I know a lot of mom and pop stores make a living on oil heat but with pellets at more than 1/2 the cost of oil to heat ones house have they any comeback.In the past 5 years the N E usage went from 6.5 billion gallons to 4.5 billion gallons of oil and it keeps dropping as the price goes up.Soon nobody will heat with oil, is this industry done have the traders on wall street pushed the price to high just lets hope wall street does not make wood pellets a commodity to trade as it is an essential and its cheap therefore a potential profit for these traders.I would like your opinions.
Does the heating oil industry know that all their customers are leaving or do they even care
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turbulator
Member
jmcp said:
The less they sell, the higher the price will be....it will exponentially price itself out of the market....
Pellet-King
Minister of Fire
Not many banks will write a mortgage for a house with pellets as the primary heat source. Propane is just about as expensive as oil and natural gas is not availlable in most of Maine and NH and even if it is there is no profit in residential distribution so unless you are on a street with gas oil is about the only choice although there is a group pushing off peak electric storage systems as an alernative to oil but it requites some substantial changes to the rate structure.
#2 heating fuel is bascially off road diesel with possibly a slightly different additive package. Its going to track the price of diesel. There is a pretty good infrastructure for shipping diesel around so it wont disapear but as the price goes up the incentive for conservation will increase.
#2 heating fuel is bascially off road diesel with possibly a slightly different additive package. Its going to track the price of diesel. There is a pretty good infrastructure for shipping diesel around so it wont disapear but as the price goes up the incentive for conservation will increase.
Harman Lover 007
Minister of Fire
This country's reliance on oil will never go away, it just can't. Just because we have figured out a way to avoid the high price of oil doesn't mean most folks would. As we all know, owning a pellet stove is quite a bit of work that still, MOST people wouldn't even consider doing.
Just got 111 gallons of oil at $3.699 a gallon. First delivery since May 2011. The pellet stove is more work for sure, but keeping the house in the low 70s at a bag a day is OK with me and using only a fraction of oil is worth the hassle of cleaning the stove once a week and stacking the pellets in the garage.
And your right about the banks not doing a mortgage without a traditional heating source. However, that doesn't mean you have to use oil like a glutton. I would like to see more new houses utilize bio-mass, wind mills, solar and geo-thermal and rely less and less on oil and other fossill fuels. Hell, even if we can clean up coal that would be a major victory.
And your right about the banks not doing a mortgage without a traditional heating source. However, that doesn't mean you have to use oil like a glutton. I would like to see more new houses utilize bio-mass, wind mills, solar and geo-thermal and rely less and less on oil and other fossill fuels. Hell, even if we can clean up coal that would be a major victory.
ironpony
Minister of Fire
thank god I moved to Ohio 20yrs ago
do not miss
oil heat, high electric, traffic, taxes.................
well you get my point
do not miss
oil heat, high electric, traffic, taxes.................
well you get my point
My local propane dealer informed me that next season he intends to carry several lines of pellet stoves and also several brands of pellets. He says that he's tired of loosing business, when can compete in the same market with the same products, for a minimal investment. Only major outlay is a fork lift.
RKS130
Minister of Fire
I think the answer depends on how you define "the heating oil industry". If we are talking about the refiners and wholesalers, the answer is an unqualified "they could care less". On the other hand, the local dealers and the independent truck owner/operators I suspect care a lot, but are probably still selling as much as they can deliver, more or less, and may have adjusted the retail price to compensate for any drop n volume sold. I would be interested to know what the drop off in sales has been - if any - on a local level.
As an aside, the day my stove was installed (10/24/11) the oil truck pulled up just 20 minutes after the install team had left. I was topped off with 131 gallons at $3.899 + 3% tax, or just over $526
. In talking with the driver I learned that his father owns the company he drives for and his father has a pellet stove. Veeery interesting.
As an aside, the day my stove was installed (10/24/11) the oil truck pulled up just 20 minutes after the install team had left. I was topped off with 131 gallons at $3.899 + 3% tax, or just over $526
. In talking with the driver I learned that his father owns the company he drives for and his father has a pellet stove. Veeery interesting.
mrjohneel
Feeling the Heat
Is anyone fearful that more people owning pellet stoves equals more demand for pellets, equals decreasing supply of resources to make pellets, equals rising costs for pellets? I am.
RKS130
Minister of Fire
My guess is that, at least for now, there is excess supply of raw materials for pellets and as demand increases manufacturing capacity will follow. It is also my guess - and purely a guess based on nothing but what little I know of human nature - that the number of us who will do the extra work to feed and maintain a pellet stove and who have the ability to store pellets is self limiting, so - again a guess based on nothing - I don't think we will be priced out of the market and in any event pellets will always be a lower cost alternative to oil, electricity (especially when Obama closes down the coal fired plants) and gas. Just a guess.
Pellets are a commodity. A few winters ago when oil was $4.26/gallon pellets were selling for $360+/ton if you could find them. Many could not find them. I think people getting sick of the high price caused them to go back to oil causing an excess of supply and driving the price back down to $200/ton.
