www.seacoastonline.com

By Christine Gillette cgillette@seacoastonline.com

PORTSMOUTH - Prolonged cold weather and uncertainty in oil-producing nations are pushing up heating costs for consumers this winter.

"Demand is up considerably," said Joe Broyles, an energy program manager for the Governor’s Office on Energy and Community Service.

Driving demand for oil and other energy sources for heating is the number of days on which homes and businesses are likely to need to turn the heat on, up 23 percent this winter from last year, Broyles said.

"That, I think, caught a lot of people by surprise, so suppliers may not have contracted for as much oil as they need, and the same for consumers," he said. "That’s driven the price up a lot on the wholesale market and (suppliers) don’t have a lot of choice but to pass that on to consumers."

While demand is up, supply is down for some energy sources like oil because of a large-scale strike in the oil industry in Venezuela and worries about war with Iraq, Broyles said.

At Buxton Oil in Epping, oil prices per gallon have gone from $1 to $1.10 last winter to $1.69, said owner Donna Buxton.

"It’s been a very long, very cold winter. People’s consumption is up this year, and with an impending war with Iraq and the Venezuela situation, it’s challenging and it’s made prices go up," she said.

Buxton allowed customers to lock in oil last summer at 99 cents to $1.19 a gallon. But because of cold temperatures, many customers have exceeded the amount of oil they locked in at the lower amount, and that’s forced Buxton Oil to buy more on the open market now at the higher price.

When that runs out, or for customers who didn’t lock in, there’s often frustration with having to pay the market rate, said Buxton.

Buxton Oil works with fuel assistance providers, such as Rockingham County Community Action, which distributes funds to eligible families.

"We’re definitely seeing more demand," said Steve Geller, executive director of the agency. "Things normally start slowing down, or would have started slowing down by this time in the winter, but with the cold weather, that’s not happening."

Already this winter, fuel assistance has been provided to more than 2,600 Rockingham County households - up 200 from last year - with nearly 70 scheduled to come in to apply in the next two weeks, even as the calendar nears the official start of spring.

"A combination of the colder weather requiring more people to use more oil and demand raising prices is really wiping people’s budgets out," Geller said.

Even people who are getting fuel assistance - anywhere from $150 to $1,000 for the winter, depending on income - are using their allowance quickly.

Geller said had President Bush not agreed in January to release additional federal funds for fuel assistance, Rockingham County would have run out by the end of that month.

Applications for fuel assistance are up this year, despite a lowering of the eligibility standards from 225 percent of the federal poverty level to 175 percent.

Reducing the eligibility, Geller said, has meant turning away 411 applicants since the start of 2003, including senior citizens on fixed incomes and working poor families, the largest growing segment of the agency’s clients.

Geller said even with the increase in federal funds, all but about $40,000 of the total $1.64 million allotted for the season is already committed to current clients, and with people still seeking help, could be exhausted.

Prices for sources of heat besides oil, like natural gas, are also higher than last year, but less dramatically because supply is plentiful, according to a local provider.

Rates for this winter are up 7.6 percent from last winter, and were approved last year by the Public Utilities Commission, said Don DiNunno, manager of communications for Northern Utilities, a supplier of natural gas on the Seacoast.

On average, he said, the typical residential customer uses 932 therms of natural gas to heat their house from November to April. Last year, that cost $975, and this year, $1,049 for a difference of $74.

DiNunno said he expected natural gas usage is up this year because of the cold weather, but could not say how much.

"You can assume people are consuming 20 percent or more natural gas," Broyles said, based on this winter’s weather.

About 14 percent of New Hampshire homes heat with natural gas, according to the energy office, compared with 53 percent with oil, 5 percent with electricity and .3 percent with coal. Ten percent of households use wood to supply some of their heat.

Propane, the energy source for about 10 percent of New Hampshire’s heating customers, is not regulated by PUC, so its prices can have bigger fluctuations than natural gas, according to Broyles.

