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About Oregon daily emerald. (Eugene, Or.) 1920-2012 | View Entire Issue (Nov. 1, 2000)
Fuel cost continued from page 1 natural gas. “If you drive up demand, and supply hasn’t increased, prices are going to go up,” Schwartz said. “Gas companies expect it will take two years before increased supply may Gas companies expect it will take two years be fore increased supply may lead to decreased prices. ... Wholesale prices [of natural gas] have doubled since the beginning of the year. We're trying to make customers under stand we're not making money off of the gas on raising the prices. Steve Sechrist spokesman Northwest Natural Gas t t lead to decreased prices.” A strong economy is also a factor in the increased prices. Anytime there is an economic boom, there is an increase in energy use as more businesses expand and houses are built, Schwartz said. Without an in crease in the supply of natural gas, which has been flat for the last few years, the price increase could last as long as two years before prices be gin to decline. Fortunately for most Eugene resi dents, the price hikes will only af fect Oregonians who receive fuel from Northwest Natural Gas. North west Natural Gas—Oregon’s largest natural gas utility company, supply ing 80 percent of the state — in creased prices by 24 percent for the 470,000 accounts it serves. Gas bills will increase by about $60 per year for each account, Northwest Natural Gas spokesman Steve Sechrist said. Eugene Water and Electric Board, a publicly owned utility, will not be increasing its rates. EWEB will keep costs down by using wind power and hydroelec tric power from the Bonneville Dam, which has its rates fixed through October 2001, said John Mitchell, EWEB’s public relations director. “We implemented all rate in creases in April of 2000 — the first increase since 1993 — and will not have a rate increase during 2001,” Mitchell said. “It may affect the [price of the] small amount of power we buy on the open market, but EWEB will absorb that cost and not pass it on to customers. ” Traditionally, utility companies such as Northwest Natural Gas make their incomes in service charges for transporting gas, hook ing up gas in new houses and busi nesses and other services, Sechrist said. Last month’s price hike will be Reasons for increase in natural gas prices: 1. Construction of a new pipeline that carries gas from Canada [one of Oregon’s primary sources] to the Midwest. 2. As the economy booms, business expansion and new residential construction have resulted in a higher use of natural gas and electric resources. 3. Supply has been flat for the last few years and increased use is driving prices up. Percentage price increases of natural energy resources: Natural Gas: 21 percent increase Heating Oil: 40 percent increase Electricity: Little or no change because most publicly owned utilities use hydroelec tric power or other sources that are not expecting rate increases. Source: Conservation Resource division of the Oregon Office of Energy passed on to the customers of utility companies, he said, but the compa nies will not be making any profit from the increase. “'Wholesale prices [of natural gas] have doubled since the beginning of the year,” Sechrist said. “We’re try ing to make customers understand we’re not making money off of the gas on raising the prices. ” Gas prices continued from page 1 prices are even higher because of limited resources, said Oregon Pe troleum Marketers Association Ex ecutive Director Steve O’Toole. “The whole West Coast has higher prices because the Gulf states have more access to oil im ports,” he said. Most of Oregon’s crude oil comes from Alaska and is processed in refineries in Seattle, then sent down pipelines. One pipeline runs through Washington and one runs through Oregon. Ore gon’s line, the Kinder Morgan Line, starts by Vancouver and ends in Eugene. There are no refineries in Ore gon, only storage terminals, mak ing the state dependent on the Seattle refineries, O’Toole said. “If there were more refineries, the production of oil would rise and the cost would go down,” O’ Toole said. “There won’t be any more refineries built, however, due to environmental concerns.” Depending on the four Seattle refineries can cause problems, O’ Toole said. “Our prices are affected if the re fineries have problems,” O’Toole said. “Our market is so vulnerable, anything that affects production can change the price [of oil].” Oregon also has to transport gas south, Bournazian said. With the pipeline stopping in Eugene,Southern Oregon has to get their oil trucked in from either the northern part of the state or from the San Francisco refineries,” Bournazian said. “Getting the gas down there is going to cost more.” The conflict in the Middle East is also affecting prices, said Elliott Eki, AAA Oregon public affairs manager. “Everything depends on what’s happening in the Middle East,” Eki said. “A truce in the Middle East is a positive sign for prices, but from what the media has been showing us, it doesn’t look like that’s going to happen any time soon.” With the recent bombing of the U.S.S. Cole, concern throughout the oil industry increased along with prices. “Conflicts can interfere with the flow of crude oil,” O’Toole said. “Oil went up to about S40 a gallon after the Cole was bombed.” Prices did eventually go back down, but a similar incident in the future could have the same effect, O’Toole said. 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