Everyone knows that it’s a waste of energy to leave the TV on when you leave the room.  But did you know that even if your TV is “off,” it may still be sucking up electricity and running up your power bill?  The culprit in this electrical cat burglary is standby mode–the so-called “power vampire” that is a part of almost every modern electrical appliance.  Standby mode exists to make re-starting appliance quicker and easier, but requires energy to do so.  Switching off your TV with your remote control means you can switch it back on without standing up, but it also means you’re paying precious dollars and cents in electric bills for that convenience.

Televisions, computer monitors, microwaves, DVD players, and cell phone chargers all suck power while not in use.  Studies have shown appliances on standby can account for 10% of one home’s total energy consumption.  The European Commission has estimated that Europeans waste $9 billion a year on standby electricity costs.  A UC Berkeley study showed that standby power can consume up to 26% of a tech-heavy California home’s energy.  The International Energy Agency even estimated that standby power consumption accounts for 1% of the world’s annual greenhouse gas emissions. (Source: WSJ.com)

Image: Associated Press

So the results are in: standby power is bad–it drives energy bills up and contributes to pollution.  So what’s the solution?  The inventors at the Spanish company Good for You, Good for the Planet believe they have it.  They have patented an algorithm that senses when an appliance is in standby mode, and shuts it off completely.  Appliance manufacturers have already shown interest in the product, and a Spanish hotel chain has begun testing a prototype power strip, called “100% Off,” in its guest rooms.  This simple solution could take a huge bite out of worldwide energy waste, and take us one step closer to efficient and green world.

Until the device (or other devices like it) is widely available, try serving as your own “100% Off” mechanism.  When you’re done watching TV, walk up to the set and click the on/off button, so that no lights are on anywhere on the TV.  Unplug your cellphone chargers when you’re not using them.  Shut down your computer instead of leaving it in sleep mode.  This changes may seem insignificant, but try it for a month and then check your electric bill.  You may be pleasantly surprised at the results.

At HEAT USA, a common question we receive from members and non-members alike is, “What’s the price of heating oil today?” As we always explain, the price of heating oil depends where you live, who your supplier is, whether or not you are a member of HEAT, and many other big-picture factors. What are those factors, and how do they lead to higher or lower retail prices for heating oil? It is a simple question with a complicated answer. We at HEAT This Week try to provide simple and straightforward explanations for why the price for a gallon of heating oil changes so rapidly. We have compiled a list of three factors that influence the price of heating oil in an attempt to help consumers understand how they could pay $2.90 a gallon one day and $3.10 the next.

Crude Oil. Also known as petroleum, crude oil is the main ingredient in heating oil (also know as number 2 fuel oil), as well as kerosene, jet fuel, and gasoline. Petroleum is also used to manufacture other essential materials, including lubricating oils, plastics, and asphalt. With so many uses, it’s no wonder that crude oil is the fuel of the world economy. Add the fact that crude oil is increasingly difficult to get out of the ground to consistently high demand for the product, and you’ve got one hot commodity! Crude oil is the most sought-after commodity on the New York Mercantile Exchange (NYMEX), and often affects the price of other commodities. So if the demand for crude oil suddenly increases because Americans start driving more or China purchases 100 new airplanes, the price increases. Generally, as goes the price of crude, so follows the price of heating oil.

Worldwide energy supply and demand. Since crude oil is a crucial part of nearly every energy source on the planet, its market price is very closely tied to the global market’s demand for energy. As explained in the October 17 edition of HEAT This Week (“The Stock Market, Heating Oil, and You”), the current economic slowdown affecting economies around the world has weighed down demand for energy everywhere. Americans are driving less and Chinese factories are manufacturing less, putting crude oil in low demand. When the stock market begins to perform more strongly (which some experts say will happen soon), it will be a signal of the global slowdown ending and energy demand returning. At that point, demand for crude oil will surge, lifting its market price and, in turn, lifting the price of heating oil as well.

Profit margins. As with every other good that is bought and sold, petroleum passes through many hands before it arrives at your home as heating oil.

Huge multinational corporations extract crude oil from the ground and ship it to refineries they own nearby to make heating oil. The heating oil is then shipped to local distribution centers called “racks.” At the racks, the heating oil is sold to local retailers, who fill up their tanker trucks and then deliver the oil to homeowners. The two transfers of ownership (multinational producers to retailers and retailers to consumers) include taking of profit from the sale of the oil. If the market value of heating oil is $2 a gallon on the day the retailer buys from the producer, the producer might charge $2.15 a gallon in order to make a profit. The retailer then adds on his own profit margin to the price he charges the consumer, making the retail price $2.50 a gallon. Profit margins are an important part of capitalism, so long as they are fair and justified by market forces. However, heating oil producers and retailers sometimes take advantage of customers and raise the price of the oil to prices that are disproportionate to the market value.

For example, heating oil retailers may raise their profit margins on heating oil during the winter, because they know consumers are more willing to pay higher prices when it’s cold outside. So in the winter, retailers often raise their prices, even if the market price for heating oil is going down. This allows retailers to maximize their profits during heating season so that they may continue to do business when demand is extremely low during the spring and summer. Retailers will argue that this is a fair practice, but some view it as exploiting heating oil consumers.

This tendency of retailers to maximize their profit margins led heating oil collectives like HEAT USA to provide price protection to their members, which compels retailers to agree to a specific number of cents per gallon in profit.

The three factors above are the basic forces that affect the price you pay for heating oil from the moment crude oil is pumped out of the ground to the moment the delivery truck fills up your tank. Crude oil availability and market price, worldwide demand for energy, and profit margins taken along the supply chain are all determined by hundreds of secondary factors that change every day, making the price for a gallon of heating oil change every day as well. With so many interrelated forces guiding the price of heating oil, along with the global economy’s first major crisis of this century, heating oil prices will continue to swing up and down. And whether the trend of the day or week is low or high, flat or sharp, the only thing heating oil consumers can surely bet on is uncertainty.

This article first appeared in the November 7, 2008 edition of the HEAT This Week email newsletter

The International Energy Agency (IEA) released a report yesterday that predicted that crude oil prices would soon return to triple-digit levels. Although the IEA did not specify how quickly the price increases would occur, it predicted that the price for a barrel of crude would average $100 from 2008 to 2015, and $200 from 2008 to 2030 (source: The Wall Street Journal).

Although historically-low demand for oil associated with the global economic slowdown has driven prices down in recent months, the IEA predicted that when demand eventually returned, supply would be extremely slow to catch up. According to the report, an average of $350 billion a year in oil investment would be required to keep pace with demand through 2030. That would be a lofty goal, especially considering the dampening effect low prices are currently having on oil investments around the world. One example appeared yesterday in The Economist: to exploit the presumably massive oil reserves in the tar sands of Canada, the price of oil would have to be at least $90 a barrel to make the difficult extraction of the oil financially worth while to oil companies. Plans to begin excavating the oil sands have been put on hold until prices rebound. Furthermore, the extensive investment needed to boost worldwide oil production is made more difficult by the lack of available credit as part of the economic downturn. The combined effects of low oil prices and tight credit make the increasing of oil production by the necessary level (estimated by the IEA) of 64 million barrels a day in order to meet 2030 demand levels extremely difficult.

The only solution, as outlined by the report and quoted in the New York Times, is making major changes to worldwide consumption patterns: “‘Current global trends in energy supply and consumption are patently unsustainable — environmentally, economically, and socially,’ the energy agency said. ‘But that can — and must — be altered.’”