A First, Gas Heated Homes Outsell Oil
David Bates / June 25, 2013-10:31 am
A review of 2013 single family sales through the first four months of the year reveals that for the first time in MLS history, gas heated homes outsold oil heated homes, 43% to 42%. This is a stark difference from 2007, when during the same time period oil heated single family sales had a 7% lead over gas heated single family sales. Since then, increasing economic and environmental concerns helped natural gas chip away at the difference. In addition to being less expensive, there are numerous other benefits of natural gas versus oil, including that it is more efficient,uses less of the earth’s resources, produces significantly less CO2 emissions, produces virtually no sulfur dioxide, it’s not stored in storage tanks, it doesn’t need truck delivery every 10 days or so, and more than 80% of the gas is domestically produced.
Kevin Kelliher of Lundgren Management is a good example of people seeing the benefits of natural gas. Running a property management company, he used to look at heating oil prices every day. He says he was on “pins and needles about what the market would do” and how it would impact the condominium associations his firm managed. According to Kevin, the final straw was the 2007-2008 heating season, a time when the costs of heating oil seemingly got out of hand, going up on average from $2.38 a gallon to $3.24 a gallon, a nearly 40% increase over the previous season. Around that time, he presented the financial benefits of switching over to one Boston association’s trustees noting that “Currently natural gas costs 1/3 less than oil,” and because Keyspan was offering free, new energy efficient equipment (steam boilers), it meant a savings of around $50K-$60K in capital equipment. Kevin pointed out that even though it would still take a $65K investment by the association to effect the change, if the differential between gas and oil remained the same, the payback would only take 2.5 to 3 years. It did and as a result, Kevin estimates that association has since saved more than $600K in heating costs.
A chart from the Department of Energy Resources, shows the average price of heating oil in the 2012-2013 season was $3.97. That’s more than three times the cost of the 1999-2000 season, when heating oil cost 1.31 a gallon. The more that oil prices rise, the more homeowners switch to gas. Since 2007, Lundgren Management has switched a dozen associations over from oil to gas and seen the cumulative oil consumption in these association go from 800,000 gallons annually to just 5,000 gallons annually. Yet, the biggest changeover is yet to come and most likely a result of the “Energy Reporting and Disclosure Ordinance” recently passed by the city of Boston, the purpose fo which is “to reduce the emissions of air pollutants, including greenyhouse gases, from energy production