Mid Atlantic Real Estate Journal — Green Buildings — March 30 - April 12, 2012 — 21A
www.marejournal.com
G REEN B UILDINGS
By Gary Frank, American Boiler Company Building Owners Cut Energy Costs with Oil to Gas Burner Conversions
B
uilding owners with oil heat must be feel- ing pretty lucky. The
term. If a building owner is con- cerned about removing oil tanks, the oil burner can be switched to a dual fuel burner. No tank removal is required, and the building owner gets the benefit of having two op- tions for fuel. In addition, some building owners with dual fuel systems can qualify for lower gas rates if they are willing to make a temporary switch to oil during periods of peak gas demand. Working with the gas util- ity can be a challenge. How- ever, some contractors will
handle the administrative work for you. American Boiler Company, for example, will complete and submit gas load data sheets, meet with the utility on-site, and handle any required inspections as part of their Oil to Gas conversion service. Switching from oil to gas will typically require a new burner and some additional gas piping. Project costs vary, and largely depend on the size of the boiler. A typical apartment building with 25 to 50 apartments can convert to gas for under $20,000. The
payback for this investment can be under two years, with substantial benefits continu- ing beyond the breakeven point. Building owners are not required to sign long-term con- tracts. If making the switch to dual fuel, however, the utility will require a minimum amount of gas to be purchased each year to ensure that they recover their investment. The summer months are a good time to consider an oil to gas conversion. Boilers are typically working less during the warm weather so there’s
no disruption to the building’s space heat. Also, it is easier to obtain a gas burner in the summer than at the start of the heating season when sup- plies are much more limited. Given the substantial fi- nancial benefits of a switch to gas, strong demand for oil to gas conversions is expected to continue. Building owners will surely benefit by reviewing their options before tempera- tures drop again. Ga r y F r ank i s t h e president of American Boiler Company located in Hillside, NJ. ■
historically warm winter spared them from the full financial im- pact of surg- ing heating o i l pr i c e s . N o w t h a t the heating
Gary Frank
season is nearly over, many property managers and build- ing owners are looking for ways to cut heating costs be- fore next winter arrives. One solution that is surprisingly affordable is converting from oil to natural gas. The disparity between heat- ing oil and natural gas prices began in early 2009, when oil prices started their steep as- cent from a relatively low price of $40 per barrel. Political tensions in the Middle East, and a growing demand for oil in developing countries have driven crude oil prices over $100 per barrel. Meanwhile, additional domestic natural gas supplies, among other factors, have kept the price of gas low. So low, in fact, that natural gas is more than 75% cheaper than oil per energy unit. With the huge divergence in oil and gas prices, burner suppliers and mechanical con- tractors are seeing strong de- mand for burner conversions. Although the benefits to con- verting to gas are significant, several common myths in the marketplace are causing some building owners to pass on this opportunity to save money. Common Oil to Gas Conversion Myths: •The gas utility will charge for the cost of upgrading service. •I’ll need to pay for the removal of my oil tank. •Working with the gas utility will be difficult. •Replacing the burner and boiler will be expensive. •I’ll need to sign a long-term contract for the utility to fund my upgrade. In reality, many of the con- cerns that building owners have about oil to gas conver- sions are unfounded. The gas utilities cover most of the cost of the upgrade. They do this because the project is profit- able from their standpoint when viewed over a multi-year
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