Understanding Your Heating Fuel Options

by Emily Guy Birken · 6 comments

It’s that time of year again. Even the most frugal of homeowners is turning up the thermostat as the weather starts its yearly winter onslaught. This also means that my husband and I have begun our yearly “discussion” over better ways to heat our home. As someone who is always cold, I would certainly love to find a cheaper option than the natural gas we use so I could keep the thermostat higher — although I don’t want to do any extra work or more harm to the environment. And there’s the rub! Each heating fuel option offers various positives and negatives, from cost to maintenance to environmental factors. Here’s a quick run-down of what you can expect from each heating fuel option:

Natural Gas

How It Works
You will only find natural gas heating in highly-populated areas, as it requires the gas company to lay and maintain pipe for each residence, which is not realistic for rural homes. The gas is combusted, and the heat from the combustion either heats water for radiators or radiant floor heating, or it heats air for forced air heating. Most Americans get their heat from natural gas.

Natural gas is a plentiful domestic resource, which means we do not need to worry about foreign politics affecting its price. It is also relatively cheap. According to the website pelletheat.org, the cost per MMBTU (one million British Thermal Units) is under $18. Finally, it’s environmentally cleaner than some other non-renewable options. All around, sticking with the natural gas that you probably already use is not a bad option.

If you long to live closer to nature, natural gas is not for you, as you won’t have a pipeline to a home outside of a major urban area. Also, though this option is relatively eco-friendly, it is not carbon neutral. The process of burning the natural gas releases trapped carbon, which does add to your carbon footprint.


How It Works
Often, individuals who cannot get a natural gas line will turn to oil heating. In this case, you will need to keep your heating oil on-site in a tank, and you will need a service to deliver more oil to you as necessary. As with the natural gas, you burn the oil to heat either water or air to warm your home.

As long as your oil tank is full, this is a fairly low maintenance system. This is also a “portable” type of heat—meaning, if you can get a tank of oil to the place you want to heat, and if the home’s set up for oil, then you can have heat.

The biggest downside to oil heating is that it is coming from unstable sources (i.e., the Middle East), so prices can fluctuate rapidly based on circumstances completely outside of American control. Currently, you can expect to pay over $30 per MMBTU for heating oil. In addition, burning oil results in higher particulates, which is bad for respiratory health and can be an environmental concern. Finally, you must have a large tank somewhere near your home to hold the oil, which could be an aesthetic issue.


How It Works
Propane is very similar to oil, in that you also need to keep a tank of the fuel on your property and need someone to deliver you new propane as you run out. It is also burned to heat water or air.

Unlike oil, propane comes from a domestic source, which means its price is more stable—although stability does not necessarily mean it is cheap. The current cost is nearly $40 per MMBTU. In addition, it does not have the issue with particulates that oil does.

This is also a non-carbon-neutral option. In addition, like oil, you need to have a large tank near your home.


How It Works
These fuels include wood, wood pellets, and corn. When you heat your home with renewables, you burn the fuel in a stove that can be either indoors or outdoors, which then heats water or air to warm your home. You can either have your fuel delivered to you, or you can gather and chop wood on your own for free.

This option can be extremely inexpensive if you’re willing to do the work of gathering the fuel yourself. Even if you purchase wood at about $200 a cord, you’ll pay less than $17 per MMBTU. Environmentalists approve of these fuels because they are renewable, unlike oil and gas. Finally, depending on how your wood, wood pellets, or corn are processed, these fuels can be almost carbon neutral.

The biggest downside to these fuels is the amount of maintenance necessary. You will constantly need to feed your stove—or alternatively, you would need an enormous silo standing outside of your house with an auger feeding the stove. Either way, you still need to clean out the ash boxes, make sure the flames remain fed, and stay on top of maintenance of the entire system. In addition, the range of quality in stoves and burners is pretty vast, meaning you could end up with a dirty stove that belches hydro-carbons and soot. (Most natural gas burners, on the other hand, have similar levels of efficiency and combustion quality).

The Bottom Line

Although I appreciate the potential environmental positives of switching to wood-burning, I’m far too lazy to really want to make that switch. So I’ll stick with our natural gas — and throw on a couple of sweaters. But how about you? Would you be willing to switch if it meant a better environment? What if it costs less in the long run? Will you switch then?

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  • Kurt says:

    We use a combination of wood (70%), fuel oil (20%), and electricity (10%). One caution if you’re considering adding a wood stove or fireplace insert to allow you to heat with wood: Talk to your home insurance company first. Understand all the requirements you must meet to maintain insurance after adding a wood stove, and learn whether adding a wood heating system will impact your insurance premium.

  • Jean says:

    Yea if you’re in a city, it’s pretty much natural gas by default as it’s the easiest and cheapest available. It’s disheartening to read of its effect on the ground water and on our lungs but seems like there are no truly clean options.


  • Sherry says:

    Natural gas is one of the least green and safe options because it is being extracted by hydraulic fracturing, which damages the air and land and decimates the groundwater because of the chemical injected to get at the petroleum. The debris from all this then clogs the waterways and people’s lungs, leaving us without clean air and water. Industry would have us believe this “domestic resource” is safe, but it is far from it–and we don’t even have information about many of the “proprietary” chemicals that are used. Additionally, scientists agree that this process will get us enough gas for about 30 years, and no more–and it still amounts to burning greenhouse gases. Furthermore, chopping wood contributes to that as well, and destroys the ecosystem, in addition to being labor intensive. The greenest and best long-term options are truly renewable–wind, solar, hydro (if done responsibly). They are becoming more available at better prices, and anyone who has those choices would be best off going with one of them.

  • Thad P says:

    With new major natural gas supplies coming online in the USA (taking us from an importer to a major exporter of natural gas in less than a decade), prices should continue to fall. Sure wish that was an alternative here in rural Texas.

  • Young and Thrifty says:

    Good job breaking down the heating fuel options. Suppose you live in a city like New York with children… Oil and propane tanks seem hazardous and trees have more protection than people 🙂 Options are pretty much limited to gas

  • Marbella says:

    Wood is the best, cheapest and you get some conditioning to chop and stack the wood in the summer. In Sweden the forest grows more than what we reap in the form of timber, etc. so wood is cheap.

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