Instead of worrying about the additional cost of oil, why don't you look for alternative ways to heat your home? Electric immediately comes to mind if you don't want to use propane to heat.

Also make sure all workers and the appliance people know you will be using propane. The fittings are different for propane versus gas. We used a conversion kit for our dryer. Our cooktop was built specifically for propane.

The other issue to consider is building a "tight house", meaning a well sealed and insulated house, regardless of the fuel you wind up using. Here's a good reference: http://www.buildingscience.com/index_html

Look for the articles on high valure wall assemblies and roofs.

Another issue: if yours is an area that loses power frequently, you may wish to consider installing a back-up generator for key electrical circuits, i.e., refrigerator, microwave, key lighting circuits, sump pump (if any) and any electrical circuits serving your house heating source. No need for a "whole house" back-up, but certainly consider back-up for the key services needed when the power is off fir several days.

I wouldn't go electric in our area without doing geothermal. Electricity costs are very high and it would be extremely expensive. At least with geothermal you get both heating and cooling, and no ugly outside air compressors.

I also agree about insulating the heck out of a home...regardless of how that BTU is generated, the longer you hang on to it, the better off you are.

IMO, that is a ridiculous oversight...is this builder not familiar with the area? We don't have natural gas in our area and have an in ground propane tank which we use to run our tankless hot water heaters, our gas fireplace and our generator.

I agree with the geothermal suggestion. We used it for our home along with the propane for cooking (a must for me), a fireplace and the dryer.

I didn't suggest it because of the initial costs. If some one is worried about oil prices, they are likely to be put off by the higher initial prices of geothermal.

Data from 2011: "The federal Energy Information Administration (EIA) reports that the average American homeowner will pay only about $732 to heat their home with gas this winter season (October 1 through March 31) versus a whopping $2,535 for oil heat."

You are probably in a colder than average climate, so the $ cost of oil might be even higher per year, your house may be larger or smaller than average, but will (one hopes) be better insulated. You need to prognosticate, but all evidence suggests that gas is going to remain a lot cheaper than oil. If you guess that the cost difference will continue to be $1000 to $1500/year over the next 10 years, then $2500 in compensation isn't even close to break-even.

If you get them to wrap the house with 4" of rigid foam insulation, go with very low U-factor windows, and superinsulate and seal the attic, perhaps with spray foam to block all air infiltration you may not care so much about the difference in fuel. (You'll also have a very solid feeling, quiet house!)

What about exploring the plans of the natural gas supplier to expand into your area in the future? Suppose that they say about 5 years from now? In such a case, I would go propane since almost all gas burners can be converted from one to the other-- but it must be done correctly. I have not done the math, but oil and propane are probably about the same cost for BTU equivalent at this time. Geothermal is expensive up front, but the oil costs add up over the years.
Here in the mid South, the lowest temperature this season is 22 thus far and that for just a few hours per day for a few days. AC costs are higher in the Summer.

This post was edited by bus_driver on Tue, Feb 26, 13 at 16:40

About that 2011 estimate, oil is more expensive now than in 2011. The future of oil prices is anyone's guess.

Build an average house and you could be looking at $4000 a year for oil.

Given your electric rates, you really have to do something significant. Usually, building really tight is going to be the answer. Now really tight would mean r-30 walls or something close. 2 inches of rigid foam on top of 2x6 walls with blown insulation. This costs a lot more than $2500 compared to code construction but it pays off pretty quickly.

Honestly in your climate, with your electric rates, NG is worth well over $10k.

Oil in new construction is an absolute travesty both to the environment and our pocketbook.

Our geothermal paid off right away as the only real cost differential for us was the cost of drilling the wells. We got the 30% tax credit plus an additional credit from the state so we were right in line with other systems...considering we didn't need separate air conditioning too. The system has performed beautifully and we are very comfortable. Best part is waving at all the oil trucks as they drive by!