Natural Gas Vs Fuel Oil Vs Propane: The Furnace/Boiler Heating Debate
Particularly for larger buildings and complexes, furnaces and boilers are the industry standard with respect to heating requirements. The reason is because the most efficient and cost-effective means of heating a medium to large building or complex is — almost always and without exception — a boiler or furnace. Heating a medium to a large building with an electric heating system is too cost prohibitive to be fiscally efficient. Nor are solid fuel stoves functional.
Why Only Natural Gas, Propane, and Fuel Oil
Heating a large complex with a solid fuel stove — one that burns coal — is typically impractical. Coal produces large quantities of particulate matter and hydrocarbon emissions, so it pollutes the air in the immediate vicinity of a coal stove. And, the burning of coal results in ash, aka, coal combustion residuals or CCR. Coal ash requires proper disposal which means an additional step in the heating system process.
Boilers and Furnaces for Residential Heating as Well as Industrial Complexes
Boilers and furnaces are also extremely efficient means of heating residential homes. But, as initial costs can be higher than those of a solid fuel stove or electric baseboard heaters, boilers and furnaces are not always a homeowner’s first choice. However, once a furnace or boiler is in place, the heating costs are considerably lower than those associated with electric heating and the work and maintenance associated with boilers and heaters is considerably lower than that associated with a solid fuel stove.
In addition to being less expensive — on average — than electric baseboard heating, boilers and furnaces are low maintenance and easy to use in residential settings. The advantages of using boilers and furnaces in medium and large buildings are even greater.
There are other advantages to using boilers and furnaces aside from costs, ease-of-use, and low maintenance, but those are the biggest factors that lead families, companies, and corporations to choose boilers and furnaces over other heating options.
So, the question that remains, what type of fuel is the best fuel for industrial and residential heating?
Fuel Oil, Natural Gas, or Propane
While there are other options, the three most practical choices usually end up being natural gas, propane, or fuel oil. Wood, like coal, is dirty both with respect to clean up as well as emissions. Homeowners who do not want the hassle or the smoke prefer fuel oil, propane, or natural gas.
With respect to large buildings and complexes, fuel oil, natural gas, and propane are the only practical options. The days of heating large buildings with coal and wood furnaces are long past as solid fuel furnaces must be manned around the clock.
Cost of Natural Gas vs Propane vs Fuel Oil
One of the first thing that most individuals and companies want to know with respect to the differences between natural gas, propane, and fuel oil heating systems is what is the difference in cost. There are two things to consider when evaluating costs. The first is the difference in the cost of fuel, the price of natural gas vs fuel oil vs propane. The second is the cost of the furnaces. There are big differences between propane, gas, and fuel oil — aka, #6 diesel — boilers and furnaces.
Cost Comparison Analysis of Natural Gas vs Propane vs Fuel Oil
There is no certainty with respect to cost differences between propane, natural gas, and fuel oil because fossil fuel prices fluctuate minute to minute, day to day, year to year, and decade to decade. But, over the course of history, fuel oil has been — and continues to be — the less expensive of the three choices.
Understanding why fuel oil is less expensive, however, is not as simple as a price per unit of measure comparison. Natural gas and propane being gases and fuel oil being a liquid makes a price per volume comparison difficult. Per gallon, propane and natural gas are less expensive than fuel oil.
But, the amount of energy in a gallon of fuel oil is exponentially more.
To further complicate matters — unlike most other gas or liquid fossil fuels, — natural gas is not sold per gallon. Rather natural gas is packaged in cubic feet. Since natural gas is packaged in cubic feet and fuel oil is sold in gallons, there is no direct conversion. Even a gallon of propane is not equivalent to a gallon of fuel oil because the gas is compressed. That means a 1-to-1 comparison is inaccurate.
To compare the prices of natural gas, propane, and fuel oil requires a per-million-Btu comparison.
Price Comparison of Fuel Oil and Natural Gas per Million Btu
The prices of fossil fuels fluctuate, sometimes wildly. Additionally, the price of different fossil fuels varies from one region to another. The differences in price from one area to another are a symptom of transportation. The closer to the location a fossil fuel is extracted from the ground, the less expensive the fuel.
Case in point, natural gas is considerably less expensive in the Southwest than the Northeast. Oil is less expensive in the south and in Alaska than it is in the East and Midwest.
While market fluctuations and regional differences in price make deciding on a boiler or furnace fuel more difficult, there is value in looking at historical trends. Historic differences between fuel oil and natural gas can help consumers develop a general idea with respect to cost differences.
Historic Natural Gas, Fuel Oil, and Propane Prices
From 2005 to 2018, the price of natural gas has fallen from a high of $18.51 per million Btu to an average of around $3.00 since late 2016. Fuel oil cost $1.75 per gallon in January of 2005. While it reached a low of $0.89 in 2016, since then it has reached a high of $2.00 per gallon, though it is trending down again. And according to TradingEconomics.com, “Propane was quoted at 0.85 USD/GAL on Monday, February 26. Historically, Propane reached an all-time high of 1.67 in February of 2014 and a record low of 0.33 in January of 2016.”
