The price of oil continues to skyrocket. So far, other energy has failed to follow suit. Prices vary, but the following is an approximate comparison, in my area, of various fuels based on energy content of one million BTU:
Crude oil $14
Fuel Oil $16
Gasoline $19
Natural Gas $8
Propane $25
Electricity $28
There is, of course, reasonable room for differences. Gasoline, for instance, is a derivative of crude oil. But it includes refining cost, transportation cost and road taxes. So, it makes sense that gasoline is more expensive than crude. But gasoline is up less than crude because refining margins have declined substantially in the past few months.
Natural gas is essentially a local market, rather than world market, because it has very high transportation cost and often, transport restrictions. So, supply and demand in the local markets is dictating lower prices in many places. In some, such as the overthrust area of Wyoming, limited transportation to major markets is keeping prices much lower.
Electricity, though it looks more expensive in the above comparison, is a higher form of energy. This means that for work applications (horsepower) it has an efficiency on the order of 3 times that of the other fuels. This factor also applies to heating and cooling applications where a heat pump is used. So, for these applications electricity is relatively low cost, at about $9/million BTU. This is a result of high efficiency power plants and its generation largely from low cost coal, nuclear and natural gas. For many applications, electricity is a relative bargain right now.
With the difference in prices, fuel switching seems to be an option. Unfortunately, there are not many viable ways to switch fuels for the typical consumer.
Unless you are ready to spend tens of thousands of dollars on a new car your switching options for transportation are essentially non-existent.
Around home, you have a few more options. If you use propane for heating, a switch to an electrical heat pump looks viable. Even a small resistance heater used to heat a small area rather than the whole house
seems to make sense. If you have access to natural gas, of course that is the best source for heating applications. You may want to check prices in your area to see if switching fuels is a viable option. There is a great article on http://www.energyboomer.com/ that does the calculations for you to help compare fuel costs for propane, fuel oil and electricity.
All that said, there is enough potential for fuel swapping that it seems likely that energy prices will tend to move in the same direction. Right now, that is upwards. But your best bet to reduce energy costs is probably to reduce usage. Carpool, group errands in a single trip, stay home more. Turn down your thermostat. Most of all, this is creating a bonanza for investing in efficiency improvements around your home. Examples include high efficiency appliances, lighting and heat and cooling, as well as upgraded insulation and weatherstripping. Check out articles in my archives or search the internet to find a huge assortment of investments with great returns. Help is available on http://www.eere.energy.gov/consumer/your_home/energy_audits/index.cfm/mytopic=11160 to identify and evaluate investment options. If you don't feel comfortable doing the evaluation yourself, an energy auditor probably can identify and evaluate options worth hundreds of dollars per year, and his fee can likely be repaid by svaings within a few months.
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2 comments:
Thanks for the kind words about my blog.
The easiest fuel switch for folks to do is to electric from heating oil or propane.
By heating just the rooms that you actually use up to comfort temperature with electric space heaters and letting the central heating keep the pipes from freezing in the rest of the house you can save money.
It is possible that the cost of oil and propane will go so high this winter that it will be less expensive to use all electric.
Energy Boomer
You are right that the switch from oil or propane to electricity is the quick, easy route. And that is probably the way to go if current prices are a short term phenomenon.
But if these prices persist or rise further, either solar heat or heat pumps will become the way to go. Even perhaps ground source heat pumps. I think all are highly attractive investments today. How else can you cut your heating bill by 50-75% with an investment of a few thousand dollars? These investments can have double or even triple digit returns.
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