Sunday, March 16, 2008

Natural Gas vs Heating Oil

Every now and then people write to us at EnegyBible.com with questions which strike us as the kind of thing a lot of people might be asking themselves. When that happens we will talk about the question on this blog and add them to our FAQ. Here is the question we got this morning along with our response. We hope you find it informative:


The AFUE ratings indicated a higher efficiency for gas over oil. I am about to replace my boiler. Would switching to gas make sense: economically, environmentally
?


Ric thanks for your message. You are asking a very common question and unfortunately it is not all that easy to answer. You are correct that many natural gas boilers have a higher AFUE rating then some oil boilers. However, it depends somewhat on what kind of oil boiler you are talking about. Some types of oil boilers, particularly condensing oil boilers, have AFUE ratings that are as high as for natural gas boilers. Therefore, in order to make a good decision you have to look at factors such as boiler maintenance and the price of fuel going forward. Most heating and cooling experts we have talked to feel that in general oil boilers require more frequent maintenance than natural gas boilers. We have found that for most homeowners it is very important to have good regular maintenance of their boiler for both efficiency and safety considerations. A properly maintained boiler is less costly in the long run. You might want to consider a boiler maintenance plan if your utility company provides this service, and most do. You can compare service plan costs from your utility company or companies for each type of fuel. If the maintenance costs are similar then this may not be a factor but we have found that in many cases natural gas maintenance plans are less costly.

Boilers last a long time so in our opinion we think the biggest economic difference over time is probably going to end up being the cost of fuel. Therefore in order to judge which is best you are left in the unfortunate position of having to prognosticate the difference in natural gas vs fuel oil prices for the next twenty years. If you were to look at it today the pendulum would swing strongly in favor of natural gas. Fuel oil prices shot up by 97% in 2007 as opposed to natural gas which rose about 11%. As we enter the era of post peak oil we think it is likely both natural gas and fuel oil will continue to increase in price. However, we believe the competition for oil resources will be greater than for natural gas and so it is likely that the proportional increase in fuel oil prices will be greater. This is however a best guess based on limited economic data so please take this observation with a large grain of salt.

From an environmental standpoint frankly both natural oil and fuel oil are bad for the environment. They both take trapped underground carbon and release it into the atmosphere which increases global warming. Both types of fuel add to air pollution and both disrupt the land when we drill for them. All in all when it comes to fuel oil versus natural gas it is a lose-lose proposition.

There are a couple of suggestions we would make since you are considering replacing your boiler. You did not specify whether or not your boiler was for water heating or home space heating. If it is the latter then we would also recommend that you put in a new thermostats at the same time you put in a new boiler. Modern digital thermostats can provide much greater control over how you use heating in your home and are very inexpensive considering the improvement they can make in your energy costs. If you are using the boiler only for hot water heating you might also want to consider going with a solar hot water heater. These types of water heaters have improved dramatically over the last twenty years and are an extremely effective way of reducing your energy costs. In addition they do absolutely no damage to the environment. Most systems cost between $4000 and $7000 and can pay for themselves in just a few years. In addition, many states now provide tax incentives and rebates for solar hot water heaters which can further reduce the cost.


That was our response to our reader's question. Let us know what you think!

38 comments:

SunTaxMan said...

I have been told for many years that heating oil is superior to gas for heating BECAUSE oil has more btu's per gallon than gas.

If this is true (and I am wondering if it is) - how can a gas heating system have a higher rating than oil?

Or is the rating simply a reference to HOW WELL the system is using the fuel, rather than how much heat is being produced by the heating system?

Ted - The Energy Doctor said...

I'll pipe in here because I've been discussing this very issue with my clients a lot this winter.
The amount of BTUs per gallon is largely irrelevant in this comparison because the cost per unit is so much different. Natural gas is also typically sold by volume of the gas, i.e. CCF (hundred cubic feet) or by therm (100,000 BTUs), while oil is always sold by the gallon.

The second question - the rating gives a measure of the combustion efficiency of the system and the delivery of heat under steady state conditions. Unfortunately, most systems are rarely used in that condition. Instead, they turn on when there's a call for heat then turn off, and cool down. So in practice you have to look at much more than AFUE.
See:
http://www.energykinetics.com/afue.html
for a discussion of this problem.

