Natural Gas is the Best Heating Value

News Release

Natural Gas is the Best Heating Value

Washington, D.C. - The American Gas Association (AGA) today announced that 2012 residential space heating and water heating costs show natural gas may cost less to use in the coming year than other major home energy sources. The comparison of cost estimates between natural gas and other fuels are based on the U.S. Department of Energy's (DOE) Office of Energy Efficiency and Renewable Energy forecast, published in the April 26, 2012 Federal Register.

"Natural gas offers tremendous value to the 177 million Americans who use it every day to heat their homes, warm their water and cook their food, and this forecast underscores the reality of that in dollars and cents," said Dave McCurdy, president and CEO of AGA. "At at time when prices at the pump are rising and many are still struggling, natural gas is a bright spot bringing consumers real savings."

A piece of equipment with a higher annual fuel utilization efficiency (AFUE) rating provides greater savings for customers. For example, a 96 percent AFUE natural gas furnace provides the lowest-cost space heating option for homeowners, followed by an 80 percent AFUE natural gas furnace. Both offer significant annual operating cost savings over comparable space heating options.

See below for a table listing estimated home-heating and water-heating cost comparisons.

SPACE HEATING ANAYLSIS SUMMARY: The space heating analysis is based on a 2,072 square foot house located in St. Louis and represents a 5,000 Heating Degree Day location. The house meets the energy conservation provisions in the 2012 International Residential Code and the space heating equipment is selected from the AHRI online directory. The 96% AFUE natural gas furnace provides the lowest annual operating cost followed by the 80% AFUE gas furnace.


(Annual operating cost)

Heating Equipment Type

5000 Heating Degree Days

96% AFUE Gas Furnace


80% AFUE Gas Furnace


7.7 HSPF Electric Heat Pump


96% AFUE Propane Furnace


85% AFUE Oil Furnace


80% AFUE Propane Furnace


80% AFUE Oil Furnace


Electric Resistance Furnace



WATER HEATER ANALYSIS SUMMARY: The water heater analysis is based on the equivalent First Hour Rating (FHR), national average energy usage, and the 2012 energy costs as published by DOE. A natural gas 40-gallon and an electric 50-gallon, both conventional storage types, are chosen based on their FHR. The natural gas water heater would provide the lowest annual operating cost.



(Annual operating cost)

Water Heater Type

Annual Cost

40 Gallon Natural Gas (FHR = 74 gallons)


50 Gallon Electric (FHR = 67 gallons)



COMBINATION SPACE HEATING AND WATER HEATER INSTALLAITON: Based on the annual cost analysis for space heating and water heaters, the combination of a natural gas

96% AFUE furnace and storage water heater provides the lowest operating cost space/water heating package.



(Annual operating cost)

Space Heating/Water Heating Type

Annual Cost

Natural Gas: 96% AFUE Furnace & Water Heater


Natural Gas: 80% AFUE & Water Heater


Electric: Heat Pump & Water Heater



Natural Gas Is America’s Best Home Value When Compared to Other Energy Sources