Fuel Oil vs. Propane?


  #1  
Old 12-06-09, 04:05 PM
M
Member
Thread Starter
Join Date: Sep 2009
Location: U.S. Midwest
Posts: 1,339
Received 0 Votes on 0 Posts
Fuel Oil vs. Propane?

Here in the Midwest, people use natural gas - if it's available, which it is in most cities, towns, and surrounding areas. In the Northeast, it seems that fuel oil is used if natural gas isn't available, but here the preferred alternative is propane (LP gas). Why the difference?

I know that propane appeals to some people that expect they may eventually get natural gas - converting a burner to gas is usually a simple matter. But, here, even out in the boondocks, where gas will likely never come, people use propane.

A big Midwest energy user in the fall is corn drying. Natural gas is preferred, but propane is the second choice. (Probably, if oil were used for grain drying, it might make your breakfast corn flakes taste strange )
 
  #2  
Old 12-06-09, 04:33 PM
NJT's Avatar
NJT
NJT is offline
Member
Join Date: Oct 2006
Location: USA
Posts: 23,538
Received 7 Votes on 5 Posts
I think it almost always comes down to supply and demand.

I suspect that since it seems most of our oil comes in on barges from far away lands, I'm guessing that most of the refineries are near those ports. From that point, delivery is by truck.

Now, where does the gas come from? (I don't know!) Are there gas reserves near you? I know that alot comes down from AK... and up from TX... are the processing plants closer than the ports?

Economically speaking, how does LP fare BTU to BTU / $ to $ with #2?
 
  #3  
Old 12-06-09, 04:45 PM
D
Member
Join Date: Aug 2009
Location: USA
Posts: 4,946
Received 0 Votes on 0 Posts
I poked around on the web for where it comes from. Approx. 60% of LP comes from natural gas processing and 40% comes from oil refining.

With that said, the DOE says the Gulf Coast and the Midwest are major supply sources. So I suspect that the price of propane is less in the Midwest than in the NE, and the price of fuel oil is probably cheaper in the NE than the Midwest.
 
  #4  
Old 12-06-09, 05:14 PM
M
Member
Thread Starter
Join Date: Sep 2009
Location: U.S. Midwest
Posts: 1,339
Received 0 Votes on 0 Posts
Yes, I'm sure it all comes down to cost. But the funny thing is, I don't think too many people here, or maybe anywhere, sit down and work out the numbers. They use gas because everybody here uses gas...etc. Well, acutally, I do know that natural gas is currently the lowest price it's been for quite a while - around $4 per million Btu, plus dilivery charge.

I think most of the Midwest's gas comes from the Gulf Coast area, but some comes from Canada, too. The availability of pipelines probably makes a difference. Maybe even propane comes in via pipelines? Building a pipeline is probably easier here: draw a straight line on a map between Point A and Point B, and start digging
 
  #5  
Old 12-06-09, 06:34 PM
F
Member
Join Date: Mar 2006
Location: Wet side of Washington state.
Posts: 18,495
Received 36 Votes on 28 Posts
Gas, be it natural or LP is almost always cleaner burning than oil. The equipment to burn gas is usually simpler than oil burning equipment which generally makes gas-burning equipment lower priced than similar oil-burning equipment.

In Washington state we have at least two refineries and all natural gas is piped in so you might think that we would have more oil-burning equipment than gas. Nope, whether in the commercial, industrial or residential market there are far more gas installations than oil. I don't know the exact ratio but it wouldn't surprise me to learn that it is close to 75% gas to 25% oil.
 
  #6  
Old 12-06-09, 06:59 PM
NJT's Avatar
NJT
NJT is offline
Member
Join Date: Oct 2006
Location: USA
Posts: 23,538
Received 7 Votes on 5 Posts
Propane Weekly retail price

Looks like us poor saps in NJ have to pay around twice as much as all y'all in the midwest... current average around 3.16 / gallon.