The price will go up again. We only need another oil price rise. Something like Iran trying to close off the Strait of Hormuz.. where 30% of the worlds oil passes.
Matt
The price will go up again. We only need another oil price rise. Something like Iran trying to close off the Strait of Hormuz.. where 30% of the worlds oil passes.
Matt
ironpony
Minister of Fire
something noone thinks about with oil products, it is not driven by supply demand as much as other products
the oil companies need X number of dollars to operate
drilling, reseaerch, overhead in general
if consumption goes down, they still need X dollars
price has to stay the same or increase to make up for lower volume
and as was stated above as far as pellet prices/demand
most people are not going to do the work to save the money
I dont think we will ever have shortatges
the oil companies need X number of dollars to operate
drilling, reseaerch, overhead in general
if consumption goes down, they still need X dollars
price has to stay the same or increase to make up for lower volume
and as was stated above as far as pellet prices/demand
most people are not going to do the work to save the money
I dont think we will ever have shortatges
Bigjim13
Minister of Fire
Keep in mind, if pellets get to $280-$360 per ton, its not worth it to burn them to me. At that point its cheaper or at least breaking even to burn oil even at $4 per gallon and I dont have to do the upkeep that a pellet stove requires. IF I wasn't saving a boat load of money, I wouldnt burn. Yes I love the fact that I am not dependent on oil and love the fact that its greener, but cash is king and when times are tight you can only stretch the dollar so far. I WON'T pay $300 per ton to heat my house.
Bigjim13
Minister of Fire
djs_net said:
Dollar for dollar yes, its still technically cheaper to heat with pellets. But how much is your time worth? Between getting the pellets, stacking, bringing them into the house, filling the stove and cleaning? When all you have to do with oil is hit a button? The last full season I burned oil, I went through 550 gallons.
550*3.75=2062.50
I usually burn 4 tons so
$280*4= 1120
Then there is the time involved. Just saying, to some its not worth it.
Bigjim13 said:
I've averaged about 700 gals of oil per year. At $3.50/gal, that's $2,450.
This is my first year burning pellets but I doubt I'll burn 4 tons so even at $300/ton that's only $1,200.
I understand that time is worth money, but with the help of my wife and 2 sons with the stacking and cleaning, it seems like a no-brainer to save $1,250 on heating cost. (Actuallya little less, because I still use oil for hot water)
Bigjim13
Minister of Fire
djs_net said:
For you it is a no brainer, for me to so far. But the idea of the thread is that oil prices are driving customers away. All I am saying is that there is a point when pellet prices go up and oil comes down that its not worth it. 3 seasons ago oil was out of sight cost wise, lots of people put in pellet stoves. 2 seasons ago gas prices were $1.8/gal and I could get heating oil for $1.95/gal while pellets were still in the $220-270 range. At that point everybody said we would never see that price again for oil and we havent, but its not out of the realm of possibility.
76brian
Feeling the Heat
mrjohneel said:
Yup.
Go forth and tell everyone what a pain in the ass they are, how expensive they are, and how they don't have good heat
More pellets for us!
mrjohneel
Feeling the Heat
I'm not complaining; just observing. But I did use the same strategy during the boom years when people were complaining about the expense of golfing and the time involved. "Yes," I'd concur, while putting my clubs in the trunk. "It's a stupid, time-consuming sport. You should give it up."
The only way to escape the commodity aspect of any fuel is to cut or scrounge your own trees to burn. If prices go up too much, there won't be anything left to scrounge.
MAtt
MAtt
djs_net said:
Keep in mind that my house is not well insulated and is fairly drafty, so the estimates I've given for oil usage were to keep my house around 62*. We haven't seen the dead of winter yet, but I have been able to keep my house temp at 68-70 so far with the stove.
To keep the thread on topic, I expect a "Where have you been?" comment from my oil guy when I finally do call him for a fill.
save$
Minister of Fire
What I have seen is that we now have no shortage of pellets in this area. There are many more pellet outlets, many more plants making them, and the generally, the prices are a whole lot better than they were in 2008. Same for stove options.
I don't think the "oil industry" has any fear about loosing their customer base. What they don't sell for heating oil can easily go into many other markets both here and overseas. With all the so called green people on the loose, government is too afraid to do anything that will lead us to being oil independent. Every time an alternative to oil comes up, some "friends of the ....." will come to the surface. Put a windmill up in the wilderness, try hydro-power, manage the tides, will brings hordes of "save the..." out of the wood work. About the only thing I haven't seen this bunch demonstrate against is solar power and marijuana clinics.
I don't think the "oil industry" has any fear about loosing their customer base. What they don't sell for heating oil can easily go into many other markets both here and overseas. With all the so called green people on the loose, government is too afraid to do anything that will lead us to being oil independent. Every time an alternative to oil comes up, some "friends of the ....." will come to the surface. Put a windmill up in the wilderness, try hydro-power, manage the tides, will brings hordes of "save the..." out of the wood work. About the only thing I haven't seen this bunch demonstrate against is solar power and marijuana clinics.
jtakeman
Minister of Fire
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