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 price of oil is currently lower than natural gas—a trend that’s predicted to hold steady.
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.
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.
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).
Converting from oil to natural gas requires paying a hefty sum upfront for new infrastructure—money you’re unlikely to make back in savings.
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.
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.
1The Wall Street Journal, “Oil Futures Signal Weak Prices Could Last Years.”
2The US Energy Information Administration, “This Week in Petroleum.”
3The New York Times, “Oil Prices: What’s Behind the Drop? Simple Economics.”
4CentralMaine.com, “Summit Natural Gas wants customers to foot bill for ad campaign.”
5The US Environmental Protection Agency, “Overview of Greenhouse Gases.”
6Fast Company, “If Natural Gas is a Bridge to a Clean Energy Future, It’s a Short, Uncertain Bridge.”