• Tag Archives Cost
  • OIL AGAIN THE “CHEAP HEAT” IN NH — FOR THE SMART BUYER

    When our family entered the NH Oil Heat Service Market 60 years ago, #2 Heating Oil was $0.135 a gallon! It had replaced virtually all other fuels despite poor heating equipment in un-insulated buildings. In these succeeding years we participated in the evolution of heating appliances and fuel preferences. All the while we have witnessed technical development being compromised by economic and regulatory policies. Fortunately recent developments in fuel extraction have overtaken market manipulation and put things back into perspective.

    Referencing our prior Heating Blog entitled “Heating Fuel Selection — From An Engineer’s Perspective” will provide a base to qualify our further arguments. Briefly, physical characteristics of heating fuels, in particular “energy density”, physical state (gas, liquid or solid), processing & handling characteristics predetermine their viability and effectiveness. Understanding fuel properties will guide you into what we can now refer to as “The Perfect Storm” that has developed in our region, and may be applicable in others as well.

    Understanding the difference between “distributed” and “delivered” fuels is paramount. Simply, a distributed fuel is piped or wired to your building (electricity, natural or city gas) while a delivered fuel is physically dropped at your location (coal, oil, propane, wood, etc.). Distributed fuels are typically single-source provided while delivered fuels are openly competitive. Heating oil is the highest energy density liquid fuel within a competitive and somewhat volatile market (until recently) and thus presents the “smart buying” opportunity. We will demonstrate that #2 Heating Oil far surpasses ALL other heating fuels when properly sourced. Yes, including Natural Gas.

    Whether its gasoline, diesel or heating oil there are many participants in the petroleum fuel products market and competition is keen. Note the number of heating oil companies represented in your area. They are like the varied gasoline stations, but on wheels. The only visible difference can be the size of a particular fuel company and its operating area, but the fuel distribution market is changing, and rapidly.

    NOTE: As a matter of policy we do not reveal specific identities of our sources, organizations and participants.

    Here in Northern New England we have an expanding presence of a Canadian-based “vertically-integrated” Refiner/Distributor. Their combined advantages of excess refinery capacity, direct transport & distribution, a weakening Canadian Dollar and lowering feed-stock pricing makes them a formidable competitor indeed. Although we have not researched it, similar current or potential situations could exist in the Mid-Canada-US Region as well.

    As an individual user in a prolific supplier market you have little buying leverage excepting to “gang up” as Buying Clubs, Co-Ops, etc. and purchase aggressively. Only in so doing can you move into the ‘Big Boys Club” and attain “rack pricing” as it is referred. The buying groups are out there, but they vary in scope and effect. Do your homework well, in particular to the terms of affiliation with both they and their subscribing suppliers. Making the leap from “Good Old Joe” my local oil dealer who has “kept me warm” (at a price) can be a daunting one to an unknowing consumer, so let’s put some numbers together to make things more exciting.

    We use the NH-OEP Fuel Prices Page, published weekly and loaded into the NH Climate Audit Calculator (typically updated monthly) as the basis of our comparison. Loading our daily Co-Op #2 Heating Oil Price we obtain the “Price per Million BTU”, then adjust all the other Fuel Unit Costs to equate. To obtain an “apples-to-apples” comparison we use the average of latest generation heating appliance efficiency (AFUE) for oil & gas as 87% and 95% respectively. The resultant Fuel Unit Costs are the equivalents to oil-generated heating energy. The “distributed fuels” (gas & electricity) must be factored to your total bill for actual fuel cost + distribution/services.

    Fuel TypeFuel Unit CostUnit of MeasureHeating Unit EfficiencyPrice per Million BTUBilled Cost MultiplierFinal Fuel Unit Cost
    Coal215Ton7910.92
    Fuel Oil (#2)1.3186Gallon8710.93
    Natural Gas1.038Therm9510.931.3 (Estimated)0.7984
    Propane0.948Gallon9510.93
    Wood126.70Cord5810.93
    Electricity0.036kWh9910.921.85 (Estimated)0.01946
    Wood Pellets144.30Ton8010.93
    Kerosene1.15Gallon7810.92
    Geothermal0.102kWh27510.921.85 (Estimated)0.0551

    Go to the NH Climate Audit Calculator and substitute your own values for fuel cost, efficiency, multiplier (where applicable) to ascertain your personal numbers. Only if we substitute our statewide fuel oil average cost which appears to be affected by “pre-buys” can we even approach a par with natural gas. My how times are changing!

