Hi Dan,

A short addendum. To provide you with a better sense of the long term
trend for natural gas prices, the following table shows the average
retail cost per CCF in Washington state:

1997 - $0.564
1998 - $0.584
1999 - $0.588
2000 - $0.716
2001 - $0.979
2002 - $0.933
2003 - $0.843
2004 - $0.991
2005 - $ 1.180
2006 - $1.336

Source: http://tonto.eia.doe.gov/dnav/ng/hist/n3010wa3A.htm

N..B.: The source table shows the cost per 1,000 cubic feet, but I've
adjusted this to CCF, which is more appropriate for retail consumers.

From this, we see that the cost of natural gas heat is 2.4 times
higher than ten years ago. Interesting to note that in 1996, the
average retail cost of electricity in your state was $0.0503 per kWh
and as of 2006, it had increased to $0.0614 -- a 22 per cent increase
over an eleven year span (i.e., an increase that falls below the rate
of inflation).

Cheers,
Paul

On Fri, 14 Dec 2007 10:29:27 -0400, Paul M. Eldridge
wrote:

Hi Dan,

A standard billing measure for natural gas sold in the U.S. is a
"therm". One therm contains 100,000 BTUs. Alternatively, it is
sometimes sold in 100 cubic foot increments (CCF). Assuming a gas
furnace with an AFUE rating of 92 per cent, your net heat gain in
either case is about 27 kWh.

Natural gas prices can fluctuate widely from one year to the next, but
according the DOE, the average retail price for natural gas sold in
Washington state in 2006 was $1.34 per CCF. Again, assuming an AFUE
of 92 per cent, that puts the equivalent cost per kWh in the range of
$0.05. As of September 2007 (the latest month for which data is
available), it is $1.63 per CCF or $0.06 per kWh(e).

The current minimum HSPF or "heating season performance factor" for
air-source heat pumps is 7.7; like AFUE ratings, higher numbers are
better. A good quality heat pump with a HSPF of 8.5 will provide, on
average, 2.5 kWh of heat for every kWh of electricity consumed. If
you currently pay $0.08 per kWh, your effective cost per kWh of heat
falls closer to $0.03. On that basis, the operating costs of a high
efficiency natural gas furnace are 1.5 to 2.0 times higher than that
of our reference heat pump.

If my memory is correct, domestic natural gas production peaked in
1973 and the U.S. has been relying on natural gas imports from Canada
and Mexico to make up for the slack (and to a growing extent, LNG
imports from overseas). Canada's natural gas production has also
peaked and so I expect natural gas prices to trend upward going
forward (a succession of relatively mild winters and the loss of major
industrial consumers has helped to temporarily dampened prices, but
this won't last forever). Over the long haul, a heat pump would
likely outperform natural gas by a wide margin.

Hope this information is helpful.

Cheers,
Paul