In fact, NJ is the highest for LP on the chart.

#2 Heating Oil retail price

We pay more for #2 also, but the difference isn't quite as large.

Fuel oil is about 50K BTU for a buck.

Propane is about 30K BTU for a buck.

Then for LP there are tank rental fees, delivery fees, and other nickel dime costs.

Fuel oil of course has higher equipment maintenance costs, so between the 'other' costs, it might be a wash.
 
  #7  
Old 12-06-09, 07:05 PM
D
Member
Join Date: Aug 2009
Location: USA
Posts: 4,946
Received 0 Votes on 0 Posts
Natural gas is definitely cheaper than fuel oil and the price is less volitile. That's probably why there is a preference of natural gas in areas where it is available. I don't think I've heard of anyone using fuel oil if the have natural gas piped into their house unless the gas was installed after the fact.
 
  #8  
Old 12-06-09, 07:06 PM
NJT's Avatar
NJT
NJT is offline
Member
Join Date: Oct 2006
Location: USA
Posts: 23,538
Received 7 Votes on 5 Posts
One thing I find really bizarre...

The WHOLESALE price for LP is durn near the same across the US, around 1.25 / gall. Yet, here in NJ, the current retail average is 3.16 . I'd bet that one of our politicians brother in law is a propane retailer.
 
  #9  
Old 12-06-09, 07:32 PM
F
Member
Join Date: Mar 2006
Location: Wet side of Washington state.
Posts: 18,495
Received 36 Votes on 28 Posts
I notice that chart completely ignores everything west of the Rocky mountains!

Back when I had a truck I converted it to burn propane. I found that propane for motor vehicles was about half the cost of propane for heating purposes. It didn't matter how much I bought or how it was transported from the bulk station where I got it. I could buy 20 gallons in a couple of forty lb. tanks and if I said it was for my truck it was half the cost it would have been if I said it was for my boiler. The only way the dealer knew it might be used in a vehicle is that my tanks had a liquid draw valve rather than a vapor draw valve.
 
  #10  
Old 12-07-09, 06:15 AM
O
Member
Join Date: Dec 2007
Location: A Galaxy From Afar
Posts: 421
Received 0 Votes on 0 Posts
Originally Posted by furd View Post
Back when I had a truck I converted it to burn propane. I found that propane for motor vehicles was about half the cost of propane for heating purposes.
Most likely there was a government subsidy for the use of a "clean burning fuel" in a motor vehicle.

Al.
 
  #11  
Old 12-07-09, 06:33 AM
F
Member
Join Date: Mar 2006
Location: Wet side of Washington state.
Posts: 18,495
Received 36 Votes on 28 Posts
Nope, no subsidy. I had to pay the Federal highway tax although the state tax was not applied. Instead I was required to have a special permit from the state that added either fifty or seventy-five dollars to my license cost.

I asked the owner of the company once and his reply was that it was cheaper because he could sell more as motor fuel than as heating fuel. I kind of doubt that because he had several delivery trucks and serviced a fairly large rural population for heating purposes. I know that my forty gallons a month sure wasn't anything compared to a hundred gallons a month heating some farmhouse and maybe a chicken coop.

I asked at a different bulk station if they were subsidized by any government program to promote clean burning fuels, thinking just as you did and the answer was no. I was told just as at the first station that it was because they sold more for motor fuel than for heating purposes. At the welding shop or the local gasoline station they made no distinction as to motor fuel or heating fuel.
 
  #12  
Old 12-07-09, 11:38 AM
G
Member
Join Date: Jun 2008
Location: Vermont
Posts: 104
Received 0 Votes on 0 Posts
Some people may prefer LP over oil because it can be used for more than just central heating equipment. You're probably not going to run your oven, clothes dryer, and backyard grill on fuel oil.
 
 

Thread Tools
Search this Thread
 
Ask a Question
Question Title:
Description:
Your question will be posted in: