According to the latest Lundberg Survey of cities in the continental United States, gasoline prices have risen 82 cents since September 2010.  Ouch!  That is a more than 25 percent increase over a six month period.

So what is driving this dramatic increase? Unlike the 2005 crisis, which was driven by damages from Hurricane Katrina, today’s prices are driven by fear.

The reality is that only 3 percent of Libyan oil makes its way to the United States. However according to the US Energy Information Administration (EIA), Libya is #17 on the list of Top World Oil Producers. The United States is currently #3 behind Russia and Saudi Arabia; with Canada at #6.

However, Libya does have the largest proven oil reserves in Africa, and most analysts agree that the country is still under-explored. According to CNN, what most analysts and forecasters are concerned about is the ripple-effect created by disrupting the supply.

“Libya produces a light, high-gravity crude oil that is most in demand by less complex refineries around the world … As this oil becomes unavailable, it forces buyers of crude to substitute crude with similar properties from other oil producers, thereby increasing demand and starting a chain reaction that raises prices of crude and gasoline in the United States.”

While the global economy brings many positive aspects, it is the negative affect a small country can have on our economy is disconcerting. Certainly there is only so much we can do,  but with the energy as one of the engines that runs our economy, we should make sure that its pricing is buffered from things outside of our control. When will our elected officials step to plate on this issue?

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According to estimates from the Energy Information Administration, prices for U.S. home heating oil were up 24 percent in February 2011, compared to a year ago.

With prices expected to continuing rise, homeowners are getting nervous about heating costs for the 2011/12 season and many are exploring the move to woody biomass fueled appliances.

The New York Biomass Alliance estimates that on a per million Btu basis, heating costs in January 2011 for #2 residential heating oil was $24.90 per MMBtu, wood pellets were $14.70 per MMBtu, and cord wood was the least expensive at $8 to $10 per MMBtu. Assuming one needs to pay for the firewood, cord wood is only 70% cheaper than the fossil fuel alternatives.

At today’s fuel prices, the economic argument for biomass energy is strong  — however, others cite that biomass keeps the energy dollars in the local economy rather than sending 75% of those dollars outside of their community or the country. Others are unclear what the next several years will bring with uncertain economic times and rising energy costs creating an ominous situation.

The last time energy prices reached this level, manufacturers like Greenwood Clean Energy, were unable to keep up with demand. We see how the year unfolds — stay-tuned.

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Anyone who has made a trip to the gas pump in the last month has felt the squeeze of rising energy prices. With this increase comes higher demand for wood as a heating fuel. A recent study by the Alliance for Green Heat outlines how states are doing in their effort to balance between heating needs and health concerns.

The  grading criteria were chosen as an indication of a state’s commitment to supporting clean and responsible use of wood heat. These criteria were: outdoor wood boiler regulation, exempt wood stoves sales limits, incentive programs, strict regulations, educational websites, and change-out programs.

While there are limitations to the study, it does provide the best compilation I have seen to date on the ‘state of wood heat’ in the United States.

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The New Hampshire Public Utilities Commission has made some improvements to their Residential Bulk-Fuel Fed Wood-Pellet Central Boilers and Furnaces program to allow more systems to qualify. If you live in the state of New Hampshire and are interested in installing a automated wood pellet boiler (like the Greenwood Denali Series), you may be eligible for a $6000 rebate from utility company.

Basically, a system must now only achieve an 80% efficiency and may also now require  some routine cleaning. In the rebate’s prior version, a unit must have been 85% efficient and self-cleaning. Judging from the limited success of the program, the New Hampshire Public Utilities Commission wants to get some traction with the program.

To qualify, residents of New Hampshire must complete a two step application process. The first is to complete a pre-approval application and the second is to request the rebate. There are only enough monies in the program for 80 to 100 rebates so if you are interested, you should visit the Residential Bulk-Fed Wood-Pellet Central Boilers and Furnace Rebate Program website.

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Anyone contemplating a big home improvement project to make their homes more energy efficient has missed a rather significant window. Beginning January 1st, the federal government slashed the tax credits for energy efficiency home upgrades from 30 percent to 10 percent and reduced the total available credit to $500. For more check out the 2011 Federal Tax Credits for Energy Efficiency.

As a manufacturer, we like to stay on top of these developments and are also interested in how these changes in incentives will change buying behaviors. Suzanne Shelton, a contributor to Fast Company magazine, summarizes the impact as, “approximately one third of the population who made their home more energy efficient would likely not have acted or would not have purchased the more efficient unit if it weren’t for the incentives offered.”

