There are two opportunities for a building owner to consider heating fuels – when their new building is in the planning stage, and when they are replacing their heating system in an existing building.
The most common heating fuels are Electricity, #2 Fuel Oil (mostly in the Northeast), Natural Gas and Liquified Propane Gas (LPG). Less common are kerosene of various grades, cordwood, wood pellets and others. Which of these are the best value? That depends on one calculation: Cost Per Million BTUs. This calculation accounts for the BTU content of the fuel, whether it be in gallons, “therms” or cubic feet (natural gas), the price of the fuel and the efficiency of the appliance, as in forced hot air furnace or forced hot water boiler.
I modified an Excel file from the Energy Information Administration and the Department Of Energy to include a longer list of fuels and a streamlined approach to presenting the data, and formatting to make the data more interesting to look at and understand. I call this workbook Comparative Heating Fuels Cost Calculator, since it compares one fuel to all the others, in terms of cost per million BTUs (British Thermal Units).
There are also practical reasons why one might want a specific fuel, regardless of price. Among them are : deliverability of the fuel, especially in winter. If a delivery truck can’t get to the building fuel tank in the winter, then the building owner may want a larger than normal fuel tank so that it can be filled prior to winter when the snow and ice on the road are not a factor. Otherwise, electricity may be a better option. Also, #2 Fuel Oil is scarcer than an eclipse, say, in Kansas. Since the most common fuel in the USA is Natural Gas, it is often the fuel type that is chosen because it is piped to most cities and neighborhoods in the country. Fuel Oils and LPG are stored in tanks and delivered to the building by tank truck. If there is no place to install a tank, then electricity, or wood may be the only reasonable fuel options.
In any case, the cost per million BTUs must be considered, so the fuel options can first be decided based on price. There is no good reason to choose the most expensive fuel if there are cheaper options that are available in your area of the country, or state.
The most expensive fuel/appliance is a typical fireplace insert burning LPG at $68.05 per million BTUs. The least expensive fuel/appliance is an electric-powered geothermal heat pump : $16.37. A furnace or boiler fired by Natural Gas is $22.75. while the same equipment fired by LPG is $52.74 per million BTUs.
As one can see, the costs per MMbtus are all over the map, which is why one needs the Comparative Fuel Cost calculator to help them decide which energy source is the best value. There are so many energy sources and appliance types that one needs a calculator to determine what is the best way to go with fuels/energy sources.
So, as of August 9, 2025, the most expensive fuel is LPG when used in a fireplace insert. The reason? Fireplaces are historically inefficient, since most of the heat generated by the combustion of wood goes right up the chimney.
If you would like a fresh copy of my Comparative Fuel Cost Calculator, then go here and send me an email and I will respond back with a copy.
