Monday, December 26, 2011

Many NY Homeowners Switching to Nat Gas Heat

Times Herald Record (NY) -- "Many homeowners are switching to natural gas heat as oil prices go up: The Cost of conversion runs in the thousands, but folks say they recoup it quickly."

Conversion costs:
$1,500 to install a natural gas power burner in an existing oil-fired boiler.
$5,000 to $8,000 for a new natural gas boiler; higher price, higher efficiency.
$500 to convert from propane to natural gas, with minimal piping modifications.

The price of warmth: Projected household expenditures in the Northeast for winter heating fuels in 2011-12, and change from 2010-12:

Natural gas$1,023-2.2%
Oil $2,492 +8.4%
Electricity $1,333-5.8%
Propane $2,919+6.7%
Source: U.S. Energy Information Administration

MP: Here's yet another example of the many positive benefits of the shale gas revolution: consumers are saving money by switching to clean, high-efficiency natural gas (and most are probably switching "naturally," without any special energy tax credits, rebates, etc.), and heating companies are getting business installing new natural gas furnaces, boilers and burners.   

13 Comments:

At 12/26/2011 9:09 AM, Blogger cluemeister said...

The cost of heating with electricity seems way too low for the northeast. Anyone else agree?

 
At 12/26/2011 9:24 AM, Blogger David said...

The shale gas revolution is one of the few positives in the present economic outlook...

BUT it would be dangerous to assume that these price levels will be with us forever. There is a LOT of new gas demand being created: power plants switching from coal, new or restarted petrochemical plants using gas as a feedstock, nat gas for transportation (city buses, delivery vehicles, etc), and also home heating. It seems likely that at some point in the not too distant future, sharp demand increases will challenge supply and drive up prices significantly.

There are also issues in some places with pipeline capacity, as the CEO of Southern Company pointed out recently.

 
At 12/26/2011 10:17 AM, Blogger Larry G said...

re: the cost of electric heating

yes.. that number seems pretty low and the propane seems a bit high.

a lot depends on the zone but this chart may not be apples-to-apples.


oh... HERE's the problem...no wonder... "US Energy Information Administration"...

DANG govmint bucrats pumping out more bogus data...

geeze!!!

 
At 12/26/2011 11:47 AM, Blogger hal said...

I don't really like nat gas heat. why not have nat gas power plants and use electricity instead? nat gas is dangerous.

 
At 12/26/2011 11:48 AM, Blogger hal said...

I don't really like nat gas heat. why not have nat gas power plants and use electricity instead? nat gas is dangerous.

 
At 12/26/2011 5:11 PM, Blogger Walt G. said...

The equivalent electrical heating cost over natural gas for Consumers Energy customers in Michigan would be much higher (about 4 times as much).

The natural gas bill for heating my house and water was $168.48 last month, which converts to $642.37 for the same amount of electrical energy.

I used 17.5 thousand cu.ft. of gas that cost $168.48, which is 5,131.96 killowatts of electricity (1 BTU = 0.293 watts) The electrical cost is 12.5 cents per killowatt (1 killowatt = 1000 watts).

I think Larry G. is correct about not trusting the government data.

 
At 12/26/2011 5:22 PM, Blogger Walt G. said...

I left out that 1 cu. ft. of natural gas in Michigan has 1000 BTUs of heat content (the heat content per cu. ft. of natural gas varies by location and supplier).

 
At 12/26/2011 5:43 PM, Blogger Walt G. said...

1 million BTUs of natural gas costs about $10, and the same amount of heat using propane is about $30, or 3 times as much. The U.S. Energy chart is probably accurate for natural gas and propane.

 
At 12/26/2011 9:30 PM, Blogger OBloodyHell said...

>>> It seems likely that at some point in the not too distant future, sharp demand increases will challenge supply and drive up prices significantly.

Yes, but it's rather clear that this is a balancing act. The net result will be lowered demand for the other varieties, which will lower the price for them.

 
At 12/27/2011 8:59 AM, Blogger David said...

"lowered demand for the other varieties"

I think you mean other varieties/other types of fuel?

But if you've built a power plant to run on natural gas, then converting it back to coal isn't likely to be a realistic option, even if regulators would let you. Combined-cycle turbines won't run on coal, and you won't have the rail or dock facilities for coal delivery.

 
At 12/27/2011 6:45 PM, Blogger VangelV said...

The cost of heating with electricity seems way too low for the northeast. Anyone else agree?

I agree. The figures make no sense. Electric heating is very expensive, which is why so few people use it in cold areas.

My problem with this shale hype is the divergence from reality. Mark assumes that shale producers can continue to pump out gas at a loss and that the financing to cover losses will always be there.

For shale gas to be viable we need to see positive cash flows and lots of profits, not conference calls that keep promising profitability next year or the year after, talk about funding gaps, and promise asset sales as a way of raising capital.

This seems to be nonsense. If we get another contraction that stifles demand as the last one did most of the players in the sector will be insolvent.

 
At 12/27/2011 8:26 PM, Blogger Larry G said...

the chart needs to be tied to a specific heating zone as prices for heating vary quite a bit from New England ...to Virginia and south.

In Va.. heat pumps are used a lot but in really cold weather people see electric bills in the 400-500 range...

in milder weather the new heat pumps are pretty efficient.

I know a guy in southern NC whose electric bill is around $100 for a 3000 sq ft home, and that includes the heat pump.

 
At 12/29/2011 12:12 AM, Blogger Don Culo said...

I bought a few extra blankets and wear a coat inside the house, I have save hundreds on my heating bills?

 

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