Tips for combating the rising cost of heating oil

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NEW YORK (AP) ? If only La Nina would foot some of the oil bill.

It’s La Nina, a weather phenomenon that occurs when sea surface temperatures are colder than normal in the tropical Pacific Ocean, that’s to blame for forecasts predicting a very cold and snowy winter in parts of the country.

That’s particularly bad news for the 5.7 million households in the Northeast that rely on heating oil, because prices are near record highs, averaging around $3.80 a gallon. And that’s expected to increase before winter is over.

WHY SO HIGH?

The cost of heating oil is getting pushed up by the soaring demand for diesel fuel in Latin America and Asia.

That’s because the U.S. is a net exporter of diesel, which commands the highest premium over the price of crude, or unrefined oil, explained Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. The refining process for diesel and heating oil is similar, and refineries these days are more likely to chase the profits from diesel.

Limited supply makes for higher prices. And a severe cold snap could send costs up even more. The U.S. Energy Information Service expects an 8.4 percent rise in heating costs for homes that use oil this winter, a total of about $2,490 for the season.

There are some moves homeowners can take to keep costs down.

STEPS TO SAVING

Get an oil-burner tune-up.

Call your oil supplier for an appointment to have your burner cleaned and maintained for the winter to ensure it’s operating efficiently. Also check ducts and pipes to make sure they are properly sealed and insulated.

Lock in a price with your oil supplier.

Setting a price for the season can keep costs down and make your expenses more predictable. There’s usually a fee of about $100 to $150 to lock in a set price per gallon, but you will likely save that much before winter is out. Your provider may have other options; such as, capped prices, in which you’ll pay the market rate if the price of heating oil falls but only pay limited increases; and level billing, which spreads payments throughout the year.

Consider an oil cooperative.

Like food co-ops, energy co-ops enable purchasers to join together to negotiate lower costs, typically 15 to 25 cents per gallon less than for-profit companies. Among the co-ops in the Northeast are: The Massachusetts Energy Consumer Alliance http://www.massenergy.org/ ; NYPIRG Fuel Buyers Group http://www.nypirg.org/fbg/ ; The Energy Cooperative in Pennsylvania www.theenergy.coop ; and Heat USA www.heatusa.com .

4. Insulate, seal and block leaks.

Even if it’s not feasible to put another layer of insulation in your attic, shave some dollars off heating costs by making sure your doors are properly sealed and storm windows are completely in place. Consider insulating windows with a layer of shrink film ? kits sell for about $3.50 for three windows. Also use draft blockers and weather stripping to keep the cold out.

5. Install programmable thermostats.

For around $60, you can buy a thermostat that can be set to raise and lower the heat at different times of the day. Most homeowners should be able to follow the instructions and install the device themselves. Establish a program based on your family’s schedule, so that you’re lowering the thermostat when you’re away or asleep, and you can cut heating costs without sacrificing comfort.

CONSIDER CONVERTING

Another option for cutting heating costs is converting to natural gas, if service is available in your community.

Natural gas prices have been holding steady as the weather remained warm so far this season, and although they are expected to rise as winter sets in, it is typically less expensive to heat a home with natural gas.

A conversion takes a big up-front investment, but the money can usually be recouped in about five years. That’s particularly true if you had an old, inefficient oil burner.

For starters, if there is no gas line leading to your house to power appliances like a stove or clothes dryer, you’ll have to have one installed. Your local natural gas utility may do the installation for free or a low cost.

A new gas boiler will cost between $2,000 and $4,000, depending on its efficiency rating, and installation can cost an additional $500 to $1,000. Since boilers need proper ventilation, you may also have to update the flue in your chimney so that it can handle the exhaust from a gas burner.

Your local gas utility can help you determine how much you might save with a conversion ? many have calculators on their websites ? and may offer incentives like boiler rebates or installation discounts to encourage you to convert.

But there’s one more cost to consider, and it’s the one that stops many homeowners from converting: removing the old oil tank. In many communities, local law requires tank removal, particularly if it is underground. The cost can climb to thousands of dollars, especially if the tank is underground or if the removal is otherwise complicated. Your community may also require you take proper steps to dispose of the tank in an environmentally safe way. Make sure you get a detailed estimate that includes costs for labor, materials, removal of any remaining oil, local permits and scrapping the tank.