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Heating – Propane Vs Oil
Last year when we built the new house one of the big decisions I had to make was what type of heating fuel to use. Should we use the traditional oil heat that over 90% of people in New England rely on? Or should we use propane (natural gas is not available here in this part of NH). The answer to that question is pretty complicated when you sit down and think about it. For us I already knew we’d have propane in the house to cook with and for our direct vent fire place. For me one of my biggest concerns with oil was having an oil tank in my basement that could potentially leak some day. The other big issue to consider was venting the two different types of fuel. An oil fired boiler would require either a direct vent out the side of the house (this is really ugly, stains the house and gets quite hot) or a traditional chimney. Today’s modern gas boilers allow you to vent the furnace through regular PVC pipe up through the roof or wall. To make a long story short I chose the gas boiler. The biggest reasons I chose it was the lack of an oil tank, the venting through the roof and the ability to have a high efficiency boiler.
One thing I really didn’t investigate all that much was a cost analysis of the two fuels. So after last winter and my rather high fuel bills I did some research on the comparison of the fuel costs. It’s not as simple as comparing the price per gallon of the two fuels. Currently where I live a gallon of fuel oil costs $2.69 while a gallon of propane costs $1.93. So on the face of it propane sounds like a huge bargain to the laymen. The real issue however is the energy that one gallon of each fuel can produce. Fuel oil can generate approximately 130,000 BTU’s while propane is approximately 95,000 BTU’s. However, most oil boilers average about 85% efficiency at best while the gas boilers can produce an efficiency of 95% or more.
Using this data I tried to come up with the cost per BTU for both types of fuel with the assumptions above.
FUEL OIL: 130,000 BTU * 85% / $2.69 = 41,078 BTU’s per dollar
PROPANE: 95,000 BTU * 95% / $1.93 = 46,762 BTU’s per dollar
So in this example the propane is slightly more cost effective. Now let me give a big disclaimer here. If you ask a bunch of heating folks most will tell you that typically oil is a better deal. It depends on so many variables and the actual equipment involved. For me what it tells me is the two fuels really are pretty similar in cost per BTU.
For me the fact that I’m burning a cleaner fuel, my boiler has almost zero maintenance, I have no oil tank to leak, I have just water vapor and carbon monoxide exiting my vent, and I needed propane anyway to cook with and run my fire place, the decision still seems to be the correct one for us. I encourage you to look at these issues next time you select a new heating system for your home.
Heating Oil Vs Propane
Heating Costs per BTU
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Hi,
I work for a company that provides both heating oil and propane. Although your numbers are close, there are a couple of specifics I would like to bring up.
Oil is about 139,000 Btu. per gallon while Propane is actually about 92,000 Btu. per gal.
The emission from your vent includes carbon dioxide, not monoxide, although it may have a very tiny amount of carbon monoxide as a normal part of combustion. A smoking cigarette creates carbon monoxide! (Large amounts will occur only if it has been tampered with, is broken or not adjusted properly).
The factor of efficiency as you mention also needs to address variable capacity and boiler supply water temperature which can be done with the gas boiler and directly affect the use of fuel when demand is low. The best comparison I can offer is highway mileage in a small car vs a large car. When the boiler operates in low it is the most efficient, similar to the extraordinary highway mileage a smaller car can achieve over a larger. The boiler can ramp up and still provide full demand capacity when required.
Much more can be said about mixed return water and what can be done with each fuel etc. However the controls, labor, set-up and maintenance to achieve the similar savings using fixed capacity and even condensing oil equipment is so much higher that the tried and true gas equipment available today gets high marks from me right now.
Tom Grunstra
Hi, I’ve been wondering about whether I should get a oil or propane heating system for my home which we just broke ground for in Columbus, Ohio. I was leaning propane, but this article helped me come to a final decision. Thanks
-will
http://www.homebasecolumbus.com
Thanks for this! I just had a sales guy tell me that a gallon of oil and a gallon of propane provided the same BTU’s and I didn’t think he was right.
We did decide on the gas system to replace an existing oil system due to the higher efficiency system and the lower cost per gallon of the fuel. Seems that the cost of propane is not rising quite as quickly as the price of fuel oil right now.
Although the salesman was not right on the BTU’s per gallon thing I still feel that the gas was the right choice for us.
Typically I agree with you. However, propane may not always be cheaper. For me the biggest benefit was not having two fuels in my house. We use propane to cook, grill and in our fireplace so the decision was easy for me.
It is interesting to note that no one has mentioned the source of the fuels. It is my understanding that we import 70% of our oil and that this country has vast reserves of natural gas. This would be one application in which we could reduce our dependency on foreign oil.
Like these other comments I am also in a position to decide to stay with oil or switch to propane for my home heating as I need a new furnace and I too have use propane for the stove/dryer. My question is it safe? I have read stories of home explosions from gas/propane . .
