Heating Oil vs Natural Gas – My Eyes Are Opened
July 18, 2008 | Leave a Comment
Yesterday I received a call from a customer in Rhode Island inquiring about a large Commercial Natural Gas Heating Unit for his Auto Shop. We discussed his options and it turned out that he wanted to replace his current “Fuel Oil” or “Heating Oil” furnace because of rising oil cost. Being from the Midwest, I have dabbled in Oil Furnaces over the years, but since that population is low in this area of the country, I did not have a true idea of the operating cost of a Heating Oil Furnace.
This customer made the decision to replace his current unit with natural gas, and here is why. In 2000, the average price for a gallon for fuel oil was $1.60, and compared to natural Gas, was the more economical of the two. By 2007, the cost was up to $2.85 per gallon. At this level, natural gas, even with its own increases over time was now the most cost effective fuel, from a cost of fuel only perspective. It was still a coin toss as to whether or not the replacement of equipment could be justified just for the fuel savings. Although, there are many other considerations that we are not going into here that would help make the decision to switch, including but not limited to Maintance, Fuel Oil Furnaces need to be maintained, and often the repairs are quite costly, and the cleanliness and safety of the fuel is another consideration.
Fast forward to yesterday’s conversation. I was told that current “summer lock” pricing for Heating Oil was around $4.85 HOLY COW! Read more