October 27, 2013

More Maine homeowners use propane for heating fuel

They're turning away from oil as their primary heating source.

By Clarke Canfield
The Associated Press

As prices become more competitive, Maine homeowners are increasingly turning away from oil as their primary heating source and using propane instead.

click image to enlarge

Propane is delivered to a home in Falmouth. As the leaves fall and the temperatures drop, a growing number of Mainers will be heating with propane. As U.S. propane production increases, prices are likely to come down.

The Associated Press

Ralph Twombly recently decided to replace the oil-burning furnace at his Cape Elizabeth home with one that uses propane. He expects his heating bills to go down only slightly this winter but anticipates greater savings in the years ahead if prices drop as supplies increase.

The number of houses in Maine using propane has grown from 33,000 to 41,000 over the past five years – an increase of 24 percent, according to the U.S. Census Bureau. At the same time, the percentage of Maine homes using oil for heat has fallen from 75 percent to less than 69 percent.

Propane, Twombly said, is quiet and efficient and reduces his carbon footprint. He likes that the gas comes from the U.S. or Canada rather than overseas and that the price isn’t as volatile as oil has been in recent years.

If natural gas lines are extended to Twombly’s neighborhood, his propane furnace – unlike oil – can easily be converted to natural gas, which offers even lower prices.

“When you consider the likelihood of natural gas and the anticipated fall of propane prices, it makes sense,” said Twombly, who had his new furnace installed this month. “So we bit the bullet.”

A higher proportion of Mainers use oil as their primary heating source than in any other state, but little by little the numbers have been tumbling as homeowners turn to wood pellets, natural gas and other fuels.

Propane pricing has become more competitive in the past two years, said Patrick Woodcock, director of the Governor’s Energy Office. Based on current prices, propane and oil are roughly comparable in cost, he said.

“At the same time, increased natural gas supplies are anticipated to continue to push pricing of propane closer toward natural gas prices,” he said. “It is a versatile fuel and may provide additional stability in pricing as a result of the fact it may be derived from both natural gas processing and crude oil refining.”

Downeast Energy, a Brunswick-based oil and propane dealer, has been installing more propane furnaces these days than in years past, said Chris Kowalski, the company’s marketing manager. When oil furnaces are due to be replaced because of age, Downeast is encouraging customers to look at propane.

A new propane furnace is more expensive to install than an oil model, he said, but it can be cheaper to run. Propane is also more efficient and versatile than oil and able to be used for cooking, fireplaces and emergency power generators, Kowalski said. With propane, homeowners can eliminate the concern of having an oil tank in their basement and cut down on pollutants from oil.

Nearly all new construction in New England is going to natural gas where it’s available or propane where natural gas lines have yet to be built, said Joe Rose, president and CEO of the Propane Gas Association of New England, based in Epsom, N.H.

Propane prices used to track crude oil prices, Rose said. But more than 70 percent of the propane nowadays is a byproduct of natural gas processing, meaning prices are more in line with natural gas.

The U.S. has become a net exporter of propane, and as natural gas production increases in the years ahead, propane supplies will follow suit, he said.

“It will depress prices,” he said, “as well as encourage exports.”

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