Right now, propane costs about 7 cents more per therm, or 88 cents total, than last year, he said. Electricity is about 12 cents a kilowatt hour, compared with an average of 9.21 last winter.

The best way to cut heating costs, Broyles said, is to cut energy consumption.

"Ultimately, the least expensive energy is the energy you don’t consume," he said, adding that it’s a myth that leaving heat turned up all day, even when you’re not home, is cheaper than turning the heat up later. "It’s cheaper not to spend the energy in the first place."

www.nctimes.net DAN McSWAIN Staff Writer

Little surprise here ---- gasoline prices hit a record high in North County on Monday, as a gallon of regular cost an average $2.03, up 10 cents from a week earlier and 64 cents higher than one year ago, a North County Times survey found.

State officials estimate that the increase costs a typical two-car family an extra $64 a month. The previous record, $1.97 a gallon, was reached on May 21, 2001.

Because California consumers burn about 1.25 billion gallons a month, officials estimate, the oil industry is reaping additional revenue from the state at a rate of $800 million a month.

North County drivers were struggling to hang onto some of that cash Monday, making for a crowded lot at Valley Fuels on East Valley Parkway, where regular cost $1.92 a gallon, among the cheapest in Escondido.

"I think it's greed; I don't think there's a shortage of anything," said Jack Bryson, an Escondido resident, as he filled his eight-cylinder Dodge Ram 1500 pickup.

Also in line for gas was Matt Bere of Solana Beach. He was dwarfed by his Ford Expedition, which he estimates gets 16 miles to a gallon but has plenty of room for his surf board.

"I love the car," Bere said. But the price of gas? "It seems absolutely outrageous."

Across the street, a Chevron station charged $2.10 for regular.

Oil industry analysts say that about half of this year's surge in prices at the pump has been caused by a sharp rise in worldwide costs for crude oil, which in turn have been driven higher by war clouds in the Persian Gulf and curtailed exports from Venezuela.

But energy economists say the other half has gone directly to California's seven giant refining companies ---- BP West Coast Products LLC (the Arco brand's parent), ChevronTexaco Corp., ExxonMobil Corp., Shell Oil Products U.S., ConocoPhillips (76 and Circle K) Valero Energy Corp. (Ultramar) and Tesoro Petroleum Corp. ---- which control supplies and have apparently taken advantage of the turmoil to boost profits.

"Refiner margins have gone up," said Severin Borenstein, a Berkeley economist who heads the University of California's Energy Institute.

Station owners, who have faced skyrocketing wholesale prices for gasoline, have been less fortunate, Borenstein said. "It's very unlikely that dealer margins have gone up."

Another indication of larger profits for refiners in California is the widening premium over retail prices in other states, where refiners pay an equivalent or greater cost for their crude oil supplies.

A survey taken Monday by the U.S. Department of Energy found that the national average for a gallon of regular was $1.69, a staggering 34 cents cheaper than in North County.

Borenstein calculates that California's low-emissions fuel recipe ought to cost about 10 to 12 cents more than gasoline in other states, but that the additional 22 cents probably represents premium pricing by in-state refining companies.

Consumer advocates and some members of Congress have called for investigations into whether oil companies are "price gouging," or reaping unfair profits.

Oil company executives have become increasingly loath to talk to reporters as prices have shot higher over the last 10 weeks. Instead, most have referred calls to industry lobbyists.

One of them, Anita Mangels, of the Western States Petroleum Association, said last week that California's refining companies are simply passing along their higher costs to buy crude oil.

"I think the general consensus out there is that this is a market issue," Mangels said. "It is strictly market conditions that determine retail prices."

Mangels predicted that official probes into high prices at the pump will go nowhere. "Usually, when these things occur (price spikes), there are the inevitable investigations and the inevitable findings that no wrongdoing did occur," she said.

A series of price shocks in 1998 and 1999 sparked a widely publicized investigation by California Attorney General Bill Lockyer, which found no illegal activity but suggested a series of measures to head off future rounds of sudden increases. None has been adopted by the Legislature.

