Update: This is a popular article written several years ago. While pricing may have changed the basic comparison still holds true today.
The answer to that question is pretty complicated when you sit down and think about it. For us I already knew we’d have propane in the house to cook with and for our direct vent fire place. For me one of my biggest concerns with oil was having an oil tank in my basement that could potentially leak some day.
The other big issue to consider was venting the two different types of fuel. An oil fired boiler would require either a direct vent out the side of the house (this is really ugly, stains the house and gets quite hot) or a traditional chimney. Today’s modern gas boilers allow you to vent the furnace through regular PVC pipe up through the roof or wall. To make a long story short I chose the gas boiler. The biggest reasons I chose it was the lack of an oil tank, the venting through the roof and the ability to have a high efficiency boiler.
One thing I really didn’t investigate all that much was a cost analysis of the two fuels. So after last winter and my rather high fuel bills I did some research on the comparison of the fuel costs. It’s not as simple as comparing the price per gallon of the two fuels. Currently (2007) where I live a gallon of fuel oil costs $2.69 while a gallon of propane costs $1.93. So on the face of it propane sounds like a huge bargain to the laymen. The real issue however is the energy that one gallon of each fuel can produce. Fuel oil can generate approximately 130,000 BTU’s while propane is approximately 95,000 BTU’s. However, most oil boilers average about 85% efficiency at best while the gas boilers can produce an efficiency of 95% or more.
Using this data I tried to come up with the cost per BTU for both types of fuel with the assumptions above.
FUEL OIL: 130,000 BTU * 85% / $2.69 = 41,078 BTU’s per dollar
PROPANE: 95,000 BTU * 95% / $1.93 = 46,762 BTU’s per dollar
So in this example the propane is slightly more cost effective. Now let me give a big disclaimer here. If you ask a bunch of heating folks most will tell you that typically oil is a better deal. It depends on so many variables and the actual equipment involved. For me what it tells me is the two fuels really are pretty similar in cost per BTU.
For me the fact that I’m burning a cleaner fuel, my boiler has almost zero maintenance, I have no oil tank to leak, I have just water vapor and carbon monoxide exiting my vent, and I needed propane anyway to cook with and run my fire place, the decision still seems to be the correct one for us. I encourage you to look at these issues next time you select a new heating system for your home.
Another PRO that is often overlooked with regard to using propane over oil is tank size. Typically propane users will have a larger tank than an oil user. Homeowners typically have 500 to 1,000 gallon propane tanks while most standard oil tanks are 275 to 400 gallon. On the surface this doesn’t appear to make a difference but it can have a huge impact.
I like to fill up my propane tank in the summer when fuel prices are historically lower than during the winter. The larger tank allows me to buy more propane at a lower price than I could if I was filling up the smaller oil tank during the summer. If you own a 1,000 gallon propane tank that can make a big difference at the end of the year.
Would you like a propane vs oil calculator (spreadsheet)? If so check out our Oil Vs Propane Fuel Calculator.
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Hi,
I work for a company that provides both heating oil and propane. Although your numbers are close, there are a couple of specifics I would like to bring up.
Oil is about 139,000 Btu. per gallon while Propane is actually about 92,000 Btu. per gal.
The emission from your vent includes carbon dioxide, not monoxide, although it may have a very tiny amount of carbon monoxide as a normal part of combustion. A smoking cigarette creates carbon monoxide! (Large amounts will occur only if it has been tampered with, is broken or not adjusted properly).
The factor of efficiency as you mention also needs to address variable capacity and boiler supply water temperature which can be done with the gas boiler and directly affect the use of fuel when demand is low. The best comparison I can offer is highway mileage in a small car vs a large car. When the boiler operates in low it is the most efficient, similar to the extraordinary highway mileage a smaller car can achieve over a larger. The boiler can ramp up and still provide full demand capacity when required.
Much more can be said about mixed return water and what can be done with each fuel etc. However the controls, labor, set-up and maintenance to achieve the similar savings using fixed capacity and even condensing oil equipment is so much higher that the tried and true gas equipment available today gets high marks from me right now.
Tom Grunstra
I'm glad you guys posted this thread. I just built a cabin/cottage in very cold country in Alaska.
There is no natural gas available at the cabin, so my choices are propane, electricity, and fuel oil. After weighing the options along with pros and cons, I went with Propane and Electricity and skipped the fuel oil.
