In the weeks after Hurricane Katrina ravaged the Gulf Coast and its oil infrastructure, gas prices have been soaring to unprecedented heights.
And for Penn, that increase could cost millions of dollars.
Officials estimate that rising oil and natural-gas prices will cost the University almost $7 million extra this coming year, Vice President for Budget and Management Analysis Bonnie Gibson said.
And because no alternative energy sources are viable in the near future, that money will have to come from Penn's existing budget.
The Gulf Coast region -- the area directly hit by Hurricane Katrina -- is responsible for 47 percent of U.S. oil refining, and 19 percent of the nation's natural gas comes from the area. Storm damage has shut in about 60 percent of the region's oil and 40 percent of its natural gas.
After Katrina, prices are skyrocketing. The U.S. Energy Information Administration projected that natural-gas costs could increase by 47 percent nationwide for the coming winter.
And since hundreds of Penn's services are dependent on oil and natural gas, this will likely mean huge costs for Penn.
The University uses steam power to heat almost every building on campus. The energy for the system comes from natural gas.
Because of post-Katrina price increases, the University is expecting to pay almost 20 percent more to heat its buildings in the coming year, said Abhilasha Prasad, the associate vice president for business administration in Facilities and Real Estate Services.
Because Penn spends more than $32 million annually on steam power, a 20 percent cost increase will result in an additional $6.4 million spent.
"There's been a run-up in the fuel market since 2000," said Kevin Brown, a spokesman for Trigen-Philadelphia Energy Corporation, which provides Penn's steam power. "It's been a run-up that has been without precedent."
Another factor worrying University officials is the cost of gasoline, which fuels almost all University vehicles. Gibson said she anticipates gas to cost the University more than $290,000 extra this year.
Penn Transit Services -- University-sponsored bus and van services for the Penn community -- uses 33 gas-dependent vehicles, which could cost an estimated $147,000 to run if gas prices stay at their current elevated rate.
The Division of Public Safety -- which owns 30 police cars and other gas-powered vehicles -- has anticipated an extra $70,000 in gas costs.
The Athletics Department anticipates an additional $50,000 to $75,000 to power buses that transport athletes to games.
But despite these huge price increases, Penn will not actively seek many alternative energy sources for the near future because no financially viable options exist, University officials say.
Almost all buildings in Philadelphia are heated with Trigen steam, and making the switch to another power source would strain the University's operating budget.
But they have been trying to cut back.
"We have been working to control consumption [of steam power] in an aggressive way," Prasad said.
She added that Facilities Services closely monitors the temperature of each building and makes incremental thermostat changes to save money.
But "we can't really cut off the electricity ... without impacting the academic vision of the University," she said.
Instead, each department with significant fuel costs will reorganize its budget to accommodate the rising prices.
"The last resort is to just throw money at the problem," Gibson said. "Our first resort is always to try to be creative."
In many cases, that means cutting funding from other programs.
"It could be that we don't replenish a vehicle in the [Penn Police car] fleet, it could be that we are not able to do a special training," Vice President for Public Safety Maureen Rush said. "To cover this deficit [caused by expensive gas prices], that means we'll have to move things around in other costs."
Rising energy costs
$32 million: Annual cost of steam to heat almost all University buildings
20% : Anticipated price increase of steam as result of rise in natural-gas prices
$6.4 million: Penn's total anticipated heating cost increase