    Looking forward it bares noting that the appliance efficiency differential between oil & gas seems to be closing as well. Selective gas appliance manufacturers are claiming AFUE’s of up to 97% while “oilers” are nearing 90%. While gas is nearing its zenith oil has a ways to go. We are watching recent advances in higher temperature combustion oil burners and initial results with cleaner “Bio-Heat Fuel” as examples. We will advise as worthy.

    Our personal soon-to-be-published efforts applying Delta-T Hydronic Distribution will benefit ALL heating systems. To quote JFK, “a rising tide lifts all boats”. The sailing ahead should be smoother …..


  • COAL, THAT POLITICALLY INCORRECT, OTHER HEATING FUEL

    Coal is our most plentiful yet most maligned source of energy. Generating the majority of our electrical power and fueling heavy industry, it has projected the United States from an agricultural to the predominant industrial society in less than a century. But with the EPA’s focus and regulatory squeeze, it has become the convenient “dog to kick”.

    However, the dog and the coal industry are not beaten yet. Witness the shift to exporting our coal to Eastern Europe, the Far East and resurgence of coal “parlor heaters’ supported by bagged fuel. This is not all, however. Economics Rule!

    We have recently through a series of coincidences come to acquaint a fellow tradesman whose specialty is automatic coal-fired hydronic (FHW) systems. His niche is larger, energy-intensive applications such as greenhouses, up-scale housing and “expansion mansions”. (The latter is a regional term denoting seasonal homes that are inordinately expanded and upgraded.) Greenhouses are typically gas, oil or wood heated at significant expense in an effort to survive economically. Upscale housing and “expansion” owners are motivated by pure economics in substituting or augmenting their heating system requirements. Again the latter is where we cross paths.

    Our market effort is providing a Premium, Optimized, and Packaged American Gas or Oil Hydronic Boiler System, ready to “plug & play”. We can also supply our systems pre-piped to interface with a coal/wood boiler as a fully integrated system. There is therefore in our view a very complimentary pairing of coal and wood boilers with gas or oil powered hydronic distribution systems.

    As a solid fuel system a coal fire must be maintained continuously while being modulated (adjusted) to suit heating demands. You don’t just turn a coal fire on and off with a switch, as with gas or oil powered burners. Thus you must utilize or dissipate the minimum fire energy, or let it extinguish. This relegates automatic stoker-fed coal systems to being effectively a heating-season-only appliance.

    The complimentary match is an integrated gas or oil burner boiler to provide the minimal heat and domestic hot water (DHW) requirements off the coal cycle. Thus is our affiliation with our coal systems guy. Whether it’s integrating an existing powered system with coal as previous or providing an overall solution, coal (or wood) systems can be very complimentary indeed.

    The surprise has been the economics of coal as a residential heating fuel, if you work around its physical attributes and distribution challenges. Idealizing its use can make coal more economical than even a sophisticated natural gas system. We have ‘run the numbers’ to our amazement! Let us elaborate.

    First, coal pricing is not necessarily a distribution determined commodity. You would not recognize this as a parlor stove, bagged coal user, but as a central heating system fuel you enter the bulk product market. Now you have options, similar in some regards to the cordwood vs. wood pellets scenario, with one notable exception ….. energy density.

    Coal has a moderately high energy density in comparison to wood for instance, being a necessarily granulated product for automatic stoker-fed coal FHW boiler systems. You can easily handle and pack a lot of it into a storage space. So the key is to ultimately source and deliver the product from its source location in bulk.