If your goal is to pay the least for a given amount of heat delivered to the home, then, at current prices, natural gas costs half or less than oil or propane. So, if you can get a high efficiency gas boiler, say rated 95% versus a conventional high efficiency oil boiler, say 85%, you're actually paying even less for natural gas.

However, in today's climate, I suggest that my clients bypass the fossil fuel route entirely and get high efficiency heat pumps. There also one unit, the Hallowell All Temperature Heat Pump, that utilizes a unique compressor arrangement that allows it to keep pumping out heat down to 0F. See their website for more info:
http://www.gotohallowell.com/

gas said...

Gas boiler services are available at northern gas heating. Gas boilers have a higher AFUE rating then some oil boilers. Therefore, in order to make a good decision you have to look at factors such as boiler maintenance and the price of fuel going forward.
www.northerngasheating.com/services/servicing.html

Dan Daniel said...

Suntaxman, thanks for your comment. Comparing the efficiency of different fuels is difficult because, as Ted pointed out, the metrics used for each type of fuel are different. In order to make a reasonable comparison you have to look at cost per million btu. If you look in our Bioenergy section under Fuel Cost Chart you will see a chart that compares different types of fuels by cost per btu. When looked at this way you will see that #2 fuel oil costs $24.52 per million btu while natural gas is $14.10 per million btu. So natural gas is much cheaper. In addition, a pellet stove costs only $8.64 per btu which is a third the cost of heating oil.

In addition to this you need to factor in the efficiency rating of your furnace. There are new efficient furnaces for both oil and natural gas that have efficiency ratings in the 90's so if you have a reasonably new furnace the AFUE efficiency rating is far less a factor than the cost of the fuel. I hope this clarifies things and thanks for checking out our blog.

Dan Daniel, Editor energybible.com

mimi said...

I am replacing my boiler, currently i have a oil boiler with underground oil tank. I had a dispute with the oil company where they delivered 500 ton of oil to my house when I am about to switch to gas heating. I paid $1800 for the oil, and not about to waste it. So, I am thinking I should just get a high efficient oil boiler, but based on everyone's comment, in the long term, gas heating will be cheaper, so should i just waste the $1800, and get a gas boiler? BTW, my oil boiler is really old, it's not even going to function properly if i wait for the conversion, and my contractor is at my house doing work on the rest of house, so he said it make sense for me to just switch to gas now.

Compare Insurance Quotes said...

Gas is the way to go these days. A high efficiency gas boiler with a direct vent instant hot water heater is going to get you up to $4500 in tax credits. A tank full of oil can probably be sold and pumped out at an overall loss, but the gain in tax credits and fuel efficiency will more than make up for it. In an extreme fuel emergency gas equipment can be converted to propane.
Compare Insurance Quotes Today

susan said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Susan

http://pay-dayadvance.net

webmaster said...

Hi

These are the days when people are started switching towards the renewable energy resources.These systems are cost effective and eco friend ally.solar heating systems, wind turbines these all are the kind of renewable energy resources through which electricity could be produced.

Wesley said...

I live/manage a 5 story 15 unit walk-up building on Westside of Manhattan. Should I convert to gas or keep #2 oil burner? A contractor told me I should keep the oil burner and just hook up 2 hot water tanks for hot water and turn off the burner on the warm months. What sounds like the best idea? Can anyone shed light on this?

the truth said...

The price of oil vs. gas was always debateable until the past few years. They foung 100 years supply in the U.S. and the cost has plummeted. There is a disconnect of prices now. In my State the price of nat gas is about 1/2 of oil. Then you add in the much lower cost of serviceing and the higher efficiency and you will save lots of money. With oil, you may have to replace the tank for about $1500-2000 but if you switch to gas that cost will never occur.

Jojoba said...

Hey, you stated in a much more direct way what I was trying to communicate, thanks, I will recommend your site to my friends.

Jojoba Oil

JOJOBA INDIA said...

Thank you! I am glad that you appreciated that post and look forward to you and your friends visiting this site often and joining it!
Jojoba India

confused in VA said...

