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June 7 -8, 2017: 14th Annual Energy Conference

  • Annual Energy Conference
    June 7, 2017 - June 8, 2017
    11:00 am - 4:30 pm

Benefits of Direct Use of Natural Gas

For many years, energy agencies have alerted Americans to the importance of energy efficiency. A variety of tags and certifications, backed by financial incentives, encourage us to understand our equipment buying options. We know that it makes sense to spend a little more on a product so that we can save money and energy throughout its useful life.

These efforts continue to reduce per capita energy use for both natural gas and electric customers. And the more energy we save, the lower our impact on the environment.

2015 Outlook Spotlight: Clean and Efficient- Benefits of Direct Use of Natural Gas

We’re highlighting some of the guest posts featured in our 2015 Outlook here on the blog. The following excerpt discusses the opportunity to reduce emissions via the direct use of natural gas. To access the full Outlook study please click here.

For many years, energy agencies have alerted Americans to the importance of energy efficiency.  A variety of tags and certifications, backed by financial incentives, encourage us to understand our equipment buying options.  We know that it makes sense to spend a little more on a product so that we can save money and energy throughout its useful life.

These efforts continue to reduce per capita energy use for both natural gas and electric customers. And the more energy we save, the lower our impact on the environment.

But focusing on product efficiency only reveals half the story. To get the whole picture, it’s important to look at what’s called the full fuel cycle. That means understanding how much energy is retained — or lost — from the energy’s source until its final use in your water heater, oven or home heating system.

And with the full fuel cycle in mind, direct use of natural gas comes out a winner in the energy efficiency race.

For instance, by the time you turn on your electric appliance, up to 62 of the energy value from the original fuel has been lost. So the full fuel cycle efficiency is about 38 percent.  The full fuel cycle efficiency of a natural gas appliance is about 92 percent — a substantial difference.

Here’s how it works.

Even with advances in renewable power, most electricity in the U.S. is generated by either coal or natural gas.

  • We lose about 5 percent of the energy benefits of those fuels during the transportation process — before they arrive at the power plant.
  • The major energy loss occurs during generation.  Burning a fuel to create electricity wastes about 62 percent of its energy. That lost energy turns into heat, rather than useful power.
  • Finally, we lose another 6 percent of the energy over the electric transmission lines.

So for every 100 MMBtu of fuel that leaves the mine or the well, only 32 MMBtu reaches our appliances.  The rest is lost.

These fuel choices have important environmental implications.  On average, the house fueled by natural gas is responsible for about 37 percent fewer greenhouse gas emissions than a comparable all-electric home.  Furthermore, the more fuel we waste, the more we need to produce and transport — processes that also affect the environment.

We are approaching a future when a combination of wind, solar, wave energy and usable storage will reduce our reliance on fossil fuels. Until then, one of the most effective ways we have to save energy and reduce carbon emissions today is to use natural gas directly in our homes and businesses wherever gas is available.

DOE Study: Choosing Natural Gas Appliances Can Double Energy Savings

Washington, D.C. – The American Gas Association (AGA) today announced that residential customers could cut their annual heating costs nearly in half by choosing natural gas appliances. These findings come with the release of AGA’s 2014 Representative Average Residential Space Heating and Water Heating Costs analysis, which compare average annual costs for various types of space and water heating appliances. According to estimates, customers can save up to $1,262 on space heating and more than $300 on water heating costs annually by using appliances powered by natural gas instead of other common energy choices. The cost comparisons are based on the United States Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy’s Representative Average Unit Costs of Energy notice as published in the Federal Register on March 18, 2014. After a winter marked by sustained cold and record energy demand, this information can help Americans to better understand how to meet their energy needs.

“These numbers show that natural gas is the clear choice for consumers looking to save on home heating costs,” said AGA President and CEO Dave McCurdy. “Choosing natural gas means you don’t have to choose between your wallet and the environment. This is because the direct use of natural gas in home appliances is the clean, efficient choice, achieving 92 percent energy efficiency and producing nearly 40 percent fewer greenhouse gas emissions than a home with all-electric appliances.”