This time, Lockyer has been relatively silent on the issue. Calls to his office Monday were not returned.

Contact staff writer Dan McSwain at (760) 740-3514 or dmcswain@nctimes.com.

3/4/03

www.pe.com 03/04/2003 By MICHAEL FISHER THE PRESS-ENTERPRISE

FUEL: The price of unleaded has risen by 43 percent since last year in the two-county region.

Skyrocketing gas prices forced Anthony Frias to downsize.

The Lake Elsinore construction worker was spending nearly $80 per week commuting to jobs in Los Angeles and Orange counties before he traded his new Dodge Ram last week for a smaller used pickup.

"I needed something more economical," Frias said Monday. "The gas prices were killing me."

The cost of unleaded gas in Riverside and San Bernardino counties has jumped nearly 18 percent since last month, and more than 43 percent since last year, according to the American Automobile Association.

In response, some Inland motorists say they are changing their spending habits, canceling trips and going out less to save money.

Blame spread around

Factors driving the nine-week rise in gasoline prices include war fears, lower crude oil imports, severe winter storms in the eastern U. S. and the switch from winter- to summer-formula gas, the Automobile Club of Southern California reported.

The American Petroleum Institute blames the rising crude oil costs on refiners, saying the increases are being fueled by plunging oil exports from Venezuela. That country struggled through a two-month labor strike that reduced its oil exports to a trickle.

Peter Phun/The Press-Enterprise Jackie Arzate pumps gas in Hemet. She said higher pump prices mean she makes fewer trips to visit her grandchildren in Lakeview.

William Robinson of Perris isn't buying the explanations, and is furious at the gasoline industry.

"My opinion is that our biggest terrorists are the oil companies. They're hurting a . . . lot of people." said Robinson, who dismissed the Bush administration's response to spiking gas costs.

"Bush won't do a . . . thing about it," he said.

Standing at a Hemet gas station, Nacho Ortega filled the pickup truck he uses in his gardening and landscaping business and said the increasing prices were just part of life.

"What are you going to do? Every year it goes up and it goes down," he said.

Conservation urged

Experts say there are simple steps drivers can take to squeeze every last mile out of their gas tanks.

Properly inflated tires, well-maintained spark plugs and a clean air filter can all boost a vehicle's mileage, Auto Club spokeswoman Elaine Beno said.

"You ought to use the most energy-conserving vehicle you own as much as possible," Beno said. Ride-sharing and using public transportation can also help, she said.

So far, the rising prices have not affected sales of new cars or sport utility vehicles, said Jay Gorman, executive vice president of the 1,400-member California Motor Car Dealers Association.

"People buy vehicles generally without regards to the mileage but based upon their needs," he said. "If you've got a family with five or six kids, a compact car isn't going to help you a bit."

People "have to get to work, so what are the options? You re-adjust your discretionary income," Gorman said.

Doing less, spending more

Jackie Arzate said higher gas prices have forced her to cut back on visits to her grandchildren and great-grandchild in Lakeview.

"I've had to stay home a lot more," the Hemet retiree said as she pumped $10 worth of gas into her Chevrolet Camaro.

At Costco in Temecula, motorists lined up three-deep Monday to save a few cents per gallon.

Michele Popiela of Wildomar says higher gas prices have forced her to cut down on dinner out with her husband.

"It's scary, because you don't know how high the prices will go," said Popiela, who commutes three days a week to San Diego. "We're going to have to cut back on things we never used to think about."

Moreno Valley's Charlie Perry said he is trimming his personal trips, because his work requires daily drives to Temecula. He said he may park his late-model Infinity in favor of a compact car that gets better mileage with cheaper gas.

County impacts

San Bernardino County buys its fuel at bulk rates for its 22 fueling sites, Roger Weaver, the county's fleet-management director, said. While the county pays below market prices, its prices have increased, he said.

The county has not enacted measures to counter the price hikes, Weaver said, but given the expected state budget cuts, county agencies are working on plans to trim spending.

