Heating Oil vs Natural Gas:
Complete Comparison Analysis

Home heating oil and natural gas are both fossil fuels. Both are pumped from the ground. Both are almost exclusively produced in the US and Canada.

So why choose one over the other?

 

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Price

As commodities, heating oil and natural gas prices fluctuate up and down according to supply and demand — as well as highly unpredictable world events. In the same way that gasoline prices are down significantly from where they were last year, so too is the cost of home heating oil, which has now reached an 11-year low. No one has a crystal ball to predict where prices will go, but some experts expect oil prices to remain low for a while1. And for now at least, the cost difference in heating your home with one fuel over the other is negligible. Read more from the U.S. Energy Information Administration2 and in The New York Times3.

The Takeaway:

The price of oil is currently lower than natural gas—a trend that’s predicted to hold steady.

Price of oil bar graph

Efficiency

Dollar for dollar, state-of- the-art modern oil boilers and furnaces are your best value. They are robust, dependable, durable, easy to maintain and repair, have many interchangeable parts, and best of all, they’re super efficient, with efficiency ratings at 95%. Plus, the average life expectancy of an oil heat appliance is about 30 years when properly maintained, over double that of the 11-14 years promised for natural gas furnaces. Modern oil heating systems in well-insulated homes now allow homeowners to achieve the same amount of warmth using 40% less fuel, further reducing emissions and lowering heating costs.

Click here to learn about easy improvements you can make around your house to further lower your energy bill.

The Takeaway:

Today’s oil burners have become much more efficient over the past 25 years and last twice as long as natural gas furnaces.

Choice

There are more than 100 heating oil and propane suppliers who deliver to customers across Maine. So, if you’re comparing prices, or looking for a different service plan, by all means shop around. In most Maine communities, though, once you switch to natural gas, there’s only one supplier. Monopoly situations like this rarely bode well for consumers4. These companies have little incentive to provide timely service, clarify an invoice or work to earn your business. They’ve got you, and they know it. (Think cable companies.) To locate an oil dealer in your area, click here.

The Takeaway:

Of the 100-plus oil providers in Maine, most are family owned and operated, meaning more competitively priced, local options than are available with natural gas.

Environmental Impact

There’s been a lot of talk lately about how heating oil is bad for the environment and natural gas is somehow good. For the record, home heating oil and natural gas are both fossil fuels — one is not more “natural” than the other. Home heating oil is made of, well, oil. In recent years, heating oil has been blended with biodiesel (much of which is made up of waste soybean oil) to create a cleaner, domestically produced energy resource that’s virtually sulfur free.

Natural gas, on the other hand, is comprised almost exclusively of methane — an extremely potent greenhouse gas that contributes significantly to global warming. According to the US Environmental Protection Agency,5 “Pound for pound, the comparative impact of methane on climate change is 25 times greater than CO2 over a 100-year period.” Others cite additional downsides.6

The Takeaway:

Heating oil burners account for just 0.34% of US particulate emissions while natural gas leaks pose a significant climate risk.

The Cost of Conversion

Many newer heating systems can be converted from burning heating oil to burning natural gas for $5,000 to $10,000. Older systems may cost more to convert, and should probably be replaced altogether. Savvy homeowners take into account the cost of the conversion in calculating their annual energy savings.

With oil and gas systems being similarly efficient, the cost to convert is the bet on the future commodity cost. Using seven years as a horizon (the average time a US homeowner stays in one home before moving) you’d have to save at least $500 a year on your fuel cost, for seven years, just to break even. At today’s energy prices, where heating oil costs less than natural gas, that’s money you’d never get back. Increasingly warm winters have caused the payback period to increase even further (the warmer the winter, the longer it will take to make up the cost in future energy savings).

The Takeaway:

Converting from oil to natural gas requires paying a hefty sum upfront for new infrastructure—money you’re unlikely to make back in savings.

Safety

When it comes to safety, heating oil is hard to beat. It won’t explode, or even burn, unless it’s turned into a fine mist. You can actually drop a lit match into heating oil and the oil will extinguish the flame. Natural gas, on the other hand, is an extremely flammable fuel. It’s imperative that lines be checked regularly, and that furnaces be inspected for any possible leaks.

Click here for a handy guide of how to keep your house safe year-round.

The Takeaway:

With oil, there are clear signs of any leaks, and heating oil will not ignite in its liquid state (up to 140°F), which means no natural gas-like explosions.

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Home Heating Prices
As of 08/18/2017
Statewide Home Heating Oil Average
$2.03/gallon
Monthly prices are based on average residential usage in Maine 2017.
Summit Natural Gas Winter Rate
$2.49/gallon*
*Equivalent when comparing gas ccfs to gallons.