The historical assumption is that natural gas heating is 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”, and are therefore “less expensive” than oil and “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, respectively. Now let’s get in a little deeper.
There are three basic elements in any hydronic heating system:
- Heating water (a boiler),
- Moving heated water (distribution), then
- 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”.
Over a century 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 that provided heating operational flexibility and remain so to date. However, the natural (gravity) convection attributes of yore are innately present within “modern” hydronic systems and must necessarily be negated with “check-valving”.
Introduction of the Delta-T ECM Hydronic Circulator has enabled us to recreate what we call a “Neo-Gravity Hydronic Heating Appliance”. Now natural convection is finitely controlled by the Delta-T ECM Circulator much like “paddling a canoe with the current” ….. virtually effortless! Functionally it is akin to “putting an ‘Automatic Transmission’ on a Boiler”. Hydronic distribution energy is typically reduced by over 90% of contemporaries. By further coupling with a high-mass, cast-iron boiler reduces burner cycling and system operating temperatures, increasing boiler AFUE substantially, depending upon the site radiation and heating demands. These claims are substantiated within our U.S. Patent No. 10,690,356 and Canada Filing No. 2,964,131. Our website www.BoilersOnDemand.com has further details.
So, first upgrade your aging, less efficient boiler to our post-modern, high-mass, Neo-Gravity Delta-T ECM Hydronic Heating Appliance.
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, that your neighbor recommends, or whatever. Not unlike automobile “gas station hopping” the oil distributors have a back door pricing system too, called “Rack Pricing Plus” Contracts with Consumer Fuel Co-Operatives. Co-Ops aggregate fuel demands of their memberships and solicit seasonal quotations for heating fuel. For example, we and our participating customers realized a 25 to 40% reduction over retail pricing in our area (N.H.) throughout the 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 based by their “Cost Per Million BTU”. Using the NH Climate Audit Heating Cost Calculator (our regional preference) we have calculated heating energy costs 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 further 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, typically 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.
Example: 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 “Co-Op Price” at this original writing) 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 far reduced economic lives vs. cast-iron boilers. Statistically you will buy two other heating systems to equal a good cast-iron boiler system!
“The Heating Blog” also on our website offers a wide array of related heating subject articles.