I guess that leaves it to creative marketers, manufacturers and local utilities to create the proper motivation for purchasing greener appliances.

As if filling your car at the gas station isn’t bad enough at $3 per gallon, the former president of Shell Oil, John Hofmeister now with Citizens for Affordable Energy, says in this CBS report that Americans could be paying $5 for a gallon of gasoline by 2012.

Unfortunately, he is not alone, some analysts believe a run to $100 a barrel is inevitable with increased gas prices quickly following. Oil hit a two-year high just before Christmas at $91 per barrel and according to OPIS (Oil Price Information Service), the price is up 13.6% from last December and 76% higher from December 2008. Nearly three years after oil first traded at $100, demand is again rising quickly, with fast-growing nations like China and Russia attempting to satisfy their increased energy needs.

Gas or energy prices at these levels is not a pleasant thought, but I think we all know that imported energy prices are not going to go down. Whether they hit the levels mentioned above is anyone’s guess, but with the market for energy a truly a global phenomenon, the United State lacks some of the influence we have had in the past and we as consumers need need to adjust our behaviors to this reality.

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In a surprise move, two months after putting the regulation on hold, the NY DEC approved stricter regulations for new outdoor wood boilers effective April 15th, 2011.

Like many other northeastern states, New York follows the format of much of the EPA voluntary OWHH standard — this includes: emission performance, wood boiler stack height, approved fuels, and setbacks (from adjacent buildings). In addition there are labeling, consumer education, and reporting requirements for manufacturers and wood furnace dealers.

A unique twist introduced in the regulation is the designation of a residential wood boiler and a commercial wood boiler — with a wood furnace that is rated below 250,000 BTU/hr classified as a residential system. The regulations for commercial systems (> 250,000 BTU/hr) may not be installed for residential use and include greater installation requirements.

It is unclear at this point in time how this commercial aspect of this regulation relates to other existing commercial biomass boiler regulations. However one thing is clear, with the many interested parties on this topic, there will be additional news on New York’s new outdoor wood boiler regulations.

Details of the regulation are available on the DEC website.

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I thought we would break from the norm and share some promising news about the economy. While there is still uncertainty with respect to unemployment (we are still averaging about 9.5 percent here in the US), there is positive movement across a number of economic indicators.

According to the National Retail Federation (NRF), October retail industry sales (which excludes cars, gas stations, and restaurants) increased 0.3 percent seasonally adjusted over September and 2.6 percent unadjusted over last year. Similarly, the October retail sales released last week by the U.S. Commerce Department show total retail sales (which includes non-general merchandise such as autos, gasoline stations and restaurants) increased 1.2 percent seasonally adjusted over September and 5.4 percent unadjusted year-over-year.

Finally, the National Association of Home Builders/Wells Fargo housing market index (a measure of builder confidence) rose in October, for the first time five months, bringing the index back to the same level as June. While still weak, this move was unexpected by most economists.

It has been a while since we have seen positive movement in a consumer confidence. Let’s hope the trend continues!

The New York State Department of Environmental Conservation (DEC) announced yesterday that they have submitted a regulation to the state Environmental Board for consideration at its October 25 meeting that will set stringent performance standards for new outdoor wood boilers (OWBs) sold in New York State. If approved, the regulation would go into effect 30 days after its filing with the state Secretary of State. The stricter guidelines will ensure that new OWBs burn at least 90% cleaner than older models.

The regulation includes restrictions on fuel, stack height, set back and seasonal operation. Details of the proposed ruling may be found at the NY DEC site.

Currently, installed wood boilers that do not comply with the proposed regulation are grandfathered in compliance, but the DEC has proposed a study period to evaluate the impact of requiring their removal.

So, if you live in New York State and stay-tuned or raise your concern — you are running out of time to have your voice heard.

Last month, the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) released the BioEnergy Atlas, a Web portal that provides access to bio-energy analysis and mapping tools. The visualization tools, BioPower and BioFuels Atlas, allow users to view related bio-energy data on a single map. Some of these data include biomass feedstocks, bio-power and biofuels potential, production and distribution.

The site makes the mountains of data collected by the EPA, DOE and USDA accessible and sheds some light on the significant potential of biomass energy in the United States.

The BioEnergy Atlas is accessible here.

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