1 / 20

NCAF LEVERAGING CONFERENCE ST. PETERSBURG, FLORIDA OCTOBER 25, 2006

TROUBLE AHEAD, TROUBLE BEHIND SOME THOUGHTS ON THE ENERGY OULOOK AND THE LOW-INCOME CONSUMER INTEREST. NCAF LEVERAGING CONFERENCE ST. PETERSBURG, FLORIDA OCTOBER 25, 2006. EIA Winter Outlook For 2006-2007. Heating Oil Prices Flat Heating Oil at $2.46 per gallon

trent
Download Presentation

NCAF LEVERAGING CONFERENCE ST. PETERSBURG, FLORIDA OCTOBER 25, 2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. TROUBLE AHEAD, TROUBLE BEHINDSOME THOUGHTS ON THE ENERGY OULOOKAND THE LOW-INCOME CONSUMER INTEREST NCAF LEVERAGING CONFERENCE ST. PETERSBURG, FLORIDA OCTOBER 25, 2006

  2. EIA Winter Outlook For 2006-2007 • Heating Oil Prices Flat • Heating Oil at $2.46 per gallon • Natural Gas Prices Down 16%, Propane Down 5% • Natural Gas at $12.23 per mcf, Propane at $1.85 per gallon • Electricity Prices up 5 % • National average of 10.1 cents per kwh • A Normal Winter Will Wash Away The Price Drop • Last Winter Was So Warm It Was Off The Charts!

  3. HISTORY OF MIDWINTER NATURAL GAS COMMODITY PRICEPrice Trend For January 07 Futures Contract Source: Wall Street Journal, 9/19/06

  4. EXPECTED EXPENDITURES FOR 2006-2007Low-Income Households Source: ORNL Tabulation from EIA STEO & RECS

  5. SHORT-TERM MARKET CONDITIONS SUPPLY DEMAND • Inventories well above average levels for all major fuels • No repeats of Hurricanes Katrina and Rita • Most (but not all) production losses from last year restored • Normal weather will increase demand • Consumers of fuel oil and propane now compete with European demand • Natural gas demand is highly dependent on industrial and power generation growth

  6. RESIDENTIAL PRICE TRENDS SINCE 1997EIA HISTORICAL DATA • Home Heating Oil Prices have increased 138% since 1997 • Natural Gas Prices have increased 85% since 1997 • Electricity Prices are up 26% since 1997

  7. AGGREGATE RESIDENTIAL ENERGY EXPENDITURES BY LOW-INCOME HOUSEHOLDSEligible for LIHEAP Millions of Dollars SOURCE: ORNL TABULATION BASED ON EIA STEO AND RECS

  8. Natural Gas Supply, Consumption, and Imports Are Projected to Expand Through 2025(1970-2025, trillion cubic feet)

  9. TIGHT MARKETS MEAN MISCHIEF • REMEMBER ENRON AND CALIFORNIA? • AN INVITATION TO SPECULATION AND MANIPULATION • WATCH OUT FOR THE ECONOMISTS!

  10. HISTORY OF MIDWINTER NATURAL GAS COMMODITY PRICEPrice Trend For January 07 Futures Contract Source: Wall Street Journal, 9/19/06

  11. MARKET DANGERSMISALLOCATION • PROBLEMS COMMON TO ‘NETWORK’ INDUSTRIES • SUPPLY IS PRICED AT THE MARGIN WHILE CONSUMER PRICES DISCRIMINATE • BOOM AND BUST INVESTMENT CYCLES CREATE INCENTIVES FOR PRODUCERS TO TRY TO SHIFT RISKS TO CONSUMERS

  12. MARKET DANGERSSPECULATION • A GROWING PERCENTAGE OF TRADE IN ENERGY MARKETS IS SPECULATIVE • THIS INCREASES PRICE VOLATILITY AND PUSHES PRICES UP AND DOWN MORE SHARPLY • MUCH OF THE TRADE IS UNREGULATED WITH NO OVERSIGHT

  13. MARKET DANGERSMANIPULATION • WITH POOR REGULATION COMES LACK OF INFORMATION NEEDED TO PREVENT PROFITEERING • PRICES CAN BE MOVED IN EITHER DIRECTION! • UNDER THE RIGHT CIRCUMSTANCES INDIVIDUAL ACTORS CAN CONTROL AND DIRECT PRICES

  14. WHAT CAN WE DO? • Don’t Drink The kool-Aid • Defend The Provider Of Least Resort With A Balanced Supply/Price Portfolio • Pursue Supply Surplus • Fight Monopoly Market Pricing • Keep Public Benefits Together- Sustainability and Affordability Hand In Hand • Consumer Protection Regulation & Info Vital • When’s The Next Train?

  15. IN SHORT… • SIGN AND ORGANIZE AROUND THE PRINCIPLES OF ENERGY AND WATER SECURITY FOR ALL AMERICANS • www.ncaf.org/issues/energy

More Related