With the “Fracking Effect” of plentiful, relatively inexpensive natural gas (and oil) upon us, there is a continuing heating system conversion trend from oil, and justifiable in degree. However, this rush borders as all rushes do on becoming foolhardy. In the New England Region our magic number has been a $45-48 per barrel crude oil price, but it’s at best a “crude” one (please excuse the pun). We have seen a significant gas vs. oil crossover now in the past three (2016, 2017 & 2018) heating seasons. (Ref. our Heating Blogs.) It’s an easy sale to “play the numbers”, telling the customer what they want to hear. The typical scenario is an immediate “boiler swap” with perhaps a less than ideal economic resultant. But there are alternatives, depending upon your particular circumstance.
If you are fortunate to have immediate, metered access to natural gas and your existing oil-fired system is “old enough to vote”, the choice is obvious — swap it! However if you have a newer oil system and it performs well except for the fuel bill, you have other options. Similarly, if you live in a non-natural gas area and are using propane, your incentive differs very substantially.
Let us review these potential scenarios.
Firstly, we must qualify your natural gas source AND it’s actual, delivered cost to you! It is a “distributed” fuel, like electricity and therefore has multiple service charges assessed. Always get an actual billing estimate as with any distributed fuel.
Please refer to our additional, related Blogs from our site library for more detail. We will hyperlink as we proceed, but not necessarily all of them.
The Installed Cost Premium of a Gas vs. Oil System must be considered and factored into any scenario. Gas systems are at minimum a 20% premium in our experience AND their life expectancy can be half or less of a cast-iron boiler system! Our blog “HIGH MASS vs. LOW MASS BOILERS – The Arguments”should be required reading in this regard.
Recommendation: If you do not have natural gas access currently in the building, solicit and qualify its installed cost before further consideration!
- If it’s on your street the line extension may (or may not) be free as an incentive by your provider.
- If it’s down the street a ways there likely is a significant service extension cost up front. There may also be group incentives to extend and supply a neighborhood. This cost must be amortized over some service period. “Run the numbers.”
- Natural Gas (like Electricity) is a Distributed Fuel. As you know on your Electric Bill, the Kilowatt-Hour cost is burdened with service and distribution charges. Natural Gas is the same. Always solicit an ESTIMATED TOTAL GAS BILL from your provider!
Read our blog “USING A ‘HEATING COST CALCULATOR’ — CAREFULLY!“….. For more detail.
NOTE: We harp on using a “Heating Cost Calculator” for any project. “Gotta know where you are before you know where you’re goin’.”
Another suggested “read” is our blog: HEATING FUEL SELECTION – FROM AN ENGINEER’S PERSPECTIVE
Natural Gas (and Propane) Boilers (FHW) and Furnaces (FHA) are available in very different flavors, technically and efficiency-wise. The EPA assigned AFUE (Annual Fuel Utilization Efficiency) Rating can vary from the minimum required value of 85% to over 97% on Weil-McLain Products as an example. AFUE Rating must be obviously considered when making any system decision.
Scenario 1: Older Oil Boiler (15 years or more), NatGas available on site, longer planned occupancy/ownership. Justify and replace with the highest efficiency unit available (Oil or NatGas) and enjoy the benefits. Note the substantial fuel cost premium of LP (Liquid Propane) vs. Oil if this is your only option ….. see also further below.
Scenario 2: Newer Oil Boiler (under 10 years?), otherwise same as Scenario 1. Consider upgrading with a Gun Burner alone. Yes, there are several manufacturers of very high efficiency Gas Conversion Gun Burners. Among them:
- Carlin Combustion Technology.
- Wayne Combustion Systems Several Options.
- Midco International Residential Series.
- Additional Domestic and Foreign Suppliers.
However, you must make an objective judgment as to the viability of this conversion. As an example the Weil-McLain Gold Series Oil Boiler has been around since 1995, still available and produced in quantity. It is an older “two-pass” design, 85% efficiency, with tight heat exchanger passages. A good candidate as are similar competitors’ models.
A Gas Conversion Gun will be higher in combustion efficiency (up to 95%+?). Combined with the oil boiler that is efficiency-limited by oil’s chemical composition should provide you with very respectable boiler performance. We have no means of estimating this, but certainly the Gas Gun Manufacturer should have some history as a marketing tool. Ask!
To expand our point, we regularly scour Craigslist for Cast-Iron Weil-McLain Gold Series Oil FHW and Steam Boilers as budget upgrades in our area (NH). We can save several thousand dollars by obtaining a well cared for unit for sometimes just above scrap value. Haven’t bought a lemon yet!
Read our Blog: BUYING A USED BOILER? – CAVEAT EMPTOR (BUYER BEWARE)!
Scenario 3: What about a LP (Propane) Conversion? The Fuel Cost Premium in our view has relegated propane to a “fuel of choice”. As of this writing, Propane is a 42 to 91% premium over #2 Fuel Oil regionally, using 95% and 87% Appliance Efficiencies (AFUE) respectively as a comparative. Otherwise the outlines in the prior Scenarios apply.
Subsequently propane is primarily used for cooking, drying and seasonal or supplemental heating along with a wood, pellet or coal system in our rural area. Propane heated properties are therefore slower and lower sellers.
There is however some relief that may be available to the propane user. Gas tanks are typically owned by the fuel dealer, locking the customer into his supplier. Conversely, oil tanks that are owned by the customer provide sourcing negotiation flexibility. Our customers advise substantial fuel purchase savings via direct negotiation. “Fuel Club” membership is another very desirable purchasing option that we personally employ.
Commercial and particularly industrial propane clients typically own their storage tanks and contract with suppliers. There is no reason not to own your own tank, save two reservations:
- The initial cost of the tank and its installation.
- The manufacturing date stamping of the tank, the subsequent re-testing and re-qualification requirements. Tanks are date stamped (Mo.-Yr.) and must be re-qualified ten (10-12?) years after manufacture. (If you buy a used tank, check the date stamp! Don’t buy a dying or at worst a dead horse.)
We have a local tank-owner client who advised us of a recent propane buy at an astounding price! He shopped aggressively and paid C.O.D. His purchase price was well below that of the fuel oil equivalent at the time.
So, you off-the-pipeline propane gas users may have some hopes yet. Check them out.
In closing, propane has historically been a premium-costed fuel. Having said this, it is conceivable that we may see a variant of natural gas emerge as a pressurized or liquefied fuel to challenge propane in the future. Stay tuned …
Update: Read our Blog entitled “Oil Again The Cheap Heat in NH — For The Smart Buyer”. It documents the lower cost of oil vs. all other heating fuels @ a $32 a barrel this past winter. The approximate “break even point” with Natural Gas is currently around $45-48 a barrel. Fluctuations of both fuels (and others) should be qualified with a Current Heating Fuel Price Comparator, as we have noted in our Blog.
Also reference our Delta-T ECM Hydronic (FHW) Heating Appliance™, bridging the Gas vs. Oil Heating Argument by applying the latest hydronic technology.
Author’s Note: Updated 01/11/2019 P.D.M., Sr.