As the discussion about shale gas and our energy choices continues, far too little is said about home energy security and affordability of heating bills. America has 113.6 million homes, but tens of millions of Americans struggle financially to keep homes warm on cold nights.
Especially at risk this year of heating bill shock are the 6.9 million homes that use oil that is jumping in price by another 27% and the poor who face major cuts in programs providing assistance to pay for heat.
By contrast, the 55.6 million American homes who heat with natural gas or the 38.2 million that use electricity for heat will have the treat of a stable, even slightly lower heating bill, thanks to the enormous new natural gas supplies that have driven down the price of gas from $13 for a thousand cubic feet in July 2008 to less than $4 for the January 2011 contract. These lower natural gas prices save many families a total of $1,000 in lower gas and electricity bills, because lower natural gas prices drive down electricity prices too.
Unfortunately unlike natural gas, oil pricing is up. After another round of price increases, heating oil prices that where high last winter will reach on average $3.82 per gallon, according to the EIA. In the Northeast where 80% of the 6.9 million homes using oil are located, a family can use 700, 800 or more gallons each winter, and face a heating bill for $2,500 to $4,000. Even median income families using oil must spend about 7% to 10% of their after-tax income just to stay warm.
A poor family living with $10,000 to $20,000 and using oil may have to spend 20% or more of their income on the heating bill. Remember that a disgraceful 25% of America's children woke up this morning in a poor home.
To make matters worse, major cuts in the Low-Income Home Heating Energy Assistance Program (LIHEAP) are being implemented. Indeed, even when the LIHEAP budget is high, this program typically contributes $300 to $600 for heating bills that reach a thousand dollars and much more.
For tens of millions of Americans finding the money to pay the heating bill is an annual struggle that imposes sacrifices in the form of foregone medicine, food, or needed clothing purchases. As a young lawyer in Philadelphia, I represented good people who had no heat but ice in their homes.
I would ask that discussions about shale gas policy remember the millions of Americans for whom the approximately $1,000 energy savings produced by the huge, new natural gas supplies are no windfall or luxury but a necessity.