In Maine, as they contemplate the costs for this coming heating season, pundits are calling it the "Frozen Economy."
With oil prices spiking near $150 a barrel and only dropping this past week because speculators can see first-hand the effects on the economy, people are wondering if this winter’s fuel-oil heating costs will force them to choose between two essentials: food and heat.
In the Northeast, which buys 75 percent of America’s heating oil, the cost has gone from $1 a gallon in 2003 to $5 today. In Minnesota, which is unquestionably the nation’s coldest state, Xcel Energy is predicting heating bills to rise 30 to 50 percent. The same is true across the country. This, at a time when people are struggling between meeting their mortgage payments, feeding their families, and buying gas to get to and from work.
For the poor and the elderly living on Social Security the results may be catastrophic. Another proposed 22-percent cut to the Low Income Home Energy Assistance Program (LIHEAP) this year – after a more than 35-percent cut in 2007-08 – puts these unfortunates in a more precarious position than during the winter of 2003, when rising heating costs and cuts in social service programs led to the deaths of 23 people in Chicago and Philadelphia alone after a single cold snap.
Even though Congress traditionally overrides Bush budget cuts in LIHEAP programs, the heat energy assistance program has never been funded for more than 41 percent of the amount authorized in the Energy Policy Act of 2005, which was $5.1 billion.
In addition to inadequate funding and perennial cuts, the LIHEAP program has income limits ($1064 per month for one) which eliminate many who might otherwise qualify on the basis of simple need. Food stamp limits ($1,107) are higher. If one is making, through Social Security and investments, a meager $1,500 a month, and the heating bill (for 2008-09) is projected to rise 50 percent, this means a month’s worth of heat at $150 will cost another $75, or $225 in all. Maine is only marginally warmer than Minnesota. Even with LIHEAP, the average benefit only covers 8 percent of the total cost for a season’s worth of heat.
According to the Centers for Disease Control, over 1,000 Americans died of hypothermia in their own homes from 1992 to 2002 (the last year for which figures are available). Sixty five percent were elderly. They froze to death in the United States, not because they were caught outside in freak storms, but because they were unable to pay the cost of heating their dwellings, and those were largely mild winters.
We are now in an era of solar minimums and heightened global warming – which also results in dramatic and sporadic regional cooling, as witnessed during this past winter. According to the National Oceanic and Atmospheric Administration’s (NOAA) National Climatic Data Center, the average temperature across the contiguous United States during the past winter (December 2007-February 2008) was the coldest since 2001. The cause is likely ocean currents (and therefore winds) cooled by melting poles and glaciers.
Thanks to Bush budget cuts for everything but war, expect the winter of 2008-09 to go down in history as the Winter of the Popsicle Poor. It is a terrible legacy, and an historical footnote on the order of Zimbabwe, that the richest nation on earth cannot keep its poor and old safe and well, even in that simplest of necessities – heat in the home.
Disclosure: I don’t own Xcel Energy or any energy company stock.