Sunday, March 31, 2013

Closer to Home* – Energy Conversion Efficiencies and Home Heating Fuels

This week I am not going to look at NH energy issues from my usual 30,000 ft viewpoint. Instead I want to focus right in on our homes and how we heat them. I was reviewing some publications from the Energy Information Agency and I was struck by the information on this map.


The map shows the predominant home heating fuel used in different parts of the country. In the bulk of the country, as shown by the states in blue, the key home heating fuel is natural gas. In much of the southern part of the country as well as the Pacific Northwest, most homes are heated by electricity (shown in red) and here in New England, New Hampshire is one of the handful of green states that rely on oil or kerosene for the bulk of home heating applications.
We in New England should be concerned about our dependence on oil for a number of reasons;
  • We are reliant on a fuel source which is largely imported.
  • We are reliant on a fuel source that has shown increasing price volatility over the past 10 years.
  • Unlike much of the US, we are not reaping the financial and reduced carbon emissions benefits of the natural gas bonanza.
There is not much we can do in the short term to change the situation but it is important to understand the consequences of our overt dependence on oil heat. Let's look at some specifics.
In the table below I have listed the various home heating sources we use in New Hampshire along with their recent retail prices, their energy content in BTU/unit, their cost in $ per million BTU ($/MMBTU) and then, using the energy conversion efficiency concepts for each fuel I introduced last week, I have calculated the cost of the useful heating energy produced from each type of fuel.
I have used some of these data points to generate the chart below which allows us to directly compare the costs of the input and useful heating output values for each of these fuel sources on a common basis, $ per million BTU: the information is quite revealing.

Natural gas is by far the cheapest fuel source. In fact, electrical heating is 3.4 times as expensive and oil heating is 2.6 times more costly on a thermal energy output basis. Wood heating, either with regular firewood or wood pellets, is far better cost-wise, than oil or electrical heating. In fact, the costs for wood heating are presently only 30% higher than those for natural gas.
Even though natural gas is such a low cost heating fuel at the moment, most NH residents cannot avail themselves of this choice as in most parts of New Hampshire natural gas is simply not available. Without the low cost choice, we have to select between wood, fuel oil, electricity or propane.
Part of our choice will be influenced by the relative volatility of fuel prices. In the figure below I have plotted the historical costs of the various home heating fuels on a cost per energy content, $ per million BTU, basis. (These prices are uncorrected for efficiency factors.) The green data points show that, for a long time, wood has been the low cost fuel in NH and sometimes by a considerable margin. Oil and natural gas prices (red and blue, respectively) closely paralleled one another but, just after 2007 the prices diverged, with big increases in oil costs due to world market prices and decreases in natural gas costs due to the US natural gas supply bonanza created by fracking technology.

Even more recently natural gas prices have dipped below those of wood. It turns out that wood prices have a high sensitivity to the price of oil-based fuels, like kerosene, which are used extensively in the harvesting, preparation and transportation of wood-based fuels. As a result, high oil prices have lead to recent price increases in wood-based fuel sources. Electricity costs per unit of energy are substantially higher than any of the other fuels, with propane prices falling between those of electricity and oil.
When looking at relative fuel prices we have to take into account a number of other factors. Oil prices are generally more volatile and my guess is that they are likely to increase in the future but, on the other hand, I wonder how long the natural gas bonanza will last and whether prices will skyrocket higher sometime in the future. The relatively low cost and low volatility of wood-based heat make it an option well worth considering for home heating applications, especially if you don't have access to natural gas. 
I wrestle with these issues myself and I can get quite worked up about them. Like most New Englanders, I heat with oil and that drives me to distraction. I take some small comfort that oil heat is presently less expensive than electric heat and that I am able to store about a month's worth of oil on my property in the big ugly black oil tank I have in my basement. The folks reliant on natural gas have no storage capacity and a gas supply pipeline problem can result in the immediate inability to heat a home. However, that is small consolation when I consider the extra cost of heating my home. I have an average New England home and I burn about 850 gallons of oil per year for heat and hot water. This past year my costs for oil were about $3200. If I could convert to natural gas I would save almost $2000 per year. I would far rather be spending that money elsewhere than on a carbon-intensive, volatile, imported energy source.
Going with wood pellet heating would allow me to save about $1700 per year and, because natural gas is not even an option, maybe it is time to think seriously about the wood pellet burner for my home heating needs. I am, however, left with one nagging concern: if everyone in NH changed from oil heat to wood heat, would the New Hampshire forests be able to support that amount of tree harvesting or would we end up importing wood from Canada and the other parts of the US and therefore undo some of the cost and carbon savings associated with wood heating?
I trust I have left you thinking about your home heating options and their associated costs. If you have natural gas, you are indeed in a fortunate position because the rest of us are faced with heating fuel decisions that are quite complex. If you have changed over recently to wood pellet heating, let us know what your experience was.
Until next time, remember to turn off the lights when you leave the room.
Mike Mooiman
Franklin Pierce University
(*Closer to Home was the third album from the 70's power trio, Grand Funk Railroad, and the song I'm Your Captain (Closer to Home) is, I think, one of their finer tunes. In fact, this was the very first American rock and roll record I was exposed to so I have a rather special connection with this album. For a bunch of guys from Flint, Michigan, they made some good music, wrote some great tunes and left a lot of good memories. This is one of those albums (along with Led Zep II and Dark Side of the Moon) that I have had on LP, 8 track, 4 track, CD and MP3 formats! I believe I am showing my age.)

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  1. Great post. Also interesting is that if you choose Nat Gas or propane, installation costs can be much lower as the construction and carbon venting can be accomplished with PVC pipe rather than a brick or stainless steel chimney. In addition, it is my understanding (without research) that Nat Gas is more efficient than the oil alternatives.


  2. It all depends on the type and configuration of the natural gas furnace. If you have a condensing type furnace,you can indeed vent these through PVC pipe as the discharge gases have been cooled to recover a good deal of the waste heat. These condensing furnaces have energy conversion efficiencies of the order of 90% (or even higher). Conventional gas furnaces do not recover the waste heat by cooling the off-gases so, like conventional oil fired furnaces, they have to be vented through brick or stainless steel chimneys. These furnaces have efficiencies of the order of 80% - the same as oil fired furnaces. This could be a good topic for a future blog.

  3. Thank you for sharing. I just switched to heating oil in Gloucester and can already tell the difference. Not only is my home warmer, but its warmer at a fraction of the cost I was paying before.

  4. This is interesting. I am looking for someone to help me with oil to gas conversions. Where can I find someone that can help me with that?


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