The escalating gas costs won't keep Riverside County from conducting its normal business, spokesman Raymond Smith said. It might cost more, but "we can't stop patrolling and we can't stop checking on child welfare cases," Smith said.

The biggest consumer of gas is probably the Sheriff's Department, Smith said. Sheriff's Department spokeswoman Shelley Kennedy-Smith said most deputies gas up at county pumps and don't worry about prices at regular stations.

Reach Michael Fisher at (909) 368-9470 or mfisher@pe.com

Staff writers Marlowe Churchill, Imran Ghori, Rocky Salmon, Rich Saskal and Bradley Weaver contributed to this report.

www.marinij.com244071217138,00.html By Michael Howerton, IJ reporter

Motorists lined up at the Arco gas station in Mill Valley yesterday, waiting to buy gas at one of the few stations in Marin where it was still less than $2 a gallon.

The station, at 789 Redwood Highway, was charging $1.95 for a gallon of regular unleaded. Five weeks ago, a gallon at the station cost $1.59.

"It's ridiculous," said Kurt Delacampa, 37, while he pumped gas at the Mill Valley Arco on his way to Muir Beach from his home in Vacaville. "Two dollars a gallon is terrible. We have to pay because they want to go over there and play war."

Delacampa said he mostly gets around on his Harley-Davidson motorcycle these days, trying to use his car less because fuel prices are rising.

Mark Rizzo, 60, a Marin resident, said he fills up his tank twice a week for his daily commute to Sonoma County.

"There's too much fluctuation in the gas prices," Rizzo said. "There is no basis for the price of oil to fluctuate this much. It's not the war. I hope they determine this is price gouging. There needs to be an investigation."

Mario Lopez, 33, said he uses about a half-tank of gas a day driving to the various sites where he works on construction.

"I don't have a choice," he said. "I live in Vallejo and have to drive to San Rafael and Santa Rosa for work. It's a lot of money."

Marin motorists didn't have many kind words for the ever-rising gasoline prices, but most were resigned to paying more. Some blamed the looming war in Iraq, the oil strike in Venezuela or the greed of gasoline companies for lightening their wallets, but most treated the increase with a shrug, saying they have not felt the pinch too sharply.

"You don't have any control over it," said Darlene Riley, 53, of San Rafael as she filled her tank at Gateway Gas in Terra Linda. "I'm not pleased, but there is not a lot to do about it. But I do make a point of coming here where the gas is cheaper, so I guess I do care about it."

Gateway gas was selling a gallon of regular unleaded for $1.95 yesterday. The station marks down all gas five cents a gallon on Sundays.

"They like cheap prices so on Sundays they come," said Eddie de Leon, clerk at Gateway Gas. "Gas is too expensive now."

"What are you going to do?" asked Mitch Bishop, 46, of San Rafael, as he filled his tank at Gateway Gas yesterday. "It's still the cheapest gas in the world."

A Shell gas station on Irwin Street in downtown San Rafael was charging $2.23 for a gallon of regular unleaded yesterday.

Amy Brody, 30, of Mill Valley, pulled into the station on the way to a friend's house. She usually fills up at a cheaper station, she said, but was worried she would run out.

"The prices are way too high," she said. "It's a big deal. It's annoying and it makes me mad."

Jim Deichen, 49, of Kentfield, filling up at the Irwin Street Shell, said he doesn't compare prices when he needs gas. He just pulls into the most convenient station.

"I don't shop," Deichen said. "Not yet anyway. It's not worth my time. I notice it, but I haven't changed my behavior."

The prices at the pump are changing the way people shop for cars, said Sabrina Crilly, sales person at Honda of Corte Madera. The higher gas prices climb, the more inquiries the dealership receives about the Honda Hybrid, a gas-electric car which gets almost 50 miles a gallon.

"People always ask about the mileage now," Crilly said. "They are more conscious about it."

Randy Lakritz, sales manager at Novato Toyota, said that with the rising gas prices, he has seen a growing interest in the Prius, a hybrid car which gets about 52 miles a gallon.