Although Toyo oil heaters are extremely popular here, I don't care for the cost, maintenance, and the smell of the exhaust. The propane burns so much cleaner, and I'm happy with that.
I also have one fuel source for heat, cooking, and my on demand water heater. Electric heat is a supplement to the propane heat. I've found that once the propane stove brings the cabin up to temperature, a relatively small electric heater will maintain that temp quite easily. (I went big time on the insulation)
The price for either was close. Bulk propane is costing me $3.45/gallon and fuel oil is roughly the same in Alaska.
Since this is not a full time residence, I have resorted to "zone" heating using electric heaters to heat small rooms with the doors closed, and allowing other parts of the cabin to remain cold.
So far, my system is working out. Of course I have yet to get in to the cold part of the winter where temps of -20 to -30 are the norm.
I enjoyed all the information on this post that helped me along the way.
Thanks for sharing...can't wait to hear how the really cold weather works out!
Hi, I've been wondering about whether I should get a oil or propane heating system for my home which we just broke ground for in Columbus, Ohio. I was leaning propane, but this article helped me come to a final decision. Thanks
-will
http://www.homebasecolumbus.com
Thanks for this! I just had a sales guy tell me that a gallon of oil and a gallon of propane provided the same BTU's and I didn't think he was right.
We did decide on the gas system to replace an existing oil system due to the higher efficiency system and the lower cost per gallon of the fuel. Seems that the cost of propane is not rising quite as quickly as the price of fuel oil right now.
Although the salesman was not right on the BTU's per gallon thing I still feel that the gas was the right choice for us.
Typically I agree with you. However, propane may not always be cheaper. For me the biggest benefit was not having two fuels in my house. We use propane to cook, grill and in our fireplace so the decision was easy for me.
It is interesting to note that no one has mentioned the source of the fuels. It is my understanding that we import 70% of our oil and that this country has vast reserves of natural gas. This would be one application in which we could reduce our dependency on foreign oil.
Just to clarify, propane is a by product of oil, where as natural gas comes from the ground directly. As the price of oil goes up propane conversly goes up too. Natutal gas is only available in areas where a utility company pipes it in.
Propane is a by product of natural gas not oil.
Actually, propane is a by-product of both natural gas processing and the refining of oil. Since the U.S. is the "Saudi Arabia of natural gas", about 90% of our propane is domestic, about 7% comes from Canada.
Like these other comments I am also in a position to decide to stay with oil or switch to propane for my home heating as I need a new furnace and I too have use propane for the stove/dryer. My question is it safe? I have read stories of home explosions from gas/propane . .
If you're already using propane in your home I would argue there is no increased risk. In fact, having a contractor come in and install a new propane furnace would ensure that your current gas lines are checked and evaluated for the new furnace. Today's gas lines are typically run with a continuous piece of pipe which limits the number of joints and leakage potentials. Most of the explosions you hear about on the news are due to natural gas lines that are hit during excavation outside a home which causes gas to leak into the home. I can't decide for you but I feel it is safe for my young family.
Hi
Just my two cents here. If you can live without ac I highly reccomend radiant heat using an instant hot water heater that uses propane. If you are building new get your 1/2 inch special pex lines in your floors concrete or wood in 300 foot loops, I have four loops heating my ground floor which is cement, no basement because were on a hill in the woods. Make sure you go propane because oil boilers heat to180 degrees and has to be tempered (cooled) and that's just stupid, most instant hot water heaters heat between 110 and 140 degrees which is ideal, mine is set at 120. These compact gas instant hot water heaters also come in natural gas versions. You can also use these heaters in baseboards and air handlers if you are resoursefull because you can get more heat out of the heaters to do so. Sorry this really a summary, any questions email me, I'll try to help you out. Rob at humblpie@yahoo.com
To correct what was said earlier...Propane does not come from domestic sources (for the most part), it is derived as a by-product of the oil refinery process. So indirectly it is imported just like fuel oil.
Not so today. The US has become one of the world's largest producers on Natural Gas, which propane is striped out of. Problem is getting propane to the areas that now rely upon heating oil. Our obsolete shipping laws prevent LPG from being economically shipped by sea from the producing areas (US Gulf) to the consuming areas (New England)
Prices haven't changed much here in NH....nothing has changed to alter this article.
I'm glad I found this. I too have been looking at oil vs. propane.
After pricing a geothermal system at 40k (!!!!) we were left with these two options. Since we have propane already for hot water and cooking this is a no brainer after seeing the numbers.