Industry News

For Release:
May 1, 2002

Contact:
American Gas Association
Peggy Laramie
(202) 824-7204

Natural Gas Costs Less In 2002 Than Other Home Energies, DOE Says

Remains Best Home-Energy Value for Four of Last Five Years

Washington, D.C. - Natural gas will cost less to use this year than other major home energy sources, according to the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy.

"Consumers get more for their energy dollars by using natural gas - proving once again that this efficient, domestic fuel is truly America's best energy value," said David N. Parker, president and CEO of the American Gas Association (AGA).

Here is what one million British thermal units (Btus) of various residential energy sources will cost in 2002, according to DOE:

Natural Gas	$ 6.56 - down 22% from $8.37 in 2001
No. 2 Heating Oil	$ 7.79
Kerosene	$ 9.11
Propane	$ 9.53
Electricity	$24.27 - virtually unchanged from $24.30 (2001)

"An average homeowner can save hundreds of dollars each year on energy costs by using natural gas to heat their homes, produce hot water and dry their clothes. For instance, you can heat two bathtubs of water with natural gas for every one heated with electricity. This can mean significant savings to families," Parker said.

For example, it will cost $414 to heat an average home with a high-efficiency natural gas furnace - far less than the $1,421 it will cost with an electric resistance furnace or $701 with an electric heat pump, an AGA analysis found.

"Over the life of the equipment, these savings could really add up," Parker said. "A homeowner may save $2,200 by selecting a natural gas water heater instead of an electric water heater during the nine-year life of the unit. When shopping for an appliance, consumers should consider the purchase price of the natural gas equipment as an investment - not as an expense."

Here are AGA's estimated operating costs of home heating systems and water heaters, based on DOE's 2002 operating cost projections:

Estimated Average Home-Heating Costs (2002)
(Calculated by the American Gas Association, based on DOE energy-cost estimates)

Estimated Average Water-Heating Costs (2002) and Lifetime Savings
(Calculated by the American Gas Association, based on DOE energy-cost estimates)

Natural gas remains the nation's most popular home-heating fuel. In all, 51 percent of the country's heated homes (49.1 million households) used natural gas heat in 2000, compared with 31 percent electric, 9 percent fuel oil or kerosene and 6 percent propane.

Every year, DOE forecasts the representative average unit costs of five residential energy sources. These estimates help consumers select appliances that are the most economical to operate, through the Federal Trade Commission's "EnergyGuide" appliance labeling program. DOE's cost estimates for 2002, which will become effective May 24, were published in the Federal Register on April 24.

The American Gas Association represents 187 local energy utility companies that deliver natural gas to more than 52 million homes, businesses and industries throughout the United States. Natural gas meets one-fourth of the United States' energy needs and is the fastest growing major energy source.

(1) These estimates by the American Gas Association are based on DOE's 2002 representative annual costs of energy, using equipment listed in the latest Gas Appliance Manufacturers Association and Air Conditioning and Refrigeration Institute equipment directories. The estimate is based on a 2,072 square-foot home located in a moderately cold temperature region, such as St. Louis, with updated energy efficiency features that reflect the 2000 "International Energy Conservation Code." Homes with less insulation, more floor space and located in a colder climate can expect to have higher costs for appliances