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Property Managers Advised To Budget for Higher Oil Bills.  


Although everybody is relieved to see that oil prices have dropped from the high of $147 per barrel in July, property managers need to brace themselves for high heating season bills this winter. There are two primary reasons for this: 1. OPEC leaders are working to push prices back up and are expected to succeed; 2. Many property managers arranged fixed deals this past summer with heating oil suppliers and are still paying July prices.

On December 17th, OPEC leaders will join together in Algeria and work to decrease production by anywhere from 1 million to 1.5 million barrels per day. Iran’s OPEC governor, Mohammad Ali Khatibi, stated two weeks ago on state television that talks were also underway to cooperate with crude oil companies outside of OPEC in an effort to reduce the global supply of crude and drive up the price of oil. He stated in the same interview that, OPEC member countries are in a position to cut oil production at this time because they have tremendous cash reserves from this past summer and do not wish to see low oil prices on the market.

This news is little relief to some property managers who are still paying July 2008 prices for oil. As an incentive to attract customers during the summer months, when oil usage is significantly lower, many heating oil companies allowed their customers to sign “lock-in” contracts, which commit to a specific price-point that applies throughout the winter. Unfortunately, this year, those property managers who signed fixed-price deals this past summer are still paying July 2008 prices for heating oil, in some cases $4.20/gallon, instead of $2.64/gallon. In other words, they are paying 37% more than they should be.

In an interview last week with Tom Brokaw, T. Boone Pickens, Jr., well-known energy expert and financier, called for America to embrace a comprehensive energy plan to reduce the dependence on oil. He noted, “If you look back over the history of oil prices, gasoline prices, we’ve yo-yoed at times. In the ‘70s the price went up, and then we had plenty of oil all at once from the Mideast. When we did, the price when down. We put away any ideas of renewables at that point. When we saw oil go to $100 a barrel, all of us realized that we’re in a different world now. And if you think oil’s going to stay down at $50 and $60, I’ll make you a bet that we’ll be back to $100 a year from now.”



The best solution to this issue is to reduce consumption immediately and develop more sustainable energies. What this means for property managers is that they need to budget for high heating season bills this Winter, and they need to make their buildings invulnerable to the bouncing price of oil by making them more energy efficient. For example, an energy management system (EMS) uses both the indoor and the outdoor temperature of the building to cycle the boiler more efficiently, reducing fuel consumption by at least 15% and driving the building to peak operating efficiency. As oil prices increase, buildings that are running efficiently are saving more money and are operating at a lower cost. NYSERDA, the City of New York (J-51) and National Grid offer incentives for making buildings energy efficient by installing an EMS.

For more information on ways to decrease your heating oil usage, visit U.S. Energy Group at www.use-group.com. Demonstrations and estimates can be scheduled by contacting Tom Scali or Steve Guerrero at (718) 380-1004. With 30 years in the industry and in over 3000 buildings, the company offers Internet monitoring and heat-control and personalized customer support. 



Founded in 1978 by CEO Jerry Pindus, U.S. Energy Group is a metro-New York based firm, which develops and integrates energy control, monitoring and analysis systems for large residential properties. With the slogan “Building Efficiency Through Information Management,” the company’s three flagship products include: USE Manager™, an internet-based building management service which provides information to keep buildings running safely and cost-efficiently; USE Controller™ Energy Management System (EMS), which controls and monitors energy and fuel use and provides proven savings of 15%-40% on fuel consumption, while returning investment in less than two years; and USE Verifier®, a patented advanced ultrasonic measurement system which enables building owners and managers to verify the amount of oil they receive, as well as control their inventory and budget. With U.S. Energy Group’s products and services, building owners save money, conserve energy and enhance residents’ comfort. 



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