LEWISTON — The cost of staying warm in Maine has reached record levels in 2022, with heating oil reaching the $7 per gallon mark earlier in the year and currently at an average of $4.38 per gallon statewide, according to figures published by the Governor’s Energy Office.

It doesn’t matter whether you use oil, propane, natural gas, wood pellets, wood or kerosene to heat your home or office, it’s going to cost more this winter.

Perhaps a bigger concern is the availability of supply of some fuels, like K1 kerosene or even wood pellets. K1 kerosene is a low sulfur blend with fewer impurities, which means it requires more refining than regular diesel. Another contributing factor is that K1 is also essentially the same formulation as jet fuel, which has seen an increased demand this year as passengers return to flying.

Prices for K1 were so high earlier in the summer that many dealers balked at buying large quantities, deciding to wait for prices to drop. They have come down, but now the supply is spotty in some areas and as a result, some oil suppliers in the area are not taking on new customers.

Another local dealer is looking into trucking K1 kerosene in from Canada, because of a lack of availability at Boston and Portland storage facilities. That would raise the cost of the fuel even further.

None of the dealers contacted by the Sun Journal wanted to discuss the situation.

Because K1 kerosene is a diesel product, you can safely substitute #1 diesel for the kerosene temporarily. However, it will not burn as efficiently or cleanly as K1. 

Robert Linkletter is the owner of Maine Woods Pellet Co. in Athens. He said his advice to pellet users is secure a backup source or get extra pellets before the end of November or December at the latest. His company is among the largest suppliers of wood pellets in Maine.

“We’re doing everything in our power to meet demand,” Linkletter said. But the fact is they are falling behind this year for several reasons.

Normally, Maine Woods Pellet cranks out 100,000 to 120,000 tons of pellets a year, but Linkletter said they’ll be lucky to reach 100,000 tons. The primary reason is staffing, or the lack thereof. Parts for machinery are harder to source and subject to availability and finally there’s a lack of pallets used to transport and store the wood pellets.

Linkletter said pallet makers are facing staffing shortages and cannot keep up with demand. He said he has to source them from Connecticut and Rhode Island and bring them to Maine.

The Governor’s Energy Office confirms Maine is the most heating oil dependent state in the country, with more than 60% of homes reliant on heating oil, compared with only 24% to 42% in other parts of New England and only 4% nationally.

In an email statement to the Sun Journal, Dan Burgess, director of the Governor’s Energy Office, wrote, “As a large, rural state with an aging housing stock, Maine is also dependent on fuels imported from out-of-state, delivered by truck, and stored in tanks at homes and businesses. This makes Maine distinctly vulnerable to the increased prices and volatility the global fossil fuel market is now experiencing due to the Russian invasion of Ukraine.”

WHY SUPPLY IS LOWER AND PRICES ARE HIGHER

Prices of gasoline and diesel have been rising for the past week or two and analysts indicate there is more volatility ahead for the fuel markets.

In a letter to Gov. Janet Mills dated Aug. 18, U.S. Energy Secretary Jennifer Granholm cites lower supplies of fuels as a major concern. Natural gas supplies are down 12% below the five-year average. Granholm cites U.S. Energy Information Administration data that shows inventories of gasoline on the East Coast are 47% below seasonal average and 63% below average for diesel in New England.

The New York Times and Bloomberg have reported that several West Coast refineries have shut down for maintenance in the past two weeks and Bloomberg has reported a fire at a BP refinery in Ohio shut down last month and may not reopen until 2023. The seasonal refinery closures are routine and temporary, but supplies are not likely to recover in the next few months.

Gov. Mills and other New England governors have been pressing the Department of Energy on their concerns about the supply of heating oils and have made specific requests to address fuel supply concerns for the region.

Burgess said the governor, through the Energy Office, “is continuing to engage with state and federal agencies, as well as industry representatives, to closely monitor fuel supplies as we enter the winter heating season.”

Mills has also requested additional funding for the federal Low Income Heating Assistance Program, and while Congress approved an additional $1 billion in emergency supplemental funding last month, Maine will see only about $8 million of that.

According to MaineHousing, the number of applicants for heating assistance is triple what it was this time last year, with applications for the Home Energy Assistance Program opened five weeks earlier than usual.

Community Concepts in Lewiston accepts and processes applications for energy assistance for Androscoggin and Oxford counties. Energy manager Lisa McGee said they are seeing a similar rise in the number of applications for the Home Energy Assistance Program, with the current number of applications at around 3,000 compared to last year at the same time, when the agency saw around 1,200 applications. McGee said they are also getting a lot of calls for help from people having difficulty paying their electricity bills.

The state has updated its 2022-23 winter heating guide with a full list of resources for people to help stay warm this winter and find heating assistance if needed. That guide is available at https://www.maine.gov/energy/winter-heating-resources.

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