• Tag Archives Fuel Co-Op

    The assumption is that natural gas heating is historically cheaper than fuel oil, witnessed by the continuing conversion rate of oil to gas. The arguments forwarded are several, most notably that “natural gas (and propane) burn cleaner”, are “less expensive” than oil and therefore “more efficient”. All of these points are true in some context, but what is excluded has become significant to the discussion. Namely, heating system efficiencies and fuel cost differentials are narrowing the gap. Exactly how and by how much are the issues.

    An old New England adage comes to mind: “You can either raise the roof or lower the floor” to gain more space. Applied to heating you increase the efficiency of your appliance or lower the cost of your fuel ….. or do both, as we will contend.

    First, let’s begin by “raising the roof” of heating energy creation efficiency. Here again, hydronic (hot water) boiler efficiencies have increased significantly with AFUE Rating increases of over 10% for gases and half or less that for fuel oil. Good numbers at present are 95% AFUE for gas and 87% AFUE for oil “top end” appliances. More specifically these are Condensing Gas and Triple-Pass Oil Boilers. Now let’s get in a little deeper.

    There are three basic elements in any hydronic heating system:

    1. Heating water (a boiler),
    2. Moving heated water (distribution), then
    3. Heating the environment (radiation).

    The contemporary presumption is that the Boiler DOE %AFUE Rating defines heating system efficiency. This is patently untrue on its face. Distribution and radiation efficiencies must be considered to determine an aggregate value. Radiation by type and deployment also affect distribution configuration and complexity. The ensuing “middle ground” between the boiler and radiation we cynically denote as “The Plumber’s Playground”. Herein appears a relative maze of pipes, fittings, circulators, controls and wiring connecting A to B with artistic “free expression”. Thus that new, “pretty piped”, complex heating system despite saving some fuel is an electrical energy hog and a serviceman’s “friend”.

    A hundred years ago we had the Gravity Hot Water Heating System. It was utterly simple, had no moving parts and was operated by manually regulating a fire under the boiler. Powered coal stokers, oil or gas burners were later added with a room thermostat for automatic heating. It was abandoned upon introduction of the hot water circulator and zone valves for installation and operational flexibility and remains with improvements to date. However the natural (gravity) convection attributes of yore are present in degree within “modern” hydronic systems and necessarily controlled with valving.

    Recent introduction of the Delta-T ECM Hydronic Circulator prompted and enabled us to effectively recreate a Neo-Gravity Hydronic Heating Appliance. Functionally it is akin to “putting an ‘Automatic Transmission’ on a Boiler”. Hydronic distribution energy is typically reduced by over 90% of contemporaries. Convective flow is finitely controlled by the Delta-T ECM Circulator like “paddling a canoe with the current” ….. virtually effortless! Coupling to a high-mass, cast-iron boiler to reduce burner cycling and system operating temperature increases boiler AFUE substantially, depending upon the site radiation and heating demands. These claims are substantiated within our U.S.P.T.O. Patent Submission, now affirmed by a recent Notice of Allowance. Canada to follow. Check out our website www.BoilersOnDemand.com for details.

    So, first upgrade your aging, less efficient boiler to a post-modern, high-mass, delta-t ecm distribution appliance, such as ours.

    Second, let’s “lower the floor” by changing your fuel oil buying habits! The “dirty little secret” is that you have options, many options. You don’t just keep buying from “Good Old Joe” because he’s nice and “takes good care of me”. Or pick an oil dealer out of the phone book, your neighbor recommends, or whatever. Not unlike automobile “gas station hopping” the oil dealers have a back door pricing system too, called Consumer Fuel Oil Co-Operatives. They typically aggregate fuel demands of their memberships and solicit seasonal quotations for heating fuel. To give a comparison, we and our participating customers have realized a 25 to 40% reduction over retail pricing in our area (S.W.N.H.) throughout this 2019-2020 Heating Season, for a $25 Annual Fee! Smarten up folks!

    Now, let’s dispel the notion that natural gas fuel is cheaper than oil, using our one-two strategy as detailed above.

    All heating fuels are rated by their “Cost Per Million BTU” as displayed in the NH Climate Audit Heating Cost Calculator, our personal choice of many available. We have used this calculator continuously since 2016 during our appliance development. In all but one winter cycle oil has been a cheaper heating fuel than natural gas. Oil has also eclipsed all other fuels listed for the past two years. This apparent natural gas discrepancy with oil must be first be explained.

    Natural gas and electricity are “distributed” fuels, i.e. they are necessarily delivered through pipes or wires to the point of use. Distribution and service charges are necessarily applied to these fuels, regulated by a State Utilities Commission. Therefore your actual bill is fuel cost plus delivery charges. Dividing the fuel cost into your total bill defines your Service Burden, expressed as multiplier of 1.x to 2.x. Our local multiplier is typically just over 2 at present. Therefore the Natural Gas Cost Per Million BTU must be multiplied by your Service Burden to obtain your true fuel cost.

    Oil and LP (Propane) on the other hand are liquid “delivered” fuels. You pay upon delivery and they are dropped into your oil or gas tank or as gas bottles in your yard. Similarly with the solid fuels: coal, wood & wood pellets. No additional charges apply. This distinction is very important.

    Playing with the Heating Cost Calculator, let’s load in 87% for oil & 95% for both natural gas & propane per prior. Load in $1.586 per gallon (our current “Co-Op Price) for oil & press “Recalculate”. Now using a side calculator multiply your natural gas price of 8.74 by your Service Burden. If its currently over 1.505 oil wins. (BTW – Pity that poor propane guy!)

    If you want to extend your heating calculator play time, increment the item cost values for coal, wood & wood pellets until you equate each to $13.15 Per MBTU. This is the item pricing equivalent to oil heating. Great stuff to needle your neighbor who’s “saving money” while trying to keep warm with solid fuels. Of course avoid that Old Yankee that cuts all his own wood “for nuthin” and massages his woodpile year ’round. “Heats ya twice, ya know.”

    It must be added that Condensing Gas Appliances are significantly costlier to install with reduced economic lives than cast-iron boilers.

    The Heating Blog on our website offers a wide array of related heating subject articles.


    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
    Fuel Oil (#2)1.3186Gallon8710.93
    Natural Gas1.038Therm9510.931.3 (Estimated)0.7984
    Electricity0.036kWh9910.921.85 (Estimated)0.01946
    Wood Pellets144.30Ton8010.93
    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 …..