Comparison of Btu in Fuel Oil, Propane, and Natural Gas
There are 91,000 Btu in a gallon of propane. That means, there are 1 million Btu in every 11 gallons of propane. As there are 150,000 Btu per gallon of fuel oil, there are 1 million Btu in every 6.66 gallons of fuel oil.
So, in order for fuel oil to be cheaper than natural gas, the price of a gallon of fuel oil must be 33.33 percent of the price of one million Btu of natural gas. To be more expensive than propane, one million Btu of natural gas must be 110 percent more expensive than a gallon of propane. Not since January of 2016 when natural gas was almost $6.00 and fuel oil was $0.89 has fuel oil been less expensive than natural gas.
Propane has not ever been less expensive than natural gas. Natural gas is extremely low in carbon content and extremely high in hydrogen content which means it does not burn efficiently, produces less heat than propane, and has a lower fuel density. In other words, natural gas (methane) is to gas fossil fuels what lignite is to coal.
But, for the 50 years prior to 2008, natural gas was always more expensive, considerably, than fuel oil. Only with advancements in hydrofracking technology and massive drilling efforts through the Mountain West and Desert Southwest since 2005 did that change.
Unfortunately, low natural gas prices may quickly become a thing of the past. In late 2017, the U.S. began importing natural gas from Europe to help the New England area get through the winter months. According to a January 19, 2018 report in Bloomberg.com, “this would be the first time that the U.S. imported a cargo from northwest European storage tanks, some of which undoubtedly came from the $27 billion Yamal LNG plant Russia started a month ago.”
Irrespective of whether or not the price of natural gas rises or falls, the cost for consumers will likely remain the same. Because the cost of propane and natural gas furnaces are higher than the costs associated with the costs of fuel oil furnaces and boilers.
Cost of Furnaces and Boilers: Natural Gas vs Propane vs Fuel Oil
Though it is a tight race with respect to price per million Btu between natural gas, propane, and fuel oil, with respect to natural gas boilers and furnaces vs fuel oil furnaces and boilers, the cost differences are not even close. Fuel oil furnaces and boilers are considerably less expensive.
“The typical gas furnace cost is $3,000 to $6,000 installed, although higher efficiency models and/or complex installations could push the cost up to $7,500 to $10,000 or more. Oil furnace cost is roughly $2,500 to $5,000 installed, but similar to gas furnace prices, it’s not unheard of to spend $10,000+. The average propane furnace cost is $3,000 to $6,000 installed. Again, though, costs could reach or exceed $10,000.”
Not only are fuel oil boilers and furnaces less expensive than natural gas and propane boilers/furnaces, they have a considerably longer life expectancy — typically more than twice the life — are much cheaper to repair. While some furnaces last longer than others, depending on a variety of factors, a good indication of how long you can expect a furnace to last is the warranty with which it comes.
The following is the warranty for an oil furnace, “Comfort™ Series Oil Furnaces. As its name suggests, this oil-fired line is built for reliable comfort in your home—and your budget. You can have a 20-year or lifetime heat exchanger limited warranty for the confidence you’d expect from our products and heating efficiency of up to 86.6% AFUE.”
For a comparable gas furnace, a warranty may read something to the effect of, “The No Hassle Replacement™ limited warranty is matched to four mainline product groups: 10 Years – Top-of-the-line products; 5 Years – Mid-tier products; 1 or 3 Years – Standard-level products.”
Increasing Combustion Efficiency to Reduce Costs of Energy-Dense Fuels
Incomplete combustion of fossil fuels is innate. The very nature of fossil fuels dictates that a portion of the fuel purchased escape out as fuel unburned. And, the higher the energy density of a fuel, the greater the sum that is lost.
The reason high energy density fuels — all things equal — does not combust as efficiently as fossil fuels with poor energy density, natural gas, for example, is because of poor oxygenation. For the stoichiometric combustion of fossil fuels, the carbon and hydrogen that combusts must first be oxygenated. When a fossil fuel is a homogeneous mixture, oxygenation is not a major issue.
But, high energy fossil fuels are heterogeneous mixtures. The carbon and hydrogen atoms cluster together in groups which minimizes the surface area of the molecules. Without surface area exposure, fuel molecules do not oxygenize.
Maximizing the homogeneity of energy-dense fuels requires a pre-combustion fuel catalyst. The Rentar Fuel Catalyst can increase the energy output of a boiler or furnace by up to 30 percent. That is not only a 30 percent increase in energy efficiency but also a 30 percent increase in savings.
For those partial to the convenience and efficiency of fuel oil, the Rentar fuel catalyst will not only reduce black smoke by 44 percent, reduce greenhouse gases like CO, NO, NOx, and SO2 by 19.2 percent and elemental and organic carbons by 35 percent, it will dramatically lower the sum of fuel oil you burn monthly.