Natural Gas Is More Affordable Than Other Heating Sources, Particularly on the Coldest Days

News Release February 19, 2019

Washington, DC – An American Gas Association (AGA) study concludes that conventional natural gas furnaces on average have an operational cost advantage over other heating sources, including advanced heat pumps, particularly on the coldest days when space heating requirements are the highest and electric heat pump efficiency and heating capacity is the lowest.

The average cost to heat a natural gas home during the polar vortex of January 2014 was $159 compared to $267 for a similar home with a heat pump that relied on an electric furnace for backup heat – a 40 percent difference. An equivalent home with equal heating loads operating an electrical resistance furnace would have incurred a heating bill of $445 on average. Customers using an 80 percent or higher efficiency natural gas furnace to supplement a heat pump in the same regions had average heating bills of $176.

The events of January 2019 share many similarities to what took place a few years earlier in January 2014, when most of the Midwest was subjected to artic temperatures for a prolonged period. AGA’s analysis examines the average consumption and space heating costs associated with natural gas and electricity use during an extreme cold weather event. Using weather and energy consumption data collected from the 2014 polar vortex, the paper compares the cost of natural gas and electric space heating scenarios. Households are likely to have seen similar costs in January of 2019 that were present in January of 2014.

Efficiency for a typical heat pump is best when the outdoor source air is above 35-45 degrees Fahrenheit. However, as temperatures begin to drop below 35 degrees, this advantage begins to erode and this technology is unlikely to work well below 0-5 degrees. Consequently, customers must rely on other forms of space heat such as electrical resistance or natural gas furnaces to supply auxiliary or back up heat.

January 30, 2019 set a single day record for total U.S. natural gas demand at 150.2 billion cubic feet (Bcf). The bulk of that load - 75 Bcf - went to the residential and commercial sector. The Natural Gas Council put out a statement last week saying, “the U.S. natural gas industry embodied reliability and resilience during the deep cold Polar Vortex event that recently swept one-third of the country.”

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 73 million residential, commercial and industrial natural gas customers in the U.S., of which 95 percent — more than 69 million customers — receive their gas from AGA members. Today, natural gas meets more than one-fourth of the United States' energy needs.