Breaking down the respective costs of various mainstream home energy sources, natural gas will be the cheapest to use in 2007, according to the Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy. The DOE forecast of projected costs of natural gas, heating oil, electric, propane and kerosene energy use was published in the March 21 Federal Register. According to DOE, one million Btus of natural gas will cost an estimated $12.18 this year — while the same amount of electricity will cost families more than twice as much ($31.21) on average. Natural gas will also cost less than heating oil ($16.01), kerosene ($19.48) and propane ($20.47). “These cost savings can add up quickly, especially for home heating and water heating,” said Tom Moskitis, American Gas Association (AGA) managing director of external affairs. “For water heating, an average household using a conventional storage type water heater would save around $220 per year in energy costs by using a natural gas water heater instead of a similar electric unit. That means the natural gas water heater can pay for itself after just a few years — and save a consumer $2,000 in energy costs over the nine-year life of the appliance.” According to AGA analysis of the DOE’s cost projections, the least expensive way to heat a home in 2007 is with a high-efficiency (94%) natural gas furnace. The association said this option will cost consumers an estimated $801 in 2007, compared with $1,930 for the most expensive home-heating option — an electric resistance system (such as electric warm air furnace heating). For the full year 2007, AGA found that an 84%-efficient oil furnace would cost a consumer $946 while a 94%-efficient propane furnace would cost $1,184. An electric 7.7 HSPF heat pump would come the closest to the natural gas option, costing customers $814 in 2007.

Nymex Holdings Inc., parent company of the New York Mercantile Exchange Inc. (Nymex), said last week that it has completed and signed definitive agreements with Optionable Inc. — a provider of natural gas and other energy derivatives brokerage services — and its founding stockholders, to acquire 19% of Optionable. In addition to the 19% stake, Optionable has issued a warrant that would permit Nymex to increase its stake in the company to 40%. The warrant is exercisable for 18 months at an exercise price of $4.30/share. The agreements, which were first announced in lat January (see NGI, Jan. 29), also provide for certain marketing and technology initiatives between the companies. “The closing of this agreement marks an important milestone for Nymex,” said Nymex Chairman Richard Schaeffer. “We are looking forward to working with Optionable as a key contributor to our future expansion in the options markets.” Nymex is entitled to nominate one director to the Optionable board, which has increased in size to five directors from four, and elected Benjamin Chesir, Nymex vice president of new product development, as a director. Optionable CEO Kevin Cassidy said, “The completion of this transaction is a major strategic step for Optionable, allying us closely with the world’s largest exchange for the trading of energy futures and options contracts. I am convinced that our close relationship with Nymex will be an important catalyst in helping drive and accelerate our future growth.”

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