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Most oil companies require that you prebuy 500 gallons, which is about how much I use in a season. Here's my analysis:
500 gal at today's lowest price of $2.20/gal: $1100
500 gal at March predicted price of +7%: $1177
500 gal at today's prebuy price ($2.38/gal): $1190
500 gal prebuy + price protection (extra $.25/gal): $1315
IF (and only if) the government's forecast is correct, the above figures show no real advantage to prebuying this season. The prebuy price is 8% above today's price, which is equal to the predicted rise in oil prices over the winter. Prebuy with price protection is the worst deal of all.
But it's all a gamble.
Based on the above I decided not to prebuy this winter.
WOOD: Since oil prices are reasonable this year (compared to when it was almost $4 a gallon) while wood is expensive (about $250 a cord right now), it may not be worth the hassle to deal with wood. I usually burn wood in October, November, March, and April to save on oil. But it's very labor intensive and that labor has a cost (lost time for other productive work, for example).
According to the NH Office of Energy and Planning, the price per million BTUs of oil is $18.57 and wood is $16.25. That means that oil is 14% more expensive than wood. So $1100 spent on 500 gallons of oil would be $1254 for wood. To my way of thinking, it's not worth all the labor, time, mess, and inefficiency involved in wood heat to save $154. That's a savings of $22 a month for the 7-month heating season! There are better ways to save or earn $22 a month! (I'm only talking about the COST of wood, not other factors like enjoying stacking wood, enjoying a wood fire, etc.)
Also, wood was in short supply last winter and there's not much on the market right now. I will keep 1/2 cord on hand for emergencies but I'm done being a slave to the woodstove.
If you need more than 500 gallons of oil or finances are very tight (to the point where a couple of hundred dollars up or down makes a difference to you), you may have a different take on the above.
You've done a thorough analysis of your heating price options. I would question the NH Energy Office figure of $16.25 per million BTU of wood heat. That is probably an average of split logs from many different species of trees. The density of the wood, age of the tree and the amount of drying will also affect heat values. Also, a delivered cord of wood may not actually be a full cord but a "face cord," "stove cord" or "furnace cord". It's been my experience that stove wood dealers cheat. Unless you stack the wood right after it's thrown off the pick up or dump truck, you won't know. This is a good reason for buying a pellet stove where the chips are sold by weight, there is a ready supply plus ease of use.
Factoring in everything, fuel oil is the best heating option now but not in the long run.
Just as many "experts" predict oil to continue to fall in price through the end of 2015. But, then again, I've learned to largely ignore the "experts."
I would question the NH Energy Office figure of $16.25 per million BTU of wood heat.
Their current prices for both oil ($2.58/gal) and wood ($325/cord) are on the high side. And you're right, it's harder to calculate the cost of BTUs for wood because of the variability in species.
Just as many "experts" predict oil to continue to fall in price through the end of 2015. But, then again, I've learned to largely ignore the "experts."
That's another reason not to prebuy. But if you ignore the experts, what do you base your heating decisions on?
Cordwood costs will not decline in the near future. Milk delivered hardwood pulp prices continue to be very strong. In some cases, loggers are losing money by selling log length firewood rather than delivering that same load to the mill. Plus, they don't have to worry about getting paid. Another factor is the mat log market. These are 16 foot long pieces that are ten inches and up on the top end. They are squared off and conveyed together with threaded rod and used to get heavy equipment over wet areas without making a bunch of mud. This is taking up a lot of the firewood product.
The fact that our gas prices here have peaked again at $4.00+ a gallon due to a conflict between the state and the manufactures , and weather is unpredictable for the lasts several years, so I store all sorts of fuel reserves as I can afford them, knowing the price will go up one way or another ,
In the event there is some economic crisis, my own or something externally, I'm still covered . IF the economy does get better then you've saved having to worry about energy for the next year or so.
But if your going cheap and minimalistic, and things don't improve, or get worse then what ?
I believe it is important to have a good realistic back up plan.
The fact that our gas prices here have peaked again at $4.00+ a gallon due to a conflict between the state and the manufactures , and weather is unpredictable for the lasts several years, so I store all sorts of fuel reserves as I can afford them, knowing the price will go up one way or another ,
In the event there is some economic crisis, my own or something externally, I'm still covered . IF the economy does get better then you've saved having to worry about energy for the next year or so.
But if your going cheap and minimalistic, and things don't improve, or get worse then what ?
I believe it is important to have a good realistic back up plan.
These are all good points, Arleigh. I have about 12 to 3/4 of a cord of wood at the moment and a full tank of oil. I top off the oil at the end of each season to have it in store. But for wood I'm just not finding much to choose from.
Just one question for you, though. If you're always stocking oil by prebuying, that means you're always paying the highest possible price. So doesn't that offset any protection you have from future price increases?
Cordwood costs will not decline in the near future. Milk delivered hardwood pulp prices continue to be very strong. In some cases, loggers are losing money by selling log length firewood rather than delivering that same load to the mill. Plus, they don't have to worry about getting paid. Another factor is the mat log market. These are 16 foot long pieces that are ten inches and up on the top end. They are squared off and conveyed together with threaded rod and used to get heavy equipment over wet areas without making a bunch of mud. This is taking up a lot of the firewood product.
Forester, that's good information, thanks. I need to have a large pine tree taken down. Is there any value in keeping, say, a cord of pine for emergency firewood? What proportion of pine can you burn with hardwood? It used to be said that you could burn something like 25% pine, but then I heard you can burn more pine with today's stoves.
My oil tank is under a 1/4 tank, (use it for hot water and heat) just called for a fill up 2.29/gal and that's through Irving.
Not bad! Ill still burn a lot of wood this winter (probably 3-4 cord) as I get most of it for free (either from my own property or though friends and family who don't burn) however I wont be a slave to the wood stove, if the oil boiler kicks on at 4am because its -15 out, so be it.
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