Turbulent gasoline prices this summer are paving the way toward speculation that energy problems could continue into the winter, with a rise in natural gas and heating oil prices.

In June, analysts warned that a shortage in our nation’s energy reserves, as well as in power generation, could cause blackouts, brownouts, and could generally make this winter as miserable as the summer has been.

Last week, the shortages warranted an official response from President Clinton. He announced the creation of a temporary 2 million barrel heating oil reserve for Northeast states, but said congressional action is needed to make it a permanent fixture akin to the national crude oil Strategic Petroleum Reserve (SPR). The House of Representatives has already authorized the reserve, but failed to provide the money to pay for it.

“Winter may seem far off, but if we don’t do something now, reserve stocks of heating oil may not be in place before the cold winter,” he said. “The action I take today will leave us far better prepared to face the winter months but it does not relieve Congress of the responsibility to act.”

There is more than just the shortage of oil and gasoline in the U.S. that should worry contractors and consumers. Natural gas also seems to be in short supply, and this issue apparently has not been addressed at governmental levels.

On July 18, 2000 a permanent heating oil reserve for the Northeast was created to curb potential high fuel costs this winter. Before the bill is sent to the President, both the House and the Senate will have to work together to resolve their differences, making the heating oil stockpile permanent.

Natural gas levels

The U.S. is already dependent on foreign imports for half of its oil needs, and is now perilously short on spare natural gas. The American Gas Association estimates the storage of working gas in the U.S. two weeks ago was only 43% full, 23% lower than a year ago. This should serve as a warning signal for contractors.

Jen Snyder of Cambridge Energy Research Associates, says, “Gas supply has been tight for the last couple of years and only warm winters have kept us from crisis. We are running a risk of that crisis this winter.”

This winter, if gas levels continue to stay low and prices remain high, contractors are going to face customers who may not understand why their heating bills have risen. Consumers will be looking for the source of the problem (“There must be something wrong with the furnace, right?”) and looking to heating contractors to provide a solution.

Keeping your employees informed is the key to keeping customers up-to-date and comfortable. It is not an easy task, but it can be made easier by ensuring that every employee — especially those in direct contact with customers — is well informed and can either answer questions or direct customers to someone who can.

Beware of receiving negative feedback and do not take it personally. The customer may be frustrated and want an easy fix, and in his mind that easy fix may begin and end with the heating contractor.

One possible solution to be presented by contractors, according to analysts, is to suggest updating the heating system with an improved model that is more energy efficient and can cut fuel costs. By suggesting one of the many new energy-efficient systems, contractors can save their customers — and themselves — the worry of old systems breaking down. This may also be a good time for contractors and techs to offer service-maintenance agreements to customers to ensure that units run more efficiently.

Many are waiting for relief from energy companies, which have been reluctant to increase exploration and production spending for either oil or natural gas after reining in investment during 1998’s price crash. Don’t hold your breath.

Petroleum Finance Company (PFC) of Washington, says, “there is little relief in sight for all three energy markets, given the time required for additional supply sources to be developed.”

Any solutions presented may only make a small dent in the frustrations felt by consumers and contractors. Just remember to communicate with customers, offer options, and position yourself not as an opportunist, but as an ally.

Visit www.achrnews.com for additional information on the energy crisis.

Sidebar: Forum draws attention to energy shortage

WASHINGTON, DC — Appropriately named “Energy Efficiency: Challenges for the Next Administration,” the 11th Annual Energy Efficiency Forum, held at the Press Club here, was primed to draw out politicians from both sides of the aisle. Speakers, including U.S. Energy Secretary and several senators, took center stage on one of the largest platforms for energy reserve improvement in recent memory.

Bill Richardson, U.S. Energy Secretary, spoke on the current administration and its efforts to improve the environment and save energy for the future.

“The Clinton-Gore Administration continues to lead a national effort to substantially lower building energy use and operating costs,” he said. “Building energy code adoption already has save $775 million in reduced energy costs.”

Richardson stated that in addition to ideas on how to increase the reserves, there have been standards proposed for washing machines that would save enough electricity to light 16 million U.S. homes for 25 years. With the implementation of these proposed standards, by the year 2020 greenhouse gas emissions will be cut by an amount equal to that produced by 3 million cars every year.

He said the administration’s goal is to have new standards in place by the end of the year for a variety of appliances, including central air conditioners, refrigerators, water heaters, and fluorescent lamp ballasts. Senator Frank Murkowski (R-AK), chairman of the committee on energy and natural resources and a George W. Bush supporter, commented on the current state of gas and oil prices and supplies, hinting that the administration should have done more, sooner, to prevent the shortage.

He spoke of obtaining the oil supply from within the U.S., instead of relying on Iraq. He talked of the GOP plan to explore Alaska’s Arctic reserves, as well as develop several tax credits for specific environmentally friendly energy use.

“We recognize the contributions that renewables can make in the overall effort to promote our energy security,” he said. “Our bill would expand the tax credit for renewable energy sources to include wind and bio-mass facilities, as well as provide a tax incentive for residential use of solar power.”

One thing that everyone seems to agree on is that our energy resource depletion is a problem that needs to be addressed before resources — and time — run out.