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Re: New Gas System or Replace Oil Tank?

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Posted by dana on August 18, 2008 at 16:30:54:

In Reply to: Re: New Gas System or Replace Oil Tank? posted by HeatPro on August 15, 2008 at 21:42:34:

: I agree with almost all of the post.

: The one thing that politicians won't and can't say, because they can't handle the truth is that there are 24 billion barrels of oil in this country while we burn 6 billion barrels a year.

: Alternative soy oil or that made by other processes costs $2.50 to make per gallon, so $3 indoesn't leave much. No matter which oil cartel controls what, India and China will buy all the oil it can at any price. Don't look for $3 oil any time soon, if ever. Look for the price of oil to rise again after the election.

: The benefits of oil heat remain the same and more:
: 1. you get to own it, not subject to gas utility delivery.
: 2. the future oil will be bio-fuel with no toxicity other than drinking too much of it.
: 3. you don't worry about rocky soil stopping you from delivery as with gas.
: 4. Oil won't blow up.

It's a complicated market but at $50+/bbl oil spending on the capital equipment for swapping to other fuels is economic against a whole range of other fuels (from mundane to exotic), it's simply overpriced. The longer the price stays high, the greater (and more permanent) the demand erosion becomes. China's oil consumption is down 7% over the past 6 months and will likely continue to remain low in the short term until prices adjust. (There may be a small demand blip in China right after the Olymics though.) By the time worldwide demand erodes 10-12% the price will crash just like in 1983, but it's not likely to remain low for 20 years again- we'll see $5+ heating oil again too (and much sooner than we'd like!)

Liquid biofuels are problematic,less from a cost per gallon point of view than that of scale. The conversion-efficiency of incident-sunlight to liquid fuels is well under 1%, but the most-promising future versions (oil-bearing algae), may eventually squeak barely over the 1% mark. (Compare that to ~50% for a solar-hot water panel, or 15% for current-technology photovoltaics.) Even with best-case projected bio technology, the size of the pond/farm etc for producing enough liquid fuels to supply current levels is unsustainably large. End-use efficiency needs to increase very dramatically in order for liquid biofuels to make a significant difference. Counting on bio-based heating oil to fill in the gap in the face of high demand for liquid fuels in the transportation sector is a dubious gamble at best. Since home heating isn't dependent upon liquid fuels the same way the transportation sector is, it's a good be that it'll be cheaper to not compete with that, use other fuels (natural gas, wood pellets, etc.) In a decade there might be minimal easing of the automotive demand for liquids as electric cars gain market share, but even those are likely to be flex-fuel hybrids for decades to come. All heating fuels will continue to be cheaper than oil, bio or otherwise.

But regardless of the fuel, boosting end-use efficiency will be critical as worldwide energy demand will continue to rise for some time to come. Repairing an antique oil-fired steam home heating plant (even the tank) seems like a lousy investment. If cash is tight, a retrofit natural gas burner can get you through a few seasons until you've figured out what you REALLY want to do going forward, but keeping the steam boiler is likely to be a losing proposition in the intermediate & long term.

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