America’s natural gas utilities are dedicated to helping their customers achieve even greater savings. In 2012, natural gas utilities spent $1.1 billion on efficiency programs, providing valuable tools, incentives and information to help their customers understand and reduce their energy usage. Many in the nation continue to struggle to pay their energy bills, and these resources, along with assistance to low income customers provided by utilities and government programs such as LIHEAP, are essential to ensuring that no American needs to choose between energy and other basic needs.

A piece of equipment with a higher annual fuel utilization efficiency (AFUE) rating provides greater savings for customers. For example, a 97 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.

The tables below demonstrate estimated cost comparisons for home and water heating devices.

SPACE HEATING ANALYSIS 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 97 percent AFUE natural gas furnace provides the lowest annual operating cost followed by the 80 percent AFUE gas furnace.

 

2014 Space Heating Annual Cost Summary

(Annual Operating Cost)

 

Heating Equipment Type 5000 Heating Degree Days
97% AFUE Gas Furnace $544
80% AFUE Gas Furnace $714
7.7 HSPF Electric Heat Pump $1,029
97% AFUE Propane Furnace $1,409
87% AFUE Oil Furnace $1,500
80% AFUE Propane Furnace $1,793
80% AFUE Oil Furnace $1,614
Electric Resistance Furnace $1,806

 

WATER HEATER ANALYSIS SUMMARY: The water heater analysis is based on the equivalent First Hour Rating (FHR), national average energy usage, and the 2014 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.

 

2014 Water Heating Annual Cost Summary

(Annual Operating Cost from Low to High)

Water Heater Type Annual Cost
40 Gallon Natural Gas (FHR = 74 gallons) $275
50 Gallon Electric (FHR = 67 gallons) $576

 

COMBINATION SPACE HEATING AND WATER HEATER INSTALLATION: Based on the annual cost analysis for space heating and water heaters, the combination of a natural gas 97% AFUE furnace and storage water heater provides the lowest operating cost space/water heating package.

 

2014 Space Heating with Water Heater Installations

(Annual Operating Cost from Low to High)

 

Space Heating/ Water Heating Type Annual Cost
Natural Gas: 97% AFUE Furnace & Water Heater $819
Natural Gas: 80% AFUE & Water Heater $989
Electric: Heat Pump & Water Heater $1,605

 

About the American Gas Association

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 92 percent — more than 65 million customers — receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States’ energy needs.

 

 

Low Natural Gas Prices Helping to Keep Customers Connected

Washington, D.C. – In cities and towns across the country, Americans are saving money and enjoying a better quality of life thanks to the nation’s abundant supply of clean, domestic natural gas delivered by local natural gas utilities. This year, according to a survey of American Gas Association member companies, the number of customers disconnected from their utility service fell by more than eight percent, indicating that the low price of natural gas is allowing more people to access the energy they need. Additionally, the total amount owed by natural gas customers fell by nearly 15 percent.

“Natural gas plays a key role in rebuilding our nation’s economy by saving money for homes and businesses and keeping our most vulnerable citizens from having to go without essential energy,” said AGA President and CEO Dave McCurdy. “The low price of natural gas also creates jobs, is boosting the manufacturing and chemical industries and is a driver for infrastructure expansion while offering tremendous value to the 177 million Americans who use it every day.”

Prices for natural gas this winter were nearly two percent lower compared to the year before, according to the Energy Information Administration, but the improvement in disconnect rates can also be attributed to the combination of an improving economy and assistance from federal, state and utility energy efficiency programs that all helped more households stay current on their bills.

Low domestic prices of natural gas have led to savings of almost $35 billion for residential natural gas customers over the past three years. Households that use natural gas appliances for heating, water heating, cooking and clothes drying spend an average of $654 less per year than homes using electricity for those applications. These savings are achieved not just through the comparatively low price point of natural gas, but also due to the efficiency of the delivery network operated by natural gas utilities. The direct use of natural gas maintains about 92 percent of its usable energy from production to the customer.

