Heating – Propane Vs Oil
Heating Fuel – 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).
Pros and Cons
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.
Just to clarify, propane is a by product of oil, where as natural gas comes from the ground directly. As the price of oil goes up propane conversly goes up too. Natutal gas is only available in areas where a utility company pipes it in.
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.
What is a “monitor heater that is 95% efficient?” I am planning on replacing my a/c and oil furnace and installing a hybrid setup.. heat pump and furnace (oil or propane.. not natural gas available in my development. Thanks
Gene – Around this part of the Country we don’t typically hear about monitor heaters. From the little I know about them they are like a glorified space heater. Maybe another reader can share some knowledge on them.
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.
We already have fuel oil, but need to redo the chimney liner. It was an option to convert to lp. We decided to stay with the fuel oil, because it is a hotter heat, which I love in Michigan winters. You just don’t get that warm of heat from lp. I am happy we made the decision to stay with the fuel oil. We only have a cellar where the tank is stored anyway. Besides a furnace man told us that it is much safewr than propane, no invisible smell, etc.
I forgot to mention, we only use the fuel oil as a backup to get us through the night, in mid winter, as we mostly heat with a woodstove.
Cristi – Thanks for sharing. As I said the choice isn’t always cut and try. I’m not sure I agree about the “hotter heat”. Oil will produce more BTU’s per gallon which does mean it’s hotter per gallon but that’s really not relevant. A properly sized boiler with either fuel should generate BTU’s to maintain a certain temperature in the home. After all what we seek to do is hold our homes at a certain comfortable temperature.
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.)
what is the cost for a oil boilers vs propane boiler and is there any maintenace on a propane boiler?
Thanks
Dan
The cost of compatible boilers is typically a wash. Oil burners do require more maintenance.
Todd,
Living in rural upstate NY, I have a concern about the safety of a propane tank that might be accidentally shot during the hunting season. (This is not as absurd as it sounds: I pulled a large slug out of our shed siding this summer.)
@ Lou – The tanks get buried in the ground. I also live in a heavily hunted area and I’ve never heard of this happening.
I’m surprised nobody mentioned the maintenance or a oil boiler vs a propane boiler. You have to figure in the $100+ dollars a year to tune up your oil burner / furnace. A propane boiler or furnace is not as clean as natural gas but it is a heck of a lot cleaner than oil. Also since oil burners burn hotter than gas the cast iron chambers have a significant chance of cracking like mine did after just 10 years. (Burnham boiler pv73wc-tbwn) I’m now replacing it again and can’t decide whether to go with another CAST IRON boiler or a STEEL boiler. ANY FEEDBACK WOULD BE GREATLY APPRECIATED. I’m currently on well water with a water conditioning system in place that works well but the water is cold. There are pros and cons of each. But replacing an oil burner every 10 or so years is an astronomical expense to a homeowner. I know Burnham has had a lot of problems with there boilers over the last 12 years, (since 1997) but searching some of the best boilers like Weil Mclain, Dunkirk etc. they all seem to have the same issues. I guess quality really went down the tubes – no pun intended.
I think a gas boiler or furnace is definitely the way to go and its a whole lot cleaner than oil.
Hi, I just switched from oil to propane for many of the reasons listed,the one question I have is with propane will I be using more or less gal. of fuel?
@ Jim – To answer that question you really need to know the efficiency of the old boiler and the new boiler. Then you can calculate the effective BTU’s per gallon.
My 81 yr old mother is weighing the propane vs heating oil furnace replacement. She now has a heating oil furnace that is old and unlike many here, it is a forced air furnace and not a boiler heating water. There is a tank outside and from what I read here, it seems a new heating oil system is in order.
My question is….. is there a name brand heating oil furnace that anyone can recco? Thanks and she lives in northern WVa.
I have a 1975 oil boiler with baseboard heat for a ranch style house in Western Maine. The oil boiler also supplies our domestic hot water.
After reading comments from many of your readers, I’m inclined to switch to a propane boiler. My question centers around the salesman’s claim that I also need inline on-demand propane hot water unit. is this redundant? We also burn 4 cords of firewood annually.
@ Mike – I don’t agree with him. Frankly most on-demand propane boilers can do both with priority given to domestic hot water. We’ve built several new homes with a single on-demand boiler that does both domestic and hot water for heat.
Great discussion. Just going through the process myself up here in northern Ontario and looking at replacing my 15 year old oil furnace with a propane unit. A couple of other points. Insurance companies around here are getting really fussy with oil tanks….replacement every 5 years, minimum distance from your well, an over flow reservoir, etc. Those factors plus the wear and tear on my chimney is leading me to propane. Just a little concerned about the volatility.
Barry
I have just met with an HVAC contractor this morning to discuss furnace replacement. I currently have FHA heat fueled by oil. The furnace is original to the home so is 31 years old and well past it’s prime. I also use propane for the dryer, fireplace and a Jotul stove. I also have a seperate 40 gallon oil-fired hot water heater which I would also change to a propane solution if I went that way.
Currently I am paying $2.69 for oil and $3.19 for propane. I’m not happy about the price I pay for propane but the company tells me the cost per gallon is based on useage. If I used more, the ppg would drop. Do most companies use this pricing method?
