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Gas pains

class=img_thumbleft>What's the real value of gas? Whatever you're willing to pay for it. That's the line grinning economists were giving at the height of the fall price spike--safe in the knowledge that angry mobs couldn't afford to douse them in gasoline and set them aflame.

Now, a few months after the number "3" made its debut in the lefthand column of local gas station signs, fuel prices have fallen steadily. It appears the "real value" of gas in the weeks after the hurricanes reflected a serious speculative markup. After peaking at $70, crude oil contracts now sit at $55.

According to an article in yesterday's Wall Street Journal, "New York Mercantile Exchange futures--contracts that require the holder to buy or sell crude, natural gas and heating oil at a set price at a future date--are all down about 20 percent from the records reached this fall." Gasoline futures in particular have dropped 40 percent.

After one of those warm, languid falls that make a man feel like he's taken a hit off a tank of greenhouse gases, Minnesotans may have been hoping for a break on natural gas prices. Keep hoping. Last month, CenterPoint Energy warned Minnesota's residential customers that they could expect to pay 40 percent more than last year. (The company makes a fixed profit, set by the state Public Utilities Commission, whatever happens on the wholesale market.)

It's worth remembering that 2003 was itself an exceptionally costly year for home heating. In fact, the last five years show an ugly trend--a topographical upswing that's bound to make any flatlander uncomfortable.

Listed below is the cost of natural gas, per therm (100,000 British Thermal Units) in each of the past five years, along with the average annual natural gas bill for a local CenterPoint customer.

2001-2002  57 cents/therm   $594 a year 2002-2003  66 cents        $876 2003-2004  74 cents        $907 2004-2005  $1.00        $995 2004-2005  $1.39          $1,400

No data are available on what percentage of residential customers are planning on burning their furniture for warmth.