From Oil to Gas

I’m on the board of a 10-story, 121-unit cooperative in Riverdale, and with oil prices likely to remain high, we are considering converting our oil-heating system to a gas-fueled heating system. (We are currently using No. 6 heating oil.) What are the pros and cons of making the conversion? What new equipment would we need, and approximately how long would it take before we realize the savings of switching over to the new system?

Given the rising costs of home heating oil, more and more boards are weighing the options of an oil-to-gas conversion for their buildings’ heating plants. The soundness of that decision depends on the particulars of each building, including the configuration of the existing heating plant, age of the equipment, the price (current and future) of home heating oil and gas, and whether the building converts to an interruptible or gas-only system.

Most home heating plants use one of several fuels to power their systems: No. 2 oil, No. 6 oil, natural gas, or (in an interruptible system), natural gas with No. 2 oil as a backup. No. 2 oil – effectively diesel fuel – is lighter and cleaner to burn than No. 6 oil, but also more expensive. No. 6 is the least expensive home heating oil, but its heavy viscosity requires pre-heating and constant circulation to keep it liquefied so it doesn’t sludge up. Because No. 6 is a thick oil, heating systems that use it often have higher maintenance and equipment costs than those that use No. 2 oil or gas. (No. 4 oil, a blend of Nos. 2 and 6, is used in some heating plants, but much less commonly than the other two oils.)

Gas is lighter and cleaner to burn than either No. 2 or No. 6 oil, and at current prices, it is also less expensive. In an interruptible heating system, gas is used nearly all (95 percent) of the time. When gas demand is high – usually on very cold days – the utility serving the building will temporarily shut off the gas supply and require the building to burn No. 2 oil until peak gas usage subsides with no heating disruptions.

Some heating systems use only gas for their heating fuel; these are known as firm gas systems. Utilities typically charge a higher gas rate for firm systems than for interruptible systems. But with either an interruptible or firm system, buildings can negotiate gas rates with the utility company. Bigger buildings with larger heating requirements obviously have greater negotiating power.

If your building decides to convert to a gas-interruptible system and currently uses No. 6 oil, you will have to switch to No. 2 oil. The existing boiler and oil tank can still be used with the new oil type if they are in good condition, but you will need a dual-fuel burner to burn both oil and gas.

Installing a gas-interruptible or gas-firm system may require a number of capital costs. First, even if the building already uses gas service for cooking, a larger gas main may be needed for the additional gas supply for heating. New gas piping may have to be installed from the gas main to the boiler room, and any piping more than four inches in diameter must have welded joints. Gas piping that carries more than three pounds per square inch gauge (psig) of operating pressure are required to be radiographed (an added cost) to ensure the welded joints are flawless. A gas booster pump may also be necessary to increase the gas pressure to ensure adequate supply to the burner.

Gas-based heating systems also require a dedicated gas-meter room, so your building’s basement or cellar must have enough space to accommodate one. A gas-meter room must be enclosed, fire-rated, and located as close as possible to where the gas main enters the building. The room must also have proper ventilation, and it cannot be used for storage.

One consideration when debating the pros and cons of converting from oil to gas is the age of your heating plant equipment. Boilers typically last 25 to 35 years, and burners about 20. If either component has less than five years of remaining useful life, it makes sense to wait until you replace both before switching over to gas. That way you maximize the longevity of your existing equipment rather than replacing it prematurely. Waiting a couple of years also gives the board additional time to put funds in place for the new equipment.

If just the burner needs immediate replacement, it’s worth installing a dual-fuel burner even if you plan to continue burning only oil. Having a burner that can use both types of fuel keeps your options open if the building decides to convert to an interruptible system down the line. A new burner, whether a dual-fuel or one that burns only oil or gas, can almost always be fitted to an existing boiler.

To provide you with the information needed to make an informed decision about whether to convert your heating system, it pays to have an engineering firm or heating consultant first conduct a feasibility study. The study should determine your building’s existing heating requirements and fuel usage, project the new gas load, calculate the costs for new gas service and new equipment, and estimate what the annual savings and expected payback time would be for the conversion. Keep in mind that projected savings and payback periods will change with the fluctuating costs of home heating fuels.

If your board decides it is feasible to convert your heating plant from oil to gas, be aware of the timeframe involved. The entire process, from the initial feasibility study to when the new system is ready for operation, can take up to eight months. During that time, the building’s expected gas usage must be submitted to the utility company for review and approval, and the utility will specify the design and size of the gas piping, meters, valves, and service equipment. To minimize disruption to residents, the installation of the new system should ideally take place in the summer when the building’s heating requirements are minimal.

While an oil-to-gas conversion can reduce your building’s heating costs, don’t overlook poorly performing systems and components that can squander those savings. For example, even a newly converted or upgraded heating system cannot compensate for inefficiently distributed heat. This common problem often leads to lower-floor residents opening their windows to let their overheated apartments cool down while upper-floor residents feel chilly because not enough heat reaches their units.

Heat is also lost though drafty windows, insufficient insulation throughout the building, and deteriorating facades and roofs that allow water and cold air to seep in. Addressing these items will go a long way in retaining the benefits of your building’s newly converted heating system.