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Thursday, September 08, 2005

Energy Dept.: Expect Higher Energy Prices

As Reuters' Tom Doggett reports, top leaders within the Department of Energy are sending out some interesting signals these days.

The U.S. economy will face a tough winter due to high energy prices caused partly by a disruption in oil and natural gas supplies from Hurricane Katrina, U.S. Energy Secretary Sam Bodman warned Thursday.

There is no doubt that this is going to be a very tough winter season for the American economy (and) for American homeowners," Bodman said in an interview on the Fox news channel.

The Energy Information Administration said on Wednesday Americans who warm their homes with natural gas could see their fuel costs jump by as much as 71 percent this winter in some parts of the country.

Residential heating bills for heating oil will increase by 31 percent, and electricity users will see their costs rise by 17 percent, the Energy Department's analytical arm said in its latest monthly energy forecast.
For those who believe that Americans' unhappiness with the cost of energy will go away because of an understanding of the role Katrina has played in boosting prices, think again. If gas prices continue to climb to $3.50-$4.00 per gallon and home heating bills nearly double, a lot of politicians will have some explaining to do come next election season.
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