era before the government broke up the big corporations in the late 19th and early 20th century. Capitolism works when it is controlled, when it is uncontrolled the gap between the haves and have nots grows until it's unbridgeable. Then those in power tell the peasants to eat cake and we all know how that worked out.



We are in a situation not unlike the industrial revolution when many jobs were destroyed by machines which could do the work of many men. Now most of our manufacturing has been moved offshore and people who once had good jobs paying a living wage are working for 30% of what they once earned IF they can even find those jobs. The credit crunch of 2008 was fueled by people living on credit trying to keep up a lifestyle they could no longer afford. Those controlling things will not be happy till they have everything but they will just bring the whole miserable mess down on their heads and then there will be plenty of misry to go around if that happens.



If supply and demand really worked we would see heating oil declining in price because of much reduced demand but they trump up one excuse after another to keep the price up. In 1970 heating oil was $0.139 per gallon and gasoline was $0.349 or so, Now gas is $3.20 a gallon while heating oil is $3.45 a gallon, gas has road taxes on it while heating oil has oil company greed on it. Congress is subsidizing detroit over people who have to heat their homes with oil because they don't have natural gas available to them and that might have something to do with the oil lobbyists on K street that keep election coffers brimfull..



Bob

Tim McElwain

When the utilites were

un bundled and de regulation kicked it was a free market for gas companies.



When I worked for a utility back in the sixties and the battle for coal customers was in full swing the gas utilities got into the sale of White goods (ranges and dryers) it was a foot in the door to consumers homes. The next step was we sent a lady called the "Lady in White" to teach the lady of the house how to use her new appliances. This was a marketing ploy as her job (the Lady in White) was to discuss with the lady of the house (she being the neck that turns the head) a conversion of heating to gas and water heating. If it was a coal system or an oil system the customer was offered a gas conversion burner installed for free and serviced for the life of the equipment for free, they paid a rental fee of $5.00 a month for this service. We also gave them a brand new water heater which was rented for $2.50 a month. So for $7.50 they could go over to gas. Also back in those days we installed the gas line to the customers house for free. All service on customers equipment was also free. All we charged for was parts and labor to install the part.



Think about all of that somebody was paying for all of that, guess who the customers of the gas company.

bill nye_3

Found this

Found this on the front page of my morning news paper.......



http://www.norwichbulletin.com/article/20131109/NEWS/131109531

bill nye_3

I think

I think the driver really should be on the "curb side " of the truck though.

SWEI

An unfortunate situation

but the simple fact is that liquid fuels sell at a significant premium worldwide thanks to their ease of use in transportation applications.  This is not likely to change in the near term.

radmix

In my area

My local gas utility just sold out to a Canadian company. They are subcontracting the gas piping installations from  the street to the homes to an outside company. Not only does the company do the gas mains in the street but they are also bidding on boiler installations to my customers!  My gas supplier is now my competition!

Steamhead

The other factor

is that oil suppliers don't even try to compete anymore. So we see stuff like this:



http://www.heatinghelp.com/forum-thread/146509/serviced-every-year-We-were-speechless



http://www.heatinghelp.com/forum-thread/146504/Your-magic-wand-isnt-working



All you have to do is show this to the customer and if they ever had any doubts about converting, this will erase them.