Switching from oil to gas heating is a financially "risky" proposition that "is one of the least effective ways consumers can reduce their energy bills," the Consumer Energy Council of America warned in a report released today.
The report by the Washington-based council was highly critical of recent studies by the American Gas Association and the Environmental Protection Agency on this subject. "The gas industry's media blitz to persuade heating oil consumers to switch from oil to natural gas -- and EPA's unwitting support of that campaign -- are seriously deluding consumers into thinking that gas is their best bet," Ellen Berman, the council's executive director, said.
However, the council study, like those it criticizes, is highly dependent upon an assumption about how fast the present price gap between oil and gas will close. Controls on natural gas prices are supposed to end within five or six years while oil is to be fully decontrolled next October. Because of the existence of long-term contracts some natural gas prices will remain low well beyond 1986.
The council assumes oil and gas prices will be the same -- based on the heating volume of each fuel -- in 1992. The government price forecasts underlying the AGA and EPA studies assume the gap does not close so soon. u
Whatever the future course in prices the council argues that some of the best measures to cut heating bills, such as reducing air infiltration through use of weatherstripping or insulating attics and walls, do not involve fuel switching. Often those steps are less costly, too.
The report also says consumers would be better advised to invest in a heating system, that reduces energy consumption so results are not dependent on price differentials.
But, even using the council's price assumptions, converting an oil-fired furnace to gas can provide a substantial savings, particularly in the Chicago area where the oil-gas price differential is greatest.
Also, the report indicates that if a furnace is replaced the return in most of the six cities studied is about as high for gas as for oil if furnaces with similar efficiencies are compared. To avoid the risk that the price gap may close sooner than 1992, the report opts for oil. Whichever fuel is used, a high efficiency furnace is by far the best buy, it stresses.
According to the AGA, about 300,000 homes were converted from oil to gas heat last year. The council report indicates just how complex making a wise decision whether to convert is for most consumers.