If you’re already using propane in your home I would argue there is no increased risk. In fact, having a contractor come in and install a new propane furnace would ensure that your current gas lines are checked and evaluated for the new furnace. Today’s gas lines are typically run with a continuous piece of pipe which limits the number of joints and leakage potentials. Most of the explosions you hear about on the news are due to natural gas lines that are hit during excavation outside a home which causes gas to leak into the home. I can’t decide for you but I feel it is safe for my young family.
Hi
Just my two cents here. If you can live without ac I highly reccomend radiant heat using an instant hot water heater that uses propane. If you are building new get your 1/2 inch special pex lines in your floors concrete or wood in 300 foot loops, I have four loops heating my ground floor which is cement, no basement because were on a hill in the woods. Make sure you go propane because oil boilers heat to180 degrees and has to be tempered (cooled) and that’s just stupid, most instant hot water heaters heat between 110 and 140 degrees which is ideal, mine is set at 120. These compact gas instant hot water heaters also come in natural gas versions. You can also use these heaters in baseboards and air handlers if you are resoursefull because you can get more heat out of the heaters to do so. Sorry this really a summary, any questions email me, I’ll try to help you out. Rob at humblpie@yahoo.com
To correct what was said earlier…Propane does not come from domestic sources (for the most part), it is derived as a by-product of the oil refinery process. So indirectly it is imported just like fuel oil.
I’m glad I found this. I too have been looking at oil vs. propane.
After pricing a geothermal system at 40k (!!!!) we were left with these two options. Since we have propane already for hot water and cooking this is a no brainer after seeing the numbers.
To correct what was said earlier…Propane does not come from domestic sources (for the most part), it is derived as a by-product of the oil refinery process.
Propane can come from either oil or NG. In places like Canada 80% comes from NG. This is one place where we can become less dependent on people that don’t like us.
Also, if you are planning to build new or replace forced air or A/C, consider a dual fuel setup with furnace and heat pump. Even in cold climate and low NG/Propane prices and high electric rates you can get cheaper BTU costs at moderate temperatures. The equation gets better at higher NG/Propane and lower electric rates.
Nicely put. We are building new and needed to decide between the propane and the oil, but since we were already needing propane for the fireplace, I was leaning towards the propane. This helped immensely. Thanks
Hi,
I am trying to work out a correlation formula between propane and oil prices viz., plug n play type of formula where I can see the propane price US$ per ton based on oil prices in US$ per bbl. Can anybody help me on that. If possible then please do drop me an email on a.syed@tasnee.com
Regards
One more thing to consider is the source of fuel. Here in Western Mass, the propane companies own many of the tanks in the yard (like a lease) and only the owner of the tank will fill it.
So we are forced to go with a company that charges us >70c per gallon more than the open market. No other companies will fill this in ground tank and we are trapped. We use > 1000 gallons per year, so do the math. I looked last week and the open market price for LP was $2.35, company XX was charging their customers $2.49, our company, EO Osterman, is charging us $3.03!!! Last year we paid more than a $1000 over market price. Sounds like it should be against the law, doesn’t it.
Monopoly in our area. Check yours and see who owns the tank and liability. I am thinking about converting from LP to oil to get out of this price fix.
@ Ken – Around here all the fuel companies have agreements in place. So let’s say you change propane suppliers the new supplier owes the previous supplier a tank. Basically they all keep score on tanks and it ends up working out fine. In fact, here you can actually own your own tank and shop around for pricing and get better deals.
[...] comparing the cost of heating with oil versus heating with propane. The two posts that I wrote, Heating – Propane Vs Oil and Oil Vs Propane Fuel Calculator have been read more than any other posts I’ve written. So [...]
Sorry to disagree but if you check out the DOE web site http://www.npga.org/i4a/pages/index.cfm?pageid=914 you will see that Propane is $20.47 per million BTU and Heating oil is only $16.01 per million BTU so propane is at least 23% more expensive than heating oil. I have had a monitor heater that is over 95% efficient and my heating bill was only $50 a month in the north west including some 20 below zero weather.
Of course the cheapest energy of all is natural gas. Check it out for your self.
@ Stan – Couple things, first of all you’re not considering the true efficiency’s in the boilers. Also, you’re using 2007 pricing information before the huge sore in prices of oil. In addition, when you do the numbers which I have pointed out oil and propane actually flip flop from year to year depending on pricing. There is no huge winner in the debate and it actually comes down to personal preferences. Thanks for the link.
I’m not getting much definitive info to make a comparison. Seems like LP is more efficient, yet oil is cheaper per gallon – and I believe a gallon of LP goes further than a gallon of oil.
Outside of the simplicity of having only one fuel source for heating/stove/dryer – is propane equal cost-wise to oil per gallon in this current day?
Thanks for any info on this matter so I can determine which route I want to take with a heating system where the burner cost is the same for both.
