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There’s more fuel, but expect to pay more for heat this year

Forecasts from energy experts say the United States is on track to generate more of the energy it needs, including drilling for oil and natural gas in Ohio, a trend that promises to grow for at least 15 years.

Still, the government predicts that more than 90 percent of the homes in the U.S. will pay more for heat this winter compared with last winter.

The Energy Information Administration said last month the average cost to heat a home with natural gas, for example, will rise 13 percent to $679 for the entire winter heating season Oct. 1 through March 31.

Roughly two-thirds of all homes in the Midwest are heated with natural gas, according to the EIA.

Costs are projected to rise less for those who use propane and electricity for heat, the EIA said. Propane users on average will pay $1,666, or 9 percent more than last year, to heat their homes this winter, while electricity users will pay on average $909, or 2 percent more.

Heating oil users will actually see the average cost drop 2 percent to $2,046 for the winter, the EIA said.

Changing energy prices explain most of the differences in expected heating costs compared with last winter, the EIA said.

The anticipated rise in heating costs comes at a time when fuel is becoming more abundant in this country.

Last week, the International Energy Agency in London issued an annual report saying rising oil output from North America will reduce the role of Middle Eastern nations in supplying oil. The abundance of oil, natural gas from new discoveries and growth in renewable energy sources is likely to help drive industrial growth in places like Ohio and throughout the Midwest.

The agency said that natural gas in the U.S. now trades at one-third of imports to Europe and one-fifth of those to Japan, with average Japanese or European industrial consumers paying more than twice as much for electricity as their U.S. counterparts. It said that China’s industry pays almost double the U.S. level.

The agency said the U.S. should see its share of global exports of energy-intensive goods slightly increase to 2035, “providing the clearest indication of the link between relatively low energy prices and the industrial outlook.”

In May, the Ohio Department of Natural Resources said that at the current rate of growth, Utica shale well production will exceed the yearly output of all of Ohio’s nearly 51,000 conventional wells by as early as 2015.

Based on 2012 Utica shale production averages, the department said a single Utica well produced as much oil as 312 conventional wells and a single Utica well produced as much natural gas as 448 conventional wells.

During 2012, 87 Utica wells produced 12 percent of Ohio’s total oil production and 16 percent of Ohio’s total gas production. Last week, ODNR said that 180 Utica wells were producing and 601 were drilled.

Law firm Bricker & Eckler LLP, which represents the oil and gas industry, said exploiting Ohio’s shale gas has led to projects worth about $12 billion, including processing plants. The amount does not include royalty payments.

The Utica is still in the exploration phase, said attorney Matt Warnock, and potential remains largely unknown.

“People are trying to figure out the hot spots, and it’s still early in the game,” he said.

The Energy Information Administration, also in a forecast, said the U.S. produced more crude oil in October than it imported for the first time since early 1995, with monthly estimated domestic crude oil output averaging 7.7 million barrels per day in October, the highest production for any October in 25 years. By comparison, oil imports were 7.6 million barrels per day.

The EIA boosted its forecast for U.S. natural gas production by 0.4 percent this year and nearly 1 percent for next year, “as domestic natural gas output reached record levels during the past several months despite lower gas prices.”

It said gas from the Marcellus Shale, which reaches into Ohio, has been the main driver of this production growth.

Meanwhile, electricity from renewable energy sources is growing. In some places like California, it’s experienced strong growth. During the first eight months of 2013, renewable energy, including hydropower from dams, supplied 19.1 percent of total electricity generation in California compared with 12.2 percent during the same period five years ago.

Wind power is forecast to grow by 17 percent this year and by nearly 4 percent in 2014, accounting for more than 4 percent of U.S. electricity generation in 2014. Solar, too, will increase 82 percent this year and jump another 84 percent in 2014. But utility-scale solar power will continue to be a small share of total U.S. electric generation at less than 1 percent.

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