Energy Consultant For Oil Dealers: Malloy Wrong on Natural Gas Prices

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As Gov. Dannel P. Malloy touts a new natural gas line to Amity Regional High School in Woodbridge, oil dealers in the state continue to oppose his pedal-to-the-metal gas strategy, with data that shows prices might not be so one-sided after all.

Malloy’s energy plan calls for a sharply increased reliance on natural gas in part because prices will remain lower than home heating oil for the foreseeable future.  That’s based largely on supplies and new technology that lets us get at the gas in the ground.

Hold on, says the engineer and energy consultant who prepared a report for the Independent Connecticut Petroleum Association, which represents oil dealers. For most of the last generation, oil prices were lower than gas for home heating, and we just might revert back to that pattern.

“Extrapolating future prices for the next 25 years based on a four year price difference does not produce reliable price values and can severely overestimate projected cost saving by switching from oil to natural gas,” said John E. Batey of Energy Research Center Inc., in Easton. “This is a serious deficiency in the draft Comprehensive Energy Plan.”

Batey added, “When biodiesel fuels are blended with home heating oil at a ratio of only 15%  to 20%, home heating oil has a lower global warming potential than natural gas.  Biofuel use in homes is increasing, and it can be an important option for meeting Connecticut’s renewable resource goals.”

It’s true that predicting heating oil and natural gas prices has always been a fool’s game, but Batey is clearly bucking a trend here. We’ll have more on this soon, with some links to charts.

 

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