    There are two (2) means available, truck or train, or a combination of both. Your strategy is therefore predicated by your point-of-use transport and/or transfer site availabilities. Ultimately your option(s) will be driven by the nearest raw material source. In our case (North Central New England) we have no railhead or ‘coal shed’ facilities (truck under coal hopper car drop site). So we source typically from N.E. Pennsylvania. The ‘coal shed’ is likely the most efficient transit-transfer method, dictated by capacities:

    1. A coal train hopper car has a capacity of well over 100 tons.
    2. A tractor-trailer can legally haul about 22 tons maximum.
    3. A dump truck (for local drop) will vary depending upon its GVW.

    Now you must do the math, based upon your specific annual requirements, individual handling and available storage. Obviously you must work upwards from your system active hopper charge size, considering your refill frequency, etc. to optimize your pattern.

    Your opportunity is to move your fuel from the mine(?) yard at about $100+/- a ton to yours with minimum transit & handling cost. The local scenario is employing an independent Pennsylvania Semi-Trucker who delivers his 22-ton load here, and then back-hauls a bulk load home. This can be wood by-products, aggregates, scrap metal or whatever from this area. Obviously planning and scheduling are in order, and the resultant is a $250 per ton or less delivered cost.

    At $250 a ton or less coal trumps even natural gas (available or not) heating costs utilizing a 95% efficient Condensing Gas Boiler! This is in contrast to a $350+/- per ton cost of buying bagged coal from the local stove shop as a convenience (and handling it).

    The advantage as we see it of an integrated coal-oil or coal-LP (Propane) system is having your energy storage all on-site, and with a generator backup being totally unaffected by both electric outages and heating energy cost fluctuations.

    We must necessarily defer to the coal guy for technical and operational details. Our interest is solely to inform the consumer of all his options while noting our potential technical contribution to heating system integration and performance.

    Well, almost the only reason. Permit me a reflection.

    As a child at the end of WWII I vividly recollect our home being steam-heated with 11 cords of wood annually, and being cold in the process. Not to mention taking away cord wood from a whistling, open saw inches away from your hands and stacking it, seemingly forever. My Dad and a one-armed Uncle operated his saw, the same one that had taken his arm several years earlier. My Dad had had enough.

    We converted to an automatic coal stoker system with a large bin. Recall several nights being shaken out of sleep in a cold house to help my father fix the boiler. My task was to hurriedly dig to the bottom of the coal bin with my hands and remove a piece of chunk coal mixed into the bin that had stuck and sheared the auger feed pin. Meanwhile my Dad built a new fire and replaced the shear pin after my dislodging the chunk. Washing off all that coal dust with Lifebuoy Soap in cold water was the climax, and then hopping back into bed in a hurry.

    Otherwise we always had a nice warm house with radiators hissing that we could back up against, warm ourselves and dry our clothes. Loved that old coal stoker!

    Old, pleasant memories become more vivid as we age, don’t they?


  • USING A ‘HEATING COST CALCULATOR’ — CAREFULLY!

    A ‘Heating Cost Calculator’ is a very useful tool to compare the costs of various heating fuels. They typically convert each fuel into a “cost per million BTU’s’, the accepted industry common denominator. Additionally they usually allow varying input data to suit your particular situation. All well and good.

    For reference please use the following links to follow this discussion:

    Note: These are NH Sites (our locale). Similar ones should be available in your area, or adapt these.

    The NH-OEP Home Page (first link) has a listing of current average fuel pricing in our area, dated and updated typically weekly. You will note these in the right column table on this page. The values are automatically downloaded into the Heating Cost Calculator (second link) in the Fuel Unit Cost column. The Heating Unit (assumed value) Efficiencies are displayed and the net Price per Million BTU displayed. Very nice.

    Now you can ‘play the numbers’, selecting only those fuels of interest and availability, their local costs by solicitation, and applying your current and proposed heating appliance efficiencies. If only it was this easy.

    Unfortunately both of these variables (Fuel Unit Cost and Heating Unit Efficiency) are not so clearly definable as we would assume. Let’s look at each one.

