Comparing Oil and Gas Heating

Published on: October 3, 2013

Choosing a new furnace also requires choosing the type of fuel that will be used to provide heating. The two most common choices are fuel oil and natural gas. Oil and gas both provide excellent levels of heating and are reliable sources of indoor comfort. However, there are significant differences between the two that give natural gas heating the advantage over oil heating.

Equipment Price

The initial investment in furnace equipment and installation varies depending the type of fuel used, but you can reliably expect oil-burning furnaces to be less expensive than gas furnaces. In some areas, a gas furnace may cost 10 to 25 percent more than a comparable oil-burning model. However, fuel price and availability, system efficiency, and maintenance needs are factors that make gas heating a better bargain in the long term.

High-efficiency furnaces
are more expensive to purchase, but the cost of the furnace can be recouped in a relatively short time through significant monthly savings on fuel bills. There may also be local incentive programs, rebates, or federal tax credits available to help offset the costs of converting to a high-efficiency heating system. Converting from oil heating to gas heating requires the purchase of new equipment, but doing so gives you the opportunity to invest in a high-efficiency system.

Fuel Prices

Which is cheaper, gas or oil heating? Several factors influence the answer to this question, but gas heating is usually much cheaper than oil heating.

Oil prices tend to fluctuate significantly. This can be influenced by factors such as availability, refinery capacity and transportation complications. Sociopolitical factors such as unrest or violence in the Middle East, where much U.S. oil comes from, can significantly affect oil prices.

Natural gas, in contrast, tends to maintain relatively steady prices without huge spikes in costs. Much of the supply of natural gas is produced domestically in the United States and Canada, which eliminates potential price spikes due to social or political turmoil.

Industry estimates suggest that the price of oil heating can easily be three times the cost of gas heating. This is the main reason why gas furnaces account for about half of the fuel-burning furnaces in use in the United States today. 

Fuel Availability

Oil supplies can be influenced by factors that are beyond the control of consumers. Transportation problems, broken pipelines, delivery slowdowns, or troubles in the Middle East can strongly influence both price and availability of oil.

On the other hand, the supply of natural gas remains consistently high with little current concern for shortages. Unlike oil, there is usually plenty of natural gas available to meet demand.

Your choice between natural gas heating and oil heating will be affected by the availability of these fuels in your area. Oil is commonly available and is delivered by truck and kept in a large storage tank on your property. If there is no oil supplier in your community, fuel can be easily brought in from a nearby area. Gas is delivered through local utility companies, and if there is no local supplier, you might not be able to opt for gas heating. Even if there is a supplier, you will have to make sure your home has the proper utility connections and supply pipelines to carry gas into your home.

Fuel Efficiency

Efficiency is a major concern for many homeowners. Higher-efficiency furnaces produce consistent heating at a lower cost. They make better use of the fuel burned to produce heat and waste less fuel and energy. High-efficiency furnaces can slash heating costs while still providing excellent levels of indoor comfort.

Furnace efficiency is indicated by the unit’s AFUE (Annual Fuel Utilization Efficiency) rating. AFUE indicates how much energy in the fuel is converted to heat when the fuel is burned. An AFUE 90 furnace, for example, will capture and use 90 percent of the energy in the fuel, while the other 10 percent is lost through the exhaust process.

Oil provides more heat per BTU than other fuels. Even so, gas heating provides the greater levels of fuel efficiency.

Maintenance Needs

Both oil and gas furnaces can be easily serviced by HVAC professionals. However, gas burns cleaner and produces fewer emissions. Oil furnaces can suffer from accumulations of soot and dirt build-up in the chimney and the furnace itself.

Contact AC Southeast® today for help finding heating contractors in your area. Your local HVAC specialist can advise you on whether oil heating or gas heating is the best option for your home and can provide you with the equipment and services you need to install a new or upgraded furnace.