PORTLAND, Maine — No longer are Tom Wright’s heating costs tied to events a world away over which he has no control. Faced with a $10,000 heating bill, he got rid of his oil furnace and brought in a wood pellet stove to heat his home and office.
Oil and gasoline prices are sky-high, and heating oil use is tumbling as people find alternative ways to stay warm — evidence that Americans’ efforts to wean themselves off oil can bear fruit.
“It’s more than just watching the price of oil,” said Wright, a former construction company executive who now heads a nonprofit that works with at-risk children. “It’s watching what’s going on in the world and how much is affected by the need for oil.”
Millions of U.S. households use oil to heat their homes, but the Northeast has a higher proportion of people who use it as their primary heating source than any other region. Nowhere is the dependence greater than in Maine, where oil heats three out of four homes.
Heating oil prices have shot up 32 percent over the past four months in Maine. But consumption has fallen by more than a third in the past five years, according to the U.S. Energy Information Administration. Nationally, sales of residential heating oil have fallen 26 percent.
Unrest in the Middle East and high worldwide demand for oil have pushed crude prices to around $100 a barrel and pushed gas prices to nearly $4 a gallon. But with heating oil, inventories are at a five-year high even though demand is down, said John Kerry, director of Maine’s Office of Energy Independence and Security.
He blamed oil traders of artificially driving up prices because of the political turmoil in the Middle East.
“The fundamentals of the marketplace, in my estimation, do not justify the high prices we’re seeing today,” Kerry said.
In 2004, Americans bought nearly 6 billion gallons of heating oil. The use in 2009 use totaled about 4.4 billion gallons, according to the EIA.
At the same time, residential heating oil consumption in Maine fell from 361.2 million gallons to 233.7 million gallons — a drop of 35 percent. In New England as a whole, heating oil use fell 17 percent from 2004 to 2009.
The price of heating oil for the most part tracks the price of crude oil. Residential heating oil was selling for an average of $3.20 a gallon in the U.S. in January — the highest it’s been since October 2008, shortly after crude oil skyrocketed to nearly $150 a barrel.
Frustrated with such prices, people are making their homes more energy-efficient, supplementing with space heaters, buying more efficient oil furnaces, or simply switching to natural gas, wood pellets or some other fuel.
Some consumers have simply decided they’re going to wean themselves off oil after living through wild price swings and uncertainty, said Jamie Py, executive director of the Maine Energy Marketers Association.
“It’s a simple ‘I’m going to reduce my consumption,’” he said.
Wright needs to heat his home in Freeport, as well as his office in a barn — all told, about 7,000 square feet.
The oil company wanted $10,000 up front to heat his house this winter under a pre-paid contract, he said. Instead, he expects to buy 8 or 9 tons of pellets, which have been selling at $210 a ton as of late.
Besides the cost savings, Wright likes the idea of buying a Maine-produced product rather than foreign oil.
As the price of oil goes up, he is convinced he made the right decision. His high-end furnace cost $24,000, but he’s expecting to make that up in five to seven years. Heating oil was selling for an average of $3.65 gallon in Maine on Monday, up from $2.76 at the beginning of November.
Suzanne Sayer weatherized her two-bedroom ranch house in Kittery last fall by adding insulation in the attic and basement, replacing two doors, resetting a window, and closing a gap between the chimney and the house. Sayer has oil delivered twice in a typical winter, but this year she hasn’t had to have a delivery since her tank was filled in August.
“I wanted to see if could go the entire winter without a delivery,” Sayer said. “I’ll probably wait until summertime, when the price has gone down, to buy more oil.”
The price volatility takes a toll on oil dealers, who are seeing their oil sales drop and have to gamble on when to buy oil, Py said.
“The market is driving people to do what makes sense for them,” Py said. “We’ve been successful in telling people to conserve.”