I currently have oil heat in my 55+year old home. It's been nothing but one problem after another. I'm told one problem is that my tank is old and has debris and sediment inside that gets sucked up when the furnace pulls oil from the tank. It constantly clogs the lines and makes me have to have it serviced. I just had the nozzle replaced and then a week later made another service call and was told my heat exchange had completely rusted out (all within that week....amazing!) and that I need a new furnace. I'm tired of messing with the oil furnace and thinking of replacing it with natural gas. Can anyone tell me whether this is an economic move? Will natural gas cost less each winter, will it be more efficient - ie, what are the pros and cons of getting a new OIL furnace vs getting a new NATURAL GAS furnace? Thanks for the input!

Mac said...

Nearly half the households in the northeastern region of the United States use heating oil to provide part or all of their space heating needs.


Heating oil Ipswich

Flogistix said...

I issues in here is very nice. how much it cost to purchase natural gas and how much it cost to purchase heating oil?

Flogistix said...

it is a very nice issue. how much does it cost to purchase a natural gas? and how much does it cost to purchase a heating oil???

natural gas heaters

Moe Satriani said...

I just had a lot of things checked out in my home because I have not done so for a few months. I found out that I need to put in some more furnace oil. Are there different kinds of oils that I need to know about before I buy some? I just can't find the information online. Thank you so much!

lina said...

we must say that our cooling system has to work hard all year long to keep our home or business comfortable. An old and inefficient AC system can significantly increase your utility bills. Our ac service 77006
business is one of them.

Jim Smith said...

Thanks for sharing with us.This provide more useful information for us. I have one of my Furnace Repair Palatine business, i hope you like it.

Miamiairconditioningheatrepair said...

I found this blog to be well informative. Cooling the air is not the only required thing, pulling fresh cool air from outside is very essential too. AC Repair Biscayne Point

Steve Dune said...

gas boilers are just perfect for know days.

heatingontario said...

Nearly half the households in the northeastern region of the United States use heating oil to provide part or all of their space heating needs.

Toronto furnace repair

Allan Mullaly said...

Oil is expensive rather than gas so I prefer to convert oil furnace to gas.

Trinityserviceshvac said...

If you are using the boiler only for hot water heating and also want to consider going with a solar hot water heater. These types of water heaters have improved and are an extremely effective way of reducing your energy costs.
regards
Ac repair New Orleans

france pope said...

Very nice post, thanks for sharing the information. Keep up the good work.

discount heating oil ma

Hunterheatandair said...

Cool sharing, thanks for it:)

AC Service Ardmore

Adela Farina said...

Just desire to say your article is as astounding. The clarity in your post is simply nice and i could assume you are an expert on this subject. Fine with your permission let me to grab your feed to keep updated with forthcoming post. Thanks a million and please keep up the gratifying work. BUt for me solar water heating is the best.

Kaieza Damien said...

Hi there! great stuff, Thanks for sharing a very interesting and informative content, it helps me a lot, keep it up!

heating oil middleton

john wood said...

Natural gas is affordable and as I have a commercial HVAC business and use natural gas just because it is quite affordable and labor cost remain under estimate. For any commercial refrigeration service in NJ, Bergen Refrigeration is quite good.

Heating Ontario said...

There are several actions or ways to conserve electricity related to heating and cooling in your home that can also have a positive effect on your electricity bills. Using a programmable thermostat is one of the best ways how to save electricity and energy overall.

Air Conditioning Contractor Thornhill

demony granger said...

This is very good information a really nice blog. keep it up!!!
discount heating oil ma

Layne Adams said...

Hi, nice post. Well what can I say is that these is an interesting and very informative topic. Thanks for sharing your ideas, its not just entertaining but also gives your reader knowledge. Good blogs style too, Cheers!
heating oil malden

John Cena said...

Nearly half of households in the Northeast region of the United States use oil, some or all of their needs for space heating.. Thank you dear good job. Goodman Furnace Toronto

Peter Thomos said...

I'm very thankful to the author for posting such an amazing development post. Continuing to the post. Thanks.
Gas Boilers Home Heating

alex john said...

Awesome blog and great info you shared here... Best Furnaces

lola davis said...

Thanks for sharing! This page was very informative and I enjoyed it. heating oil Salem

elixavan said...

Its nice posting High Efficiency Gas Furnace

steve job said...

Really..!!! Gas Boiler Service
is the best to make a good decision and also you have to look at factors such as boiler maintenance and the price of fuel going forward....
Thanks for sharing....!!!