The contractor is recommending a conversion to a high efficiency propane furnace and I am leaning toward that path yet I’m not quite off the fence.
I know that with oil, I have the flexibility of changing oil companies easily but not so with propane since each company provides the tanks and switching would require tank removal and replacement.
Doug – First off it’s not that uncommon to hear of different price structures for propane based on usage. Secondly, at least here in this area (NH) the tank issue really is a non-issue and here’s why. All propane dealers around here have an agreement in place so that if you change fuel companies, the new company just “owes” a tank to the previous company. People switch so much that the companies pretty much keep score. Also, quite a few (including myself) home owners actually own their own tank and then it doesn’t matter at all plus the companies here give a deeper discount if you own the tank.
As far as cost of fuel goes, they both work out about the same when you start comparing price vs efficiency.
Good luck!
It’s time to replace my propane hot water heater. I have a new oil furnace with space for a domestic hot water coil so you can see my question is should I buy a new propane hot water heater or install the coil for the oil furnace. I reviewed my last 2 propane bills and found $4.80/gal and $5.47/ gal. Heating oil $2.70/gal. Looks like I am really getting screwed by the propane dealer. As the oil furnace is new it looks like I will head in that direction. My question is does the oil fired hot water coil require a storage tank or can it just be hot water on demand. There is only myself and wife so demand is limited. Does this short cycling of the oil furnace cause maintenance headaches during summer operation or actually help in by running it during the summer? Thanks for all the intelligent discussion on this subject. Albany NY area
Guy – Your propane dealer is definitely putting the screws to you. Have you shopped around for a cheaper price?
If your oil furnace is new it may make sense to use that for your domestic hot water. However, check with your heating professional and find out if your oil furnace has the ability to monitor the outdoor air temperature and adjust the boiler temperature accordingly. Lots of new boilers have that capability which makes them much more efficient in the summer months. If the outside air is above X (let’s say 65 degrees) then the boiler will only make hot water to let’s say 120 degrees versus some hotter temperature when it’s making hot water for heat. Make sense?
Another option is buying an On Demand hot water heater, either propane or electric.
The tank issue really depends on the type of boiler you have an what options are available. For an oil boiler I would imagine a high efficiency storage tank would make more sense.
I hope this helps.
My propane dealer wants to change my tanks and review my equipment”for complience”. Sounds like a make work project for them which started me reviewing my energy needs. As my waterheater and clothes dryer, (both propane), are both 15-30 years old and the cost of propane is excessive, now is the time to make this change. I will consult with the furnace provider to understand the costs benefits of the domestic hot water from the oil furnace. Electric for the clothes dryer is a necessity and possible the water heater. I have attached a interactive fuel/btu evaluation link which is very helpful for evaluating your costs for energy. Thanks for the help.
http://www.eia.doe.gov/neic/experts/heatcalc.xls
I live in New Jersey in a townhome, and have Oil Heat. I had the option to switch to Natural Gas when I bought it 5 years ago, but it didn’t make sense, because the chimney had to be relined, the tank taken out of the basement, and it wasn’t practical in todays world of High efficiency washer & dryers, and stoves, to switch to gas for savings, because quite frankly, there is none. When I bought the home I got all new HE electric appliances. A new Oil Furnace, and converted from Electric Hot water, to a 30 gallon oil fired water heater. Best decision I ever made, the water heater provides an endless supply because of how hot oil burns and how quickly it recovers itself. The previous house that I had a gas water heater in, I always ran out of hot water if multiple appliances were running at the same time. I only use about 5 to 7 gallons a month of fuel oil for water. My electric bill averages $150, and $90 a month for heating oil.
Do your homework before thinking of switching to gas. It really isn’t cleaner, it produces a ton of methane, which is not good at all for the environment.
Anthony – Thanks for sharing your thoughts. Not sure I agree but that’s the beauty of sharing. Today’s gas furnaces have no problem creating sufficient hot water and they run much cleaner than even the best oil furnaces.
I’ve been following this discussion with quite a bit of interest for the last month or so. I too have been wrestling with the question of oil vs propane. I live in rural upstate NY and in the end have decided to go with propane so that I may more easily add a whole house propane generator to the total package of my furnace upgrade. I am buying my condensing boiler equipment from an HVAC company that does not sell fuel, so it has no vested interested in my final decision: it sells and services both oil and propane units. They actually recommended that I buy my own 1000 gal propane tank which eliminates the whole issue of leasing from a fuel company, something that is a bit of a concern in NY since even 200 gal tanks cost about 100 dollars a year to rent. I’ve checked with several suppliers and no one had a problem filling my size tank at the reasonable rate of about 2.59 per gallon. I am also switching out my electric range for a propane one. I like the idea of having one type of fuel, I hate the smelly oil tanks in my basement, and, for where I live, a whole house generator is a necessity at times. Additionally, by direct venting the furnace out the wall, I will have the option of relining my old oil flue to fit it out for a wood burning stove or pellet stove. I have wood heat on my first floor but adding more to the basement would help a lot in keeping the floors warm. Best of luck to all who are dealing with this issue. No matter what you do, it doesn’t come cheap!