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 AGA Analysis Shows That on a Full-Fuel-Cycle Basis, Natural Gas is Most Efficient, Cost Effective Energy Source   


Washington, DC – The American Gas Association (AGA) today released the results of a recently conducted analysis showing that the direct use of natural gas in residential applications, when evaluated on a full-fuel-cycle basis against fuel oil, electricity and propane, results in significant reductions in energy production, consumer energy bills and greenhouse gas emissions.

“This study lets the facts speak for themselves.  Homeowners using natural gas are not only doing their part to reduce greenhouse gas emissions but also can significantly reduce their energy bills – on average 34 percent lower than oil homes, 30 percent lower than all-electric homes and 45 percent lower than propane homes,” said Dave Parker, president and CEO of AGA.

The analysis shows that, when measured on a full-fuel-cycle basis, a typical natural gas home requires about one-quarter less total energy than is required for a comparable all-electric home.  The energy efficiency advantage of using natural gas directly in the home stems from the fact that natural gas retains about 90 percent of its useable energy from the point of production to the burner tip in the home.  In contrast, only about 30 percent of the energy produced to satisfy the electricity needs of consumers is retained in the process of energy production, conversion, transmission and distribution.

The analysis highlights the fact that electric appliances lose more energy from the point of production to the point of end-use, emit higher levels of greenhouse gases and cost the consumer more to operate. For example, residential customers who use natural gas water heaters save on a number of fronts.  Where an electric resistance water heater produces 3.1 metric tons of CO2 per year, a comparable natural gas water heater produces only 1.5.  In addition, the cost to run that electric resistance water heater is about $554 per year, while the natural gas water heater will only cost about $282.

In an effort to provide consumers with accurate environmental information, AGA promotes the addition of carbon footprint labeling for appliances.  Carbon footprint information can be added to EnergyGuide appliance labels, giving consumers consistent, comparable and verifiable information about the carbon associated with the use of residential appliances.   

The analysis concludes that site-based regulations, such as appliance efficiency standards and measurement, can lead to higher energy resource consumption as well as higher levels of pollution.

This view is supported by the National Academies’ recent report to the Department of Energy (DOE), “Review of Site (Point-of-Use) and Full-Fuel-Cycle Measurement Approaches to DOE/EERE Building Appliance Energy Efficiency Standards.”  The report found that DOE should consider changing its measurement of appliance energy efficiency to one based on the full-fuel-cycle.  In September, AGA joined with the Natural Resources Defense Council to release a joint statement urging Congress to heed the recommendations of the National Academies by making carbon-based energy measurements the standard practice.

Click here to read the full analysis.


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The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 71 million residential, commercial and industrial natural gas customers in the U.S., of which 94 percent — over 68 million customers — receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States' energy needs.

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