Ó{ÊU "
&
ENERGY
N@K? JK8K< 8><E:@<J @E D8JJ8:?LJ<KKJ#
NewYork and other states introducing plans
to expand natural gas infrastructure and
convert customers to natural gas heating,
Oilheat associations are pulling out all the
stops to defend their member companies.
In Massachusetts, the state Department
of Energy Resources (DOER) last year
launched a study of possible natural gas
expansion as a way to help the state comply
with the Global Warming Solutions Act
that the state enacted in 2008. That law
requires the state to reduce greenhouse gas
emissions by 25 percent from 1990 levels
by 2025 and by 80 percent by 2050.
As a stakeholder in the process, the
Massachusetts Energy Marketers Asso-
ciation filed a report with the DOER in
December that was prepared by Richard
Sweetser, of Exergy Partners.
The report lays out a scientific case
for Oilheat, explaining how it benefits
consumers and the environment at least as
much as natural gas. Here is a look at some
of the report’s key findings.
:FEM<IJ@FE :FJKJ
The report points out that switching
a home from an oil-fired boiler to a gas
boiler is a costly proposition that involves
boiler replacement; chimney replacement
or relining; a gas main; service line exten-
sion and meter set; gas water heater; and
removal and disposal of the fuel storage
tank. The report estimates conversion costs
at $18,783
(see table below).
The report evaluates the relative heating
expenses in identical homes using oil and
gas and concludes that gas heating requires
more energy per BTU than oil heating in
non-condensing appliances because of the
higher hydrogen content in gas.
A condensing gas boiler would offer
higher AFUE efficiency than a non-
condensing oil unit, the report states, but
condensing boilers are unsuitable for many
Massachusetts homes. That’s because most
existing residential hydronic loops were
designed based on high return water tem-
peratures and do not allow for condensing
during most operating conditions.
The report introduces the concept
of an “economic indifference curve” to
illustrate that even with today’s reduced
natural gas prices, most consumers would
be indifferent to the prospect of swapping
out a non-condensing oil system for a non-
condensing gas system, due to inadequate
financial reward.
The report also cites statements from
Oilheat customers who were surveyed by
Sussex Energy Advisors, the contractor
who drafted DOER’s preliminary gas expan-
sion report. The following are four of the
customer comments:
“Unless there is some incentive
that can pay it back in 2-3
years, forget it.”
“My formula is this. If it’s paid
back in savings in 5 years or
less and cost less than $15,000,
then I will deal with it.”
“If you really save me 50% on my
energy bill and it cost less than
$10,000, it will be worth it.”
“I had my furnace replaced in my other
house when they brought gas to my
neighborhood. What a mess. It was late
spring. My yard was ripped up, mud
all over the house from the workers,
they had to cut up my old oil tank, days
of cleaning up after they left. In the end
it was well worth it, but what a mess.”
Fifty-four percent of the consumers
surveyed by Sussex rated fuel conversion as
very difficult or somewhat difficult. “This
means that the economic indifference curve
must be viewed with a bias toward not con-
verting,” the Exergy report states.
=LKLI< E8KLI8C >8J GI@:<J
The Exergy report goes on to examine
the notion that today’s relatively low natural
gas prices will be sustained over time. Since
2003 when the U.S. Energy Information
Administration (EIA) began projecting
prices out to the year 2025, there has been
a significant turnaround in the agency’s
projections.
Between 2003 and 2009, EIA’s estimate
of the 2025 natural gas price increased by
56 percent, and by 2013 the projection had
returned back to the same level projected
in 2003. This indicates a low correlation
between projections and actual prices, the
report states.
Low natural gas prices that have
occurred in recent years have led to more
natural gas use for power generation and
the development of export facilities to send
natural gas overseas, where prices are much
higher. The report predicts that natural gas
prices will climb as a result.
:fjk <jk`dXk\j
E\n >Xj 9f`c\i
/#'''
KXeb I\dfmXc I\d\[`Xk`fe
,''
:_`de\p Lg^iX[\j
(#,''
@e ?flj\ >Xj G`g`e^
)#'''
;?N @e[`i\Zk ?N KXeb
)#,''
>Xj J\im`Z\ C`e\ Xe[ D\k\i J\k
+#)/*
KfkXc :fem\ij`fe :fjk
(/#./*
F`c kf EXkliXc >Xj :fem\ij`fej :fjk <jk`dXk\j
DXb`e^ k_\
:Xj\ ]fi F`c_\Xk
Associations file reports
refuting the value of
fuel conversion
ivi`}Ê"
i>Ì
