Posted by: Chris Maloney | November 20, 2013

Will You Save Money Converting From Oil To Natural Gas?

English: Natural gas burning

English: Natural gas burning (Photo credit: Wikipedia)

Anyone who has traveled anywhere in Central Maine knows that you just can’t throw a stick without hitting a natural gas dig.  I already know I’m not fond of them as a driver, but I wondered if what they’re doing could be useful to me.

Can I save money converting from oil to natural gas?  The current short answer is yes, eventually.  But I’m not a large industrial user like Hyde Academy, which halved its costs in a year from 400,000 to 200,000, making the payment of 200,000 for the conversion well worth the price.  Either they were going to pay the oil man or the installation guys.

Neither Maine Natural Gas nor Summit Natural Gas has anything to say on the issue besides being coy and trying to get someone out to my house to sell me on the idea.  Sorry, that doesn’t excite me anymore than having someone hard-sell me insurance or anything else.

I will give credit to Bangor Natural Gas (here) for giving a great deal of information.  But their initial teaser, that natural gas is way, way cheaper than oil, isn’t going to hold.  I looked at Conedison‘s estimate of how much natural gas costs in areas where it is currently available.  They gave me a price that was more than double Bangor’s (calculator here).

Then there is the troubling number of how much is it going to cost me to convert to natural gas, linking me to a national pipeline used by millions of other people and which leaks periodically.

I looked this up online.  There’s a lot of information, but it’s about as clear as mud.  Here is the exact paragraph, lest anyone think I’m trying to make things more confusing than they are.

“For homeowners, the cost to convert from oil to natural gas can run anywhere from $1,000 to replace a burner assembly to $6,000 to replace the entire furnace, according to Eric Earnest, vice president and chief operating officer of Summit Utilities Inc., Littleton, Colo., the parent of Summit Natural Gas of Maine. However, there is some help available. The Maine Public Utilities Commission has approved a conversion incentive plan for Summit that provides up to $1,500 per customer in rebates, or up to $2,000 in a community that gives Summit property tax relief. Customers in the state’s Low Income Home Energy Assistance Program can get up to $4,000. There also is up to $750 available for energy audits and basic home energy conservation work.”  (article here)

Ok, so it will cost me anywhere from 1 to 6 thousand dollars to convert. But I might get a rebate of some amount, but that’s not clear.  It’s also not clear whether I’ll need to replace my furnace or just my burner assembly.

In my best case scenario, I only have to replace my burner assembly, and I might even get a rebate.  Then, starting next year I can start saving between 600-1200 dollars for heat, depending on which estimate I believe.

But this brings to mind certain confounding factors.  I know the natural gas line went in literally two houses over.  But will the gas company pay for tearing up the sidewalk and laying the line to my house, or is that in addition to the cost of replacing my furnace?  What’s my total cost for everything going to be, and who is going to service my furnace once I’ve converted to natural gas?  I don’t know about you, but I like Augusta Fuel because they have saved my bacon enough times on a cold night that I got the full coverage plan.  Am I to assume that now I’ll be calling Summit or Maine Natural Gas if my furnace isn’t working, and how long have they been doing what they’re doing?  Oh, that’s right, they just got here.  I have no idea what their customer service is like.

So those are my fears.  Let’s look at a really interesting graph from the Bangor Natural Gas site.  It looks like I need about 33 kwh of electricity to equal one therm of natural gas.  A therm will cost me…well, I don’t know.  I found this disturbing concept at Maine Natural Gas: “Customers have the opportunity to choose between two commodity price options: monthly Index Price Option (IPO) or a term of one or two-year Fixed Price Option (FPO). The IPO for November 2013 is $0.5650. Effective September 1, 2013 the FPO rate for one year will be $0.8344.” So it will cost me somewhere between 57 and 84 cents per therm.  I need to know how much the same thing would cost me in electrical heat.  84 cents divided by 33.  I’d be paying 2.545 cents per kilowatt hour of electricity to heat my home.  When I did the math on electricity versus oil, I came up with about 8 cents per Kwh (see post here, electricity wins)

But then we add unknown things like up to six thousand dollars in extra expenses.  That’s a difference of six to ten years to recoup the costs of the upgrade.  And we have no guarantees about customer service and follow up.  It’s getting cold.  I think I’m good this winter at least.  Maybe next year.


Electricity (MWH)

3,410 BTUs/kilowatt hour

Fuel Oil (gal. 000’s)

139,000 BTUs/gallon

Natural Gas (cu. ft. 000’s)

100,000 BTUs/therm.

LPG/Propane (gal. 000’s)

91,600 BTU/gallon

Coal (short ton)

24,580,000 BTUs/short ton

Purchased Steam (BTUs)

1,000 BTUs/pound


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