State of Nebraska
Heating Oil and Propane Program
2003/2004 Winter Heating Season

Annual Report
July 2004

Executive Summary

Nebraska's heating oil and propane prices were stable during the 2003/2004 heating season.  Factors that impact prices each season include:  national and state inventory and import levels; refinery downtime; prices of crude oil and natural gas; the weather; the economy; and the political arena.  All of these factors lead to increased demand or lower-than-normal supplies during the winter heating season.  Factors impacting 2003/2004 heating season prices were:

  National inventory level of heating oil near historical low at the end of the 2002/2003
     heating season and the continuance of low levels at the beginning of the 2003/2004
     heating season thereby lacking the normal cushion;
  National inventory level of propane at the lowest level in over 30 years at the end of the
     2002/2003 heating season and the start of the 2003/2004 heating season below the level of
     60 million barrels (the level considered to be adequate for winter);
  Regional propane storage goal not attained during the traditional build season (April
     through September);
  Strong flow of propane imports;
  High crude oil prices;
  High natural gas prices;
  Oil refinery shutdowns due to planned maintenance and unexpected hazards;
  Power blackout on August 14, 2003;
  War with Iraq;
  Improving economy; and
  Relatively normal winter temperatures.

Of the factors that impact prices, weather remains the key wildcard each winter.  The state had relatively normal winter temperatures since degree days indicated the weather to be warmer than normal by only 5 percent.  The state had 5393 heating degree days from October to March compared to 5667 normal heating degree days during that period.

Heating oil prices began the most recent heating season 3 to 4 cents higher than the previous two years.  Prices at the end of the 2003/2004 heating season were below prices from a year ago while still considerably higher from prices of two years ago.

This report summarizes the results of the heating oil and propane price survey during the 2003/2004 winter heating season in Nebraska.  The Nebraska Energy Office conducted the survey under a cooperative agreement from the U.S. Department of Energy's Energy Information Administration.

According to the 2000 census, over 10 percent or 68,768 homes in Nebraska use propane as the primary home heating fuel.  More than 8,000 homes in Nebraska, or slightly more than one percent, use heating oil as the primary home heating fuel.  The Nebraska Energy Office recognizes the need for winter fuels price information to fulfill these objectives:  (1) to provide information to the Governor and the public regarding the price and status of winter fuels, (2) to prepare the agency to respond in an effective, efficient manner to potential heating fuel problems, and (3) to improve the state, regional, and national pictures of the winter heating fuel status.

The responsibilities of the Nebraska Energy Office included:

1)  Collection of each Monday's retail heating oil and propane prices from 15 suppliers during
      the winter heating fuel season,
2)  Maintenance of price database,
3)  Weekly submission of the price data via an internet data collection system to the Energy
      Information Administration on a company-identifiable level to the extent permitted by State
      laws, and
4)  Preparation and submission of an annual report.

The responsibilities of the Energy Information Administration included:

1)  Preparation of a list of companies to be surveyed and the development of an estimation formula,
2)  Technical assistance,
3)  Publication of state, regional, and national data online,
4)  Review of annual reports for accuracy and consistency, and
5)  Preparation and distribution of a report to Congress, the states, and the public.

The Nebraska Energy Office has participated in the State Heating Oil and Propane Program (SHOPP) for three years.  Each year, the Energy Information Administration provides the Nebraska Energy Office with a list of companies identified as residential distributors to be contacted regarding their participation in the price survey.  The residential price survey for this heating season began on October 6, 2003, and was completed on March 15, 2004.  Data from the survey was transmitted to the Energy Information Administration using the Internet Data Collection System.  The Energy Information Administration compiled, processed, and aggregated each state's reported data, weighted and stratified against other data streams, to estimate each state's average price.

The Nebraska Energy Office publishes the data in these reports:  Average Residential Propane Prices, Average Wholesale Propane Prices, and Average Heating Oil Prices.  The Energy Information Administration publishes the data in the following reports:  Residential Propane Prices by Region and State, Residential Heating Oil Prices by Region and State, and Wholesale Propane Prices by Region and State.

The average home heating charge price for delivery of No. 2 heating oil, excluding taxes and cash discounts, in Nebraska for the 2003/2004 heating season was $1.14 per gallon.  The season average was only a penny higher than last season's average of $1.13 and 9 cents more than the average three-year price (2001 through 2003) of $1.05 per gallon.

The season averages for the last three years are listed in the following table:

The average home heating charge price for delivery of consumer grade propane, excluding taxes and cash discounts, in Nebraska for the 2003/2004 heating season was $0.97 per gallon.  The season average was 14 cents higher than last season's average of $0.83 and 11 cents more than the average three-year price (2001 through 2003) of $0.86 per gallon.

The season averages for the last three years are listed in the following table:

Sources:  State Heating Oil and Propane Survey and the Weekly Petroleum Status Report.  Energy Information Administration, Office of Oil and Gas, U.S. Department of Energy, Washington, DC.  Nebraska Energy Office, Lincoln, NE.

This report was completed on July 9, 2004.

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