    Fuel Unit Cost is the cost per respective unit of measure for that particular fuel. (A Gallon of Oil, A Cord of Wood, A Ton of Coal, A Therm of Natural Gas, etc.) We assume that it is the cost at your door, in your tank, through your pipe, etc. This is not necessarily so, particularly depending upon the type of fuel.

    We must make a distinction immediately between a ‘DELIVERED FUEL’ and a ‘DISTRIBUTED FUEL’. A ‘Delivered Fuel” is one that is physically transported to your door vs. a ‘Distributed Fuel’ that is ‘piped’ through an external network. Natural Gas and Electricity are ‘Distributed Fuels’, the others are not. So why the distinction?

    Distributed fuels are subject to other charges beyond their ‘unit cost’ and is the prompting for this writing. One of our customers is seasonally forwarding his Natural Gas billing that includes:

    1. The Cost per Therm, the number of Therms and the extended cost. (His ‘Gas Bill’.)
    2. A Minimum Daily Service Charge, regardless of usage.
    3. A significant ‘Distribution Charge’, presumably wear and tear on the pipes(?) (He operates a Weil-McLain Ultra Condensing Gas Boiler and 60 Gallon Indirect Water Heater at 93 to 98% (winter to summer cycles) in an older 3-Bedroom Cape, located in Central NH — about 7,500 Degree-Days, current year.)

    Annualized Monthly Natural Gas Bill Summary: Summer (August) Billing: 55% consumption and 45% ‘other’ charges. Winter (January) Billing: 70% consumption and 30% ‘other’ charges. Estimated Annualized Burden: Approx. 33%

    LESSON: Multiply Quoted Natural Gas ‘Per Therm’ Cost by 1.3 (Winter) or 1.45 (Summer) to reflect the actual seasonal cost per therm!

    SUGGESTION: Get an estimate of annual fuel costs based on projected energy usage from your supplier(s) before commitment.

    DISCLAIMER: We install and maintain Natural Gas, Propane and Oil-Fired Systems and have no personal interest excepting to advise the consumer.

    We have not looked at electricity in this light since we have particularly high electric costs regionally, thus electric resistance heating and heat pumps are not popular in the frozen north. But in it’s case you should back out items like ‘stranded costs’ and the like to get to a true energy efficiency calculation.

    Heating Unit Efficiency is our second variable in the Table and should be entered for your present appliance vs. other options, or if new construction only vs. the various options. How do we do these effectively?

    The new appliance efficiency number is easy. Enter the AFUE (Annual Fuel Utilization Efficiency) percentage stated by the manufacturer. (We presume in selecting powered appliances that you are only opting for ‘Energy Star Rated’ equipment. Link: http://www.energystar.gov/index.cfm?c=heat_cool.pr_hvac)

    What about your present appliance? If it’s fairly new it may have an AFUE value on the Specification Tag or Label. If it’s ‘old enough to vote’, then it’s a different matter.

    Many Heating Servicemen leave a Service Tag that denotes date, service items, notes and an ‘Efficiency’ calculation. You will see Draft, CO2 and Smoke values converted into an ‘Efficiency’. CAUTION! This is a ‘BURNER EFFICIENCY’ value and NOT ‘APPLIANCE EFFICIENCY’ as an AFUE value would reflect.

    To arrive at an Appliance Efficiency for your older system would require converting ‘Exhaust or Stack Temperature’ of the exiting gases and relationships between heat exchanger areas vs. firing rates, etc. This is not the stuff you have available at the Serviceman Level to ascertain the equivalent of an AFUE. These are derived on Test Stands in Laboratories.

    Suffice to say that your Service Tag Efficiency is NOT your Appliance Efficiency. Rule: The higher the exhaust temperature, the poorer the efficiency. As exhaust temps go up, efficiency drops dramatically! We won’t and can’t quote numbers, but look at new appliance specifications and take it from there.

    We trust the enclosed will help you to make better fuel and appliance decisions.

    Last Edit: 5/14/2012 pdm


  • WHAT TO DO WITH THE OLD STEAM HEATING SYSTEM? RUNS WELL, BUT THIRSTY!