Jim
A few things to consider.
Heating Oil is not mostly from these ‘foreign lands’ everyone tries to make it out to be. Actually Natural Gas, Heating Oil and Propane came from the same spots in the ground (shocking). 85% of Heating Oil is from America. The U.S. is currently the country with the second most proven oil reserves in the world (thanks to the Dakota Fields). Two of our three biggest importers of oil are Canada and Mexico (wow they are actually our biggest importers of the other stuff too…shocking). 90% of the worlds refining process, which breaks up Crude Oil into products is done in the United States.
Any heating source being ‘cleaner’ or the ‘cleanest’ is debatable. If you are looking strictly at CO2, yes you can gauge those types of things but considering Natural Gas is made up of Methane (54 times worse than CO2) and leaks 7-11% in the transmission process I’d say its not ‘cleaner’ for humanity or the environment.
Heating Oil isn’t explosive or even flammable (that’s right throw a match in a gallon of oil). The same cannot be said for Propane or Methane (Natural Gas).
Heating oil is the cheapest of the three per BTU equilvalent 90% of the time. Actual running efficiency of any ‘condensing’ units that tell you they are 95% efficient are usually much less.
This all being said, almost every source of heating is as good as the other and it is all just preference. Look what CECA (the Consumer Energy Council of America) says about converting from one to the other. Basically any of these sources are just as good as the others.
@ Chris – Thanks for the input. It’s very true that if you break down the numbers that there’s really not much difference in the cost for each fuel especially if you look at th average over several years as the price of fuel fluctuates so much.
In responce to heating oil not being flamable, is not true, all products have a flash point, just like jet fuel which is nothing but extra clean kero, that is very similiar to heating oil, which is the same as Diesel, just dyed red. Product like this is what took down the World Trade Center.
@ John – You are correct. What I meant to say was #2 heating fuel is very stable and unlikely to explode or ignite without significant heat.
I live in MA. I currently have Oil and Propane in the house. I will be replacing the boiler soon (it’s 22 years old and inefficient).
I know about the difference in heat capacity between oil and propane, so everything else being equal, you’d go with oil.
But there are several questions I’d like somebody to answer:
1. Most older homes have baseboards sized for 180F heat (actually 140-180). So if you put in a condensing boiler, you won’t get much if any condensing savings, right? (Condensing boilers get most of their value if the return is in the 60-70 range and no more than 120.) So you’d have to run an expensive condensing boiler without enjoying the claimed savings. Experts: is this correct?
Since the stimulus bill has raised the floor to 90% AFUE efficiency, you might buy one of these condensing models just to get the $1500 tax rebate.
2. Most homes heating systems that old oversized, and if you try to size realistically (we have a cape), the input BTU assuming a low temp of 0 degrees F is no more than 60K. Yet most non-condensing oil boilers are sized 80 or above and if you try to run an oil burner too low it gums up. Thus you would tend to try to adjust things with a fancy outdoor reset like the Tekmar 260. But you might still short cycle, wasting fuel.
3. Gas boilers generally can modulate (turn down the flame like on a gas stove) so that you have effectively a range of input BTUs that can adjust to the real heat loss of the house based on the outdoor temp, return temp, etc. Here’s the question: is this modulating capability enough to make up for the difference between propane and oil heat content (92K vs 139K)?
4. Our chimney will probably need expensive lining for an oil boiler but with gas we could get a direct vent PVC pipe. That might save money.
5. Is there any other factor (other than yearly cleaning costs favoring propane) that we should be considering?
Thanks for any insights.
@ Alex – Great questions. I’m certainly no heating expert but I can say that typically the oil vs heat battle is a wash no matter how you look at it. It really comes down to personal choices about the fuels. I’m not really sure that the return water on condensing units is that low (I could be wrong). I had a condensing unit installed in my first home that had baseboard that was 40 years old and it worked great.
Hopefully one of the readers can answer your questions. Have you asked some of your local heating experts?
Great discussion. One more consideration
aesthetics… Gas boilers are quieter.
Don’t hear that motor boat taking off in your basement
every 30 minutes in the winter…
@ Mark – Very good point. We never know when our boiler is running…extremely quiet! Typically small in size as well!
Hi,
Does anyone know what would be the overall energy cost of using propane, if one was also using propane to power the water heater, range and dryer? I suppose if one uses oil, the above items must run on electricity.
Any ideas?
@ Eric – Can you please clarify your question. It’s a bit confusing.
I’m interested in the groups thoughts on the Eric’s about heating water and a dryer, we all know he benefits of gas cooking.
I may represent a different population of users in that I need a
fuel that works at low tempersture (a seasonal home set at 50 during the winter and hot water for 2 people most of the time. From what I’ve seen the in-line tankless flash heater’s would seem the best for my application but I’m not sure wether or not that tips it to propane heat (the system the central furnace will be married to is forced hot water.)