Nick,
You assumed oil heating the water, I assumed gas. Although my gas
rates may be off a bit, he did not say what he is heating the water
with. Also the calculations assume the water is completely warmed to
room temperature each time, which is not likely. There are a lot of
suppositions involved here, most of them are overblown. The daily
savings are likely exagerated to the extreme. Also, pipe insulation
slows down the rate of heat transfer and increases the area of surface
area exposed to ambient conditions. It does not stop heat transfer.
As well, as the temperature in the pipe approaches room temperature of
the basement, heat transfer slows down, so it will take too long for
all this heat transfer to tane place. Certainly each complete
temperature change is not likely to take place in in 36 minutes. So an
apology is not likely. Still not enough cost to worry about.

Stretch