    In the 1800’s steam was king! It ran the trains, industries, ships, heated the largest buildings and the finest homes. Steam heating continued in this respect into the early 1900’s to even smaller homes, providing distinctive styling and comfort to the American Lifestyle.

    Those beautiful Victorians, updated Colonials, Southern Manors, Seaside Mansions and latter day Bungalows were all heated by steam as the method of choice. They featured ornate radiation and huge central boilers fired by coal, cotton waste, corncobs, peat moss or wood — and lots of it!

    The age of cheap energy has passed and so seemingly the Age of Steam Heating ….. but not so fast! There is an old adage of “throwing the baby out with the bath water”, cautioning us to not dispose of the good to rid us of the bad. This aptly applies to steam heating in our opinion.

    The simplicity and comfort level of steam heating is unarguable. Those well placed, aesthetic and space efficient radiators emit both heat with a light hiss of escaping steam simultaneously heating AND humidifying our air. Room temperature can be reduced somewhat without a comfort penalty. To duplicate this environment requires mechanical creation using power humidifiers or more complicated HVAC Systems. (That’s also why common homes had a tub of water on the heating stove.)

    Three usage factors affect steam heating:

    1. Fuel efficiency. Those old steamers have heat exchanger passages and flue pipes intended for large, continuous combustion, low temperature fires that are the polar opposites of small passage, high temperature oil or gas fired systems.
    2. Installation or repair cost. Residential steamfitting is one of those fading (and therefore expensive) arts, it seems.
    3. Flexibility. Those big iron pipes don’t stretch or move readily. Extending a system seems formidable.

    Not so fast, again!

    You may have noticed that virtually nothing ever happens to the radiators and piping in your system — the distribution side of things. Yes, a radiator vent may stick so it can’t be adjusted. So you unscrew it (with the steam turned down) and replace it. A valve stem leaks, so you tighten or pack it. Unlike hydronic systems, no gurgling, noisy, tinny registers, circulators, relays or vents to go bad. Steam provides the absolute in physical non-mechanical distribution simplicity, efficiency and durability. This is the “baby” in our analogy.

    The “bath water” is that beast of a boiler — the dinosaur. This is where virtually all of the efficiency gains are to be had (plus a little smart usage). Additionally, this is where the third factor (flexibility) must be introduced and discussed in common.

    A steam boiler is like putting a partially-filled pot of water on the stove with a perforated cover over it to let steam escape in a controlled manner. When you turn on the stove the water rose in temperature until it generated steam. If you don’t need steam the water in the pot is still hot in degree and usable heat. There are therefore two usable components in a steam boiler — hot water and steam. As in past steam systems you can employ the hot water component to provide domestic hot water and additional forced hot water zone heating. So if you want to stretch your steam system to heat the garage or that added room, it’s available.

    That big iron hulk down there was designed with complimentary, rather large distribution piping. Hopefully at some point or through your efforts heat loss of the building has been improved. You don’t need the distribution size as a result. This is not necessarily a detriment, however. What is more important is to not under size the replacement boiler and it’s steaming time.

    As you create steam in a boiler, the boiler water level is reduced as steam rises throughout the distribution (pipes & radiators). Steam is condensed in the radiators giving heat, and this condensate (now as hot water) cools, slowly trickling back to the boiler. If you generate a lot of steam rapidly from a too small boiler, the water level drops quickly. The low water indicator feeds a quantity of new water into the boiler by design. Then the eventual returning surge of condensate “floods” the boiler, reducing or limiting its ability to create steam (heat). Make-up water management can be important.

    Worse, in the smaller boiler scenario there is also the danger of overheating the boiler to the extent that thermal shocking can be induced by replacement water, damaging the boiler.

    There are tricks to reduce these scenarios, but there is one guideline that works every time:

    Boiler Weight (Size) and Water Capacity = Performance Efficiency with Longer Boiler Life (Just look at the unit you are replacing.)

    We invite you therefore to compare the weights and capacities of Weil-McLain Steam Boilers with all of its competitors.

    If you are still determined to be rid of the old steam system in entirety, so be it. But save back those radiators. Don’t give your installer an extra payday.