What Price Warmth? Heating Oil Up, Natural Gas Down

As the New England winter hits mid stride, the price of heating a home comes to the forefront. Energy experts say heating oil prices this winter will be the highest ever, while natural gas prices will come down a little.

According to a recent New York Times article, the cost to heat an average home in the Northeast this year with heating oil will be as much as $2,300, while heating the same home with natural gas will be $700, and with electricity $950.

But in Middletown, if you live on a street with no gas main line—like I do—you may have no choice but to keep paying the high price for heating oil, which is averaging $3.81 per gallon this week, according to the State of Rhode Island Office of Energy Resources

“As you get down into the lower elevations in Middletown, where there is a higher water table, those are typically the areas of town where there is no gas service because of the potential for flooding the gas main,” says David Graves, media relations officer for National Grid. “Also, there are some housing areas that have been built where the developer decided not to have gas made available.”

Graves said National Grid has 7,900 electric customers in Middletown (6,500 residential, 1,400 commercial), but only 3,000 natural gas customers, possibly a reflection of how much of town does not have access to gas lines.

Ouch! $22,721 to install a gas line on my street

Even if you live in a part of town where flooding is not an issue, installing gas lines may be impossible because of the expense. For example, in my particular case—a dead end street off of Miantanomi Avenue—National Grid said a 275-foot-long, 4-inch gas main extension down my street would cost me $22,721. The company does not pay the cost of running new gas main lines, because the construction cost is so high, it takes years for the company to recoup the costs, according to Graves.

As a consumer, I certainly can’t afford the $22,721; even if all five of my neighbors decided to go in on it with me, it would still be an expensive outlay—and that’s just to run the gas line down the street.

To switch away from heating oil also requires a new furnace/conversion, which homeowners typically only consider when an existing furnace is getting old. A plumbing contractor estimated it would cost me about $9,000-$10,000 to do a conversion from heating oil to natural gas—i.e., buy a new high-efficient boiler that runs on natural gas, and install all the tie-ins, including the one-time $800 charge from the gas company to tie in to my house from the street (that would be after I paid for the $22,721 line to be in the street in the first place).

By comparison, to simply replace an existing boiler with a new one that uses heating oil would cost $5,000-$7,000.

One other option is propane, which simply requires a tank—either above ground or underground. Propane is common in many other parts of the country as a home-heating source, and it’s starting to become more popular here because of its efficiency. “No one is putting in oil heat anymore,” says Peter Sherman, president of . “It’s either natural gas or propane. Propane heating systems are so efficient compared to oil,” he adds, noting that new propane systems are as much as 98% efficient.

An average 2-story, 1,800-square foot, well-insulated house might require 600 gallons of propane per year, according to Sherman, and that would translate to about $2,000 per year; the price of natural gas is currently $3.24 per gallon. A new boiler/conversion would be required to switch from heating oil to propane, just as it would be to switch to natural gas.

Sigh. Looks like I’ll continue my Yankee frugality at the thermostat for now—or prop up my feet on the ottoman next to the hearth and throw another log on the fire.

What about you?

Are you hounded by heating oil prices? Caught on a cul-de-sac with no gas line? Or have you simply developed coping methods that help you stretch every drop of heating oil in the tank? Tell us your story.