Examples of ENSO-Society Interactions

Relationship of ENSO to Heating Costs in the Eastern United States

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Climate-sensitive decision-makers involved with natural gas purchasing decisions must develop an understanding of the factors, both climatic and non-climatic, that influence their decisions. Each of these factors has a level of uncertainty associated with it and where possible the “level of confidence” associated with the factors should be communicated to the decision-maker. For example, in some years the confidence in a winter temperature forecast may be quite high and the decision-maker should place greater weight on this factor in the decision, whereas in other years, when there is little or no confidence in the seasonal forecast, the non-climate factors (e.g. natural gas supply/storage and price levels) should be weighted more heavily.

During the 1997-98 El Niño a number of U.S. utility decision-makers integrated seasonal climate outlooks into their planning and operational decisions. The use of this information yielded large economic benefits (Changnon, 2000), particularly in the northern tier of states (northern Great Plains through the Midwest and into New England). The forecasted warmer than average winter temperatures (and less snowfall), which verified in most regions (Barnston et al., 1999), decreased natural gas demand and led to record low unit prices. The national savings from reduced heating costs were estimated at $6.7 billion (Changnon, 1999).