While alternative heating methods such as ground or air heat pumps and solar-powered hot water are becoming more popular, most people in the UK still heat their homes with ‘conventional’ sources such as fuel oil, coal, gas, or electricity. Of those, roughly three and a half million are heated with oil. Industry predictions point to price and availability problems worsening over time, so if you’re heating with oil at the moment you should be thinking about moving to an alternative soon. Already expensive, it’s only going to get worse.

Aside from the cost there are other good reasons why you should not choose oil to heat your home and provide your hot water. Of course, if you already have a boiler and tank installed, you may feel bound to continue using it – but bear in mind that there are no government ‘feed in tariffs’ available.

Heating oil is a non-renewable resource that releases carbon dioxide when burned, contributing to global warming. So, it’s not a clean energy source. It’s a toxic chemical, so if either the storage tank or any of the pipes leak, it’s highly polluting to the immediate environment – i.e. your property. Aside from the cost of the oil itself, the equipment required – the boiler, pipes and storage tank – and the installation of the same, are all very expensive (see below). As heating oil is delivered by road, it’s possible that you’ll run out while you wait for the next delivery. Many people who use heating oil have either run out at some point or come very close to doing so – and of course, this will happen in the middle of winter, not summer.

domestic oil tank, image

A leaking oil tank or pipe can result in pollution very close to home

The price of heating oil itself is already very high, and it has gone up dramatically over the past several years. An estimate by a well-known online consumer report group says heating and hot water will typically cost around £850 annually for a typical 3-bedroomed, semi-detached and well insulated home.

Equipment cost

New boilers start at around £1900 but can be much more expensive. Installation, by qualified engineers, is extra. A new, approved storage tank will cost between £330 – £850 (depending on type). These are not pretty. As an alternative you can purchase ‘underground’ models, but these are much more difficult to repair if the need arises. Theft from domestic oil tanks seems to be increasing along with the price of oil.

The rising cost of oil

Between 1990 and 2000, the price of a barrel of crude oil fluctuated either side of $20 but didn’t stray very far from it for the entire decade. From 2000 to early 2008 it increased in cost by roughly 30% annually. For the first half of 2008 it increased very sharply from around $100 per barrel to almost $150 followed by a substantial crash, along with everything else affected by the global financial crisis. Since then it’s rebounded quickly and once again hovers close to $100. If you draw a line through the fluctuations, it’s a grim picture: an ascending curve that will quite possibly break through the 2008 record within the next two years.

The oil used in domestic home heating systems, also known as fuel oil, is extracted directly from crude oil. After petroleum, it’s the second largest ‘cut’ and comprises roughly 25% of the crude oil from which it’s distilled. It’s commonly delivered by tanker truck and stored in above-ground storage tanks (‘ASTs’), located somewhere close to the building housing the boiler.

Oil-fired boilers need to be serviced annually, as parts such as the jets need to be periodically replaced to ensure efficient combustion of the fuel. This has to be done by a qualified engineer.

Renewable, vs. non-renewable

Oil, coal and gas are all fossil fuels. Burning them means depleting a resource which can never be replaced, as well as releasing into the atmosphere carbon which was stored millions of years ago – so they’re not carbon-neutral. However, heating with wood, which only releases the carbon stored in the recent past (i.e. while the wood grew) is considered to be carbon neutral.

oil storage tanks, image

Not exactly a pretty sight - fuel oil storage tanks

Heating oil accounts for about 25% of the yield of a barrel of crude oil, the second largest “cut” after gasoline (petrol). But, ‘peak oil’ is upon us and prices of all fossil fuels are rising as never before. To make matter worse, a recent Office of Fair Trading (OFT) investigation into websites comparing heating oil prices has identified failings including false testimonials and incomplete information.’ It would also appear that heating oil suppliers hike prices sharply when the weather turns colder. The Watchdog Consumer Focus said that ‘heating oil customers were left with huge bills last winter after oil price spikes’. “We would urge anyone worried about the cost of heating oil to buy before winter kicks in to avoid paying peak prices,” said Adam Scorer, from the watchdog.

So, while it may be your best bet until you install something better, it’s not really a very good source of heating at all: it’s not green, it’s not cheap, it’s the source of a lot or industrial and domestic pollution, and there are periodic shortages. And, given the way the cost of energy is increasing, if you’re heating with oil at the moment you should be thinking of where you want to be in five years time. For now, if you have to buy heating oil, buy it before winter sets in – or you’ll end up paying much more for the same amount of heat.

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