By Phil Hirschkorn
FREEPORT, Maine — Aug. 31, 2022 — Inflated prices, low inventories, and potential supply disruptions are expected to affect Maine in the coming months, a state where 60% of homes rely on heating oil, the most heating oil dependent state in the nation.
While the price topped out at a record $6.38 a gallon earlier this year, the average statewide price is currently $4.58, which is 71% higher than the price a year ago, when it was $2.68 a gallon, according to the Maine Governor’s Energy Office
With an average home tank capacity of 250 to 275 gallons, homeowners continue to foot the bill for and adapt to higher costs.
Charlie Burnham, who has owned Freeport-based Charlie Burnham Heating Services for the past 32 years, said Wednesday, “The customers seem to be doing very well at keeping up with their bills. A lot more have set up budgets for the coming winter, being concerned.”
Burnham said more customers are pre-paying with a cash discount, spreading out payments over 12 months, locking in a lower price and automatic delivery.
“‘Cause if you get two deliveries in a month right now, you could easily be looking at $1,500 fuel bill in a month,” Burnham said.
About 42,500 Maine households benefitted from the Low Income Home Energy Assistance program, known as LIHEAP last winter, with an average benefit of $722.
But given the higher prices, funds that paid for a tank-and-a-half will now cover only half a tank, according to Maine Housing, which administers the benefit.
The Maine Energy Marketers Association, which represents 300 liquid fuel dealers, is keeping a close eye on low inventories, affected by global events such as the European Union embargo on Russian oil following Russia’s invasion of Ukraine.
“This year, they’re lower than normal, in fact at a five-year low, but we don’t anticipate any supply disruption,” association President and CEO Charlie Summers said on Wednesday.
Summer said, “Europe is now looking for their liquid fuel supplies elsewhere. Of course, you have the United States is not producing as much energy as it did just a few years ago, and that has further constricted the supply.”
Summers said the bulk of Maine’s heating oil is imported from Canada and routed through two depots, in Bangor and South Portland, to Maine distributors.
Summers said, “These are local small businesspeople, by and large. They’re generational businesses. They’ve been through the ups and downs in the market. They know how to anticipate that.”
Maine Governor Janet Mills and the five other New England governors wrote U.S. Energy Secretary Jennifer Granholm on July 27 about maintaining and coordinating the supply of heating oil and natural gas, including the possibility of tapping the regional Northeast Home Heating Oil Reserve “if heating oil supplies are severely disrupted.”
Granholm is expected to meet with the governors and their state energy directors after Labor Day to plan ahead.
On July 29, Mills wrote Granholm about securing more federal funds for heating oil assistance.
“I urge you to seek all avenues to provide additional LIHEAP funding for Maine, including working closely with Congress,” Mills wrote.
On August 5, Maine Congressman Jared Golden and Senator Susan Collins wrote congressional appropriations leaders to make emergency supplemental funding available for LIHEAP, a letter signed by 58 bipartisan members of the House and Senate, including Maine Congresswoman Chellie Pingree and Senator Angus King.
Golden is also co-sponsoring a bill to allocate $4 billion in emergency funding for LIHEAP, which his says, would result in doubling assistance for Maine residents to $40 million.
Golden’s challenger for reelection, Bruce Poliquin, has criticized Golden’s vote for the Inflation Reduction Act, signed by President Joe Biden, as a measure that will not reduce inflation.
Paul LePage, who is running against Mills in this year’s governor’s race, has criticized her signing a law last year for the state to divest from the fossil fuel industry as undermining oil supply.
The law directs the $17 billion Maine Public Employee Retirement System (MainePERS) to divest $1.3 billion from fossil fuels by 2026, according to the Maine Chapter of the Sierra Club.
LePage has also said a better use of the $850 revenue surplus rebate checks the Mills administration and the state legislature with bipartisan support decided to send to 92% of Maine taxpayers, totaling $729 million, would have been to set aside funds to pay for home heating oil this winter.
Mills, who labelled the rebates inflation relief, said residents could decide for themselves how to use the funds for energy costs or other needs.