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Oil Getting Burned By Natural Gas

Mon, 09/16/2013 - 8:54am
Dan Kelly, Reading Eagle

READING, Pa. (AP) -- EJB Paving & Materials Co. used to burn recycled fuel oil in its Ontelaunee Township facility, but following a nearly five-year decline in natural gas prices, the company made the switch in 2012.

"We converted the first plant (to gas) in June last year and our other plant this year," said Steven D. Bright, a partner in the firm.

The Berks County company is following a national trend in commercial, industrial and residential properties converting from oil to natural gas for economic and environmental reasons.

Bright said EJB Paving's processing plants had been powered by natural gas in the past, but when gas prices began to rise, they converted to No. 2 recycled oil more than a decade ago.

But economic conditions now favor natural gas, so the company has gone back.

"We had to put in a new natural gas line and have already recovered those costs in savings over oil prices," Bright said.

On the green side, Bright said natural gas brings additional savings in equipment maintenance and environmental monitoring.

"Oil is a much dirtier fuel and there is a lot of environmental reporting," he said. "Natural gas is also more consistent for regulating heat."

The switch also will increase the life of the company's bag house, which collects particulates from the burners.

"The payback was immediate. We're seeing a 50 to 60 percent fuel cost savings," Bright said, explaining that translates to $69,000 in annual savings.

THAT RUSHING SOUND

An American Gas Association study says more than 500,000 housing units in the Northeast switched from oil to natural gas for their primary heating fuel between 2000 and 2010.

UGI Utilities, the gas utility that services most of Berks County, has witnessed that same trend locally.

Steve Bareuther, senior project leader for gas conversions at UGI, said that since gas was first commercially extracted from the Marcellus shale formation in 2004, selling residential, commercial and industrial users on switching to natural gas hasn't been hard.

Systemwide, UGI gets more than 500 calls a month from prospective customers interested in switching to natural gas.

"The one time when we do get more aggressive in reaching out to people is when we do a large line to a customer and there are other potential customers along that route," Bareuther said. "We will definitely reach out to them."

TIMING IS EVERYTHING

For Bulk Chemicals Inc., Bern Township, lower prices and a complete remodeling of their offices and laboratories earlier this year made switching from oil to natural gas a logical move.

"We had to get UGI to run a natural gas line 50 to 60 yards up Stinson Road from Bellmans Church Road," said Bert Scheaffer, vice president of manufacturing and purchasing.

That cost was about $20,000, but Scheaffer expects the energy savings with natural gas will recoup that amount in three to four years.

"Between natural gas, all new gas burners, programmable thermostats and zoned heating, our savings in the wintertime could be $2,000 to $3,000 a month," he said.

But if a company has just put in a new oil or electric energy plant, switching now to natural gas might not make financial sense, no matter how big the fuel price difference is, Swope said.

ADVOCATING FOR OIL

Not everyone is getting hooked up to natural gas, said Steven Moyer, president of Moyer Plumbing Heating Cooling and Fuel of Kutztown.

"The price right now is very favorable to natural gas, but in the last 20 years that has not always been the case," Moyer said.

The alternative then becomes whether a customer wants to be tied to a big utility or support local businesses that can offer more personalized service, Moyer said.

"And safetywise, you never had a house blow up from fuel oil," he said.

Moyer, also a member of the Berks-Schuylkill Home Heating Association, said plans are afoot to begin exporting large quantities of natural gas to take advantage of the huge worldwide demand.

"The same thing happened when biodiesel producers took advantage of federal tax incentives and then shipped it overseas to take advantage of higher prices on the world market," Moyer said. "I'm very sure we'll soon see a lot of our hometown natural gas, as they are fond of calling it, going overseas."

The U.S. Energy Department recently commissioned a study of 17 proposed natural gas export facilities poised to begin operation once they get federal approvals. The study found that if they all began exporting natural gas, it would trigger an increase in domestic gas production to satisfy the demand.

That would cause gas prices to rise by 3 to 9 percent, depending on how fast the exporting facilities are brought online. The study, however, also found that energy-cost forecasts showed natural gas still would cost less than fuel oil in the coming decade.

FOR THE GREEN

Saving money and the environment were key elements in the Twin Valley School District's decision to switch to natural gas, said Dr. Robert Pleis, superintendent.

In 2000, Twin Valley Elementary became a LEED, or Leadership in Energy and Environmental Design, building using a geothermal heat pump.

And, when the district installed boilers in the high school, officials had the foresight to install a dual-fuel system, meaning the burners could use heating oil or natural gas depending on which made more economic sense.

The middle school was heated by propane and was an easy conversion to natural gas, said Keith Heckman, facilities director.

Pleis said Twin Valley estimates it will save $64,000 a year heating the high school with natural gas and $40,000 to $50,000 at the middle school.

"That's a total savings of about $100,000 a year," Pleis said. "We were offered an opportunity to help the environment and save money doing it.

"It was a proverbial no-brainer."

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