Natural gas utilities are committed to helping customers achieve even greater energy savings by investing heavily in energy efficiency programs. In 2011, natural gas utilities created total savings of more than $300 million for customers – about $107 per household – and offset 6.5 million metric tons of carbon dioxide.

Still, the need for fuel assistance in this country remains great, and many customers struggle to make ends meet. The latest U.S. Census data shows that the poverty rate in 2012 was 15 percent – meaning about 46.5 million Americans lived in poverty. While overall disconnects are down, the number of customers who are at least 30 days late in paying their utility bills stayed stable compared to last year and accounts for more than 18 percent of customers. The Low Income Heating and Energy Assistance Program (LIHEAP) is an essential federal program that can help ensure no Americans go without heat in winter or air conditioning in summer. To date, the Senate Appropriations Committee has approved $3.61 billion for LIHEAP in FY 2014. The House Appropriations Committee, however, has yet to set FY 2014 LIHEAP funding levels. While recognizing that Congress faces difficult decisions given the current fiscal climate, AGA continues to call for action ensuring responsible funding levels for LIHEAP. Greater certainty for overall LIHEAP funding and distribution timing is crucial to ensuring that states can plan budgets and receive funds necessary to provide assistance to Americans in need.

More than Half a Million Northeast Homes Switched to Natural Gas Heat from 2000-2010

Washington, D.C. – The American Gas Association (AGA) estimates that more than half a million housing units in the Northeast switched from oil to natural gas for their primary heating fuel from 2000-2010. This estimate comes from AGA’s report, Residential Space Heating Changes in the Northeast, 2000-2010, which was compiled using data from the U.S. Census Bureau’s American Community Survey. AGA examined 217 U.S. northeastern counties for changes in home heating fuel between 2000 and 2010 and found that natural gas conversions topped those of all other fuels combined during that decade.

“Over 177 million Americans throughout the nation rely on clean natural gas to meet the daily needs of modern life, whether it’s to heat their homes, provide a hot shower or cook a meal,” said AGA president and CEO Dave McCurdy. “Our domestic abundance of natural gas has led to an era of market stability that translates to a difference our customers can see in their pockets. This report shows that customers recognize the value of natural gas as an affordable, efficient, safe and reliable energy choice.”

America’s natural gas delivery system is extraordinarily efficient, with 92 percent of the natural gas produced at the wellhead being delivered to customers as usable energy. Combined with comparatively low prices and a lower emissions profile, this means that direct use of natural gas results in substantial savings in dollars and greenhouse gas emissions. Nationwide, customers who heated their homes with natural gas during the 2011-2012 winter heating season saw average savings of 70 percent compared to those using heating oil, and more than 32 percent compared to homes heated with electricity, according to the Energy Information Administration. Natural gas utilities also make significant investments in energy efficiency programs to help customers reduce energy use, thereby saving their customers across the United States more than $300 million in 2011 – about $107 per household.

Homes heated with natural gas also made up the largest share of new single family housing unit construction from 2000-2012. Much of the increase in natural gas-heated homes can be attributed to infrastructure growth of utility gas systems in the Northeast. Greater infrastructure investment in this region and the expansion of natural gas lines to potential customers could further facilitate the conversion of the more than six million housing units in the area that are not yet heated by natural gas.

America’s natural gas utilities operate over two million miles of pipeline throughout the United States – the safest, most reliable energy delivery system in the country. Utilities invest more than $7 billion annually to help enhance safety, upgrade systems and expand service so that more Americans can access this foundation fuel. Further expansion will create greater opportunity for leveraging the economic and environmental benefits of natural gas and achieving our nation’s goal of a more secure energy future.

“America’s natural gas utilities want all Americans to have access to the benefits of natural gas,” said McCurdy. “We are committed to making investments and encouraging policies that boost the growth of the natural gas delivery system to service new homes and businesses, and to help spur economic development in every state.”

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