"(High gas prices) have definitely affected sales," he said. "People buy them for the good gas mileage and also because they are politically correct, less dependent on oil with the situation in the Middle East."

But the popularity of the gas-guzzling sports utility vehicles shows no sign of waning, Lakritz said.

"You'd be surprised how many people ask about the miles per gallon on the SUVs, but when they are told they get about 18 miles per gallon, they just shrug their shoulders and move ahead with the purchase," he said.

Lakritz, a Novato resident, said higher gas prices haven't persuaded him to give up the demonstration SUV he uses to drive to work.

"It guzzles gas," he said. "So I'm guilty too. But at least I have a short commute."

Contact Michael Howerton via e-mail at mhowerton@marinij.com

seattlepi.nwsource.com Tuesday, March 4, 2003 By PAUL NYHAN SEATTLE POST-INTELLIGENCER REPORTER

Gasoline prices continued to rise at pumps around Washington state, as the average price of a gallon of regular unleaded hit record levels in Olympia, Spokane, Tacoma, Seattle and other regions in recent days.

In the Seattle area, drivers paid, on average, $18.39 to fill 10-gallon gas tanks with regular unleaded gas on Friday, while they paid $12.14 a year ago, according to the most recent data from AAA.

Drivers have watched gas prices rise steadily over the past month. Local gas station owner Ric Kastner said the price he paid for a gallon of gas for his pumps in Magnolia jumped 41 cents in 24 days.    Phil H. Webber / P-I   Ric Kastner, who owns Ric's Automotive & Texaco Inc. in Magnolia, fills a gas tank at his station; his premium was selling for $2.15 9/10 a gallon yesterday. "I have never seen them (gas prices) go up this high this fast," he said.

"I have never seen them go up this high this fast," said Kastner, who owns Ric's Automotive & Texaco Inc. in Magnolia and has worked in the oil business for the past 34 years.

Industry officials blame some of the price run-up on tensions over an impending war with Iraq and the labor dispute in Venezuela, which is settled but continues to hamper supply.

"You do have speculation about the war with Iraq that does increase concern about future supply," Exxon Mobil Corp. spokeswoman Carolin Keith said.

But Washington state also lacks the level of competition found in other regions of the country, according to Tim Hamilton, executive director of the Automotive United Trades Association in Olympia.

"At the retail (level), there is a limited number of companies marketing it," Hamilton said. "The four big guys control a major amount of the retail market: BP Plc.'s Arco, ChevronTexaco Corp., Shell Oil Co. and ConocoPhillips, which owns the 76 brand."

Kastner said retailers are not profiting from the higher prices.

"If I was making all the money, I'd be smiling," Kastner said. "But the dealers aren't getting rich."

Keith said Exxon Mobil prices reflect the global market.

"It isn't an issue of gouging; it's an issue of market pressure," Keith said.

The reasons and level of profits behind the rise may be unclear, but the increases continued last week. After hitting a record level in Seattle, Bellevue and Everett on Wednesday, $1.77 a gallon, prices kept rising to $1.84 by the end of Friday, according to AAA.

In Olympia, the price for a gallon of regular unleaded also rose to $1.74, up sharply from $1.35 a month ago and $1.14 a year ago, the automobile association reported.

In Spokane, regular gas went for $1.72 a gallon, another record.

Nationwide, the price of gasoline also jumped. A gallon of regular unleaded gas cost, on average, $1.69 across the nation, a 21-month high, the Energy Department reported yesterday.

Oil-industry executives say the price of crude oil, which rose 60 percent over the past year, is the main culprit behind the increases.

Refiners also have been slow to begin raising production of gasoline, which normally occurs at this time of year, because they've focused on making heating oil during the cold winter in the Northeast.

Texaco station owner Kastner offered a little hope for beleaguered drivers. "This summer, I wouldn't be surprised if they (prices) dropped," he said.

This report includes information from Bloomberg News.