Who ever thought we would celebrate oil going through $100? Crude prices have dropped close to 40 percent since shooting the moon at prices near $150 a barrel on July 11. In other Nymex trading, heating oil futures fell 7.12 cents to $2.72 a gallon, while gasoline prices dropped 10.04 cents to $2.461 a gallon. Natural gas for October delivery fell 8.7 cents to $7.29 per 1,000 cubic feet.

Anne’s hot flashes are so bad that she thought Global Warming was her fault and Al Gore keeps following her around.

I rather wish we could bottle that.

Oil is still waaaaay too expensive to burn.

We also have no cattle barn from which to bottle methane. The ground water heat pump presents too many obstacles to install this year. Coal is too difficult to use here. An outdoor wood furnace gives up too much heat to the outdoors and makes us slog through the snow in the middle of the night. That means we’ve decided to buy something that burns wood pellets.

Is a pellet stove really cheaper to run?

Pellets cost not less than $199/ton. The average is about $250 and the highest I’ve seen so far is $300. Pellets give up 24,500,000 BTU/ton. Most pellet stove makers advertise 75-80% efficiency although I used 70% in the spreadsheet last week. The numbers work even at 60% .

Oil will still be there as a fully automated backup, right?

Oh, yeah.

No matter what we do, I’ll either leave the existing oil fired boiler or upgrade the oil fired boiler. A pellet boiler would either be an add-on or have its own oil burner as a backup. The heat pump is more difficult because I can’t reliably get its transfer liquid hot enough to run our baseboards and its power draw would be more than I have generator capacity for during a power outage.

There must be a catch.

The downside to a pellet stove or furnace is its need for electricity. Unlike the wood stoves we rely on now, a pellet stove has two or even three fans and an auger without which there is no fire. If the power goes out today, we can crank up the wood stoves and keep from freezing, If the power goes out when we have a pellet something and an oil-fired boiler or an electric heat pump, we lose all our heat.

There is also the little matter of loading pellets by the ton.

What’s the Bottom Line?

I don’t know how to justify a pellet furnace on cost alone. The models I’ve found would heat the entire house at a capital cost two to four times that of a pellet stove and the savings fall in the diminishing returns category.

So. We’ll continue using the oil furnace as back up. The Vigilant, a wood stove now in the great room, will move to the living room. A pellet stove gets installed in the great room. Just as soon as I find one.

I narrowed the pellet burning field down to a few reliable products with automatic operation that runs on a thermostat, multiple heat settings, and cast iron construction. I have investigated Brosley, EKO-Vimar, Harman, Pinnacle, Viessman, and Woodmaster pellet furnaces as well pellet “parlor” stoves from American Energy, Bixby, Bob England’s Stove Works, Enviro, Harman, Hearth and Home Technologies, Pelpro, Thelin, and Whitfield.

The Harman PB-105 furnace or Harman Accentra stove at the top of my list are sold out until late next Spring.

I’ve chased stoves and furnaces from dealers in places wood burning appliances don’t sell nearly as well as they do here in New England. That search has yielded no furnaces and darned few stoves. I thought about going a little farther afield, like Florida or Arizona except Florida and Arizona probably don’t burn coal or wood because they think the economics of transporting the solid fuel is against them.

That brings us to an interesting fact.

Last year, we burned about 5 tons (10,000 pounds) of oil plus a couple of tons of firewood. If we switch to coal, pellets, or chunk wood, we will burn about 7 tons of coal, or 7 tons of pellets, or 7 tons of firewood.

Next time, I’ll tell you all about which pellet stove we bought and how I installed it.

I’ll send $5,313 to Saudi Arabia this winter. I’ll receive $720 back in ExxonMobil dividends.

There is an inequity there and it bugs me.

I am pugnaciously–perhaps pathologically–parsimonious so I decided to do something about it.

Let’s start with the facts. That $5,313 check I will write won’t all go to Saudi Arabia. Some of it will go to Hugo Chavez. Some will go to the shipping companies and the refineries and the distributors. Some will end up in the pockets of speculators who drove the market to nearly $150/barrel. And some will stick locally because I do, after all, buy my oil from a local fellow who has taken care of us, winter and summer, for 30 years.

As an aside, I’m hoping the foreign oil speculators discover what the holders of junk mortgages already know.

We have already done (some of) the things one is supposed to do when one lives in a leaky old farmhouse on the 45th parallel. We have storm windows. We have insulated. We have turned down the thermostat so far that even the neighbor’s cat is cold and he has a fur coat. We burn as much firewood as one can put through a Vermont Castings Vigilant. We still burned more than 1,200 gallons of dead dinosaurs last year and the Old Farmer’s Almanac says this year is going to be colder.

I’m an engineer so I made a spreadsheet before I did anything else.

We already knew that our current oil burner needs to be history. It is 30 years old, inefficient, and not likely to heal itself. I could simply swap it out for a new “mid-efficiency” oil burner, but the bottom line isn’t much better. Propane or LP Gas is not enough better to pay for the conversion, especially since its pricing here is so volatile.

OK, then. We’ll look at the good choices from best to worst.

I would have loved to install a ground water heat pump but there are a few kinks to work out. Kink #1: no one in this area sells and services them yet and I don’t have time to dig the ground loop myself. Kink #2: It does draw a lot of increasingly expensive juice and losing our heat each time we have an ice storm is a serious worry. Saving 80% is a real boon, though, so we’ll hang on to that idea.

To burn corn pellets requires a pellet furnace or stove and the ability to handle bulk fuel. It also means taking the food out of the mouths of the cows I eat, so I simply won’t consider that one.

An air heat pump works a lot better in Florida than in Vermont. The worry about the increasing cost of drawing power from the grid and of losing our heat with each ice storm remains.

Wood Pellets are a pretty good choice. The furnaces and some stoves are automated so they keep running (or stopping) when we stop paying attention or leave the building, just like a regular heating system. And the operating cost looks like it’s pretty good.

I grew up in a house heated with coal. That was before the advent of “clean coal” and it wasn’t. Coal is harder to find here, more expensive, and harder to use than pellets. That’s out.

There is no natural gas in northern Vermont. Yeah, yeah, Vermont has lots of cows but I haven’t managed to get the pipeline hooked up from Jack’s barn down the road.

Solid wood remains a good choice. No electricity needed. Local harvesting. Reasonable cost. Unfortunately, it is still less efficient than other wood burning equipment and it is much more work for the homeowner.

Plugging in electric radiant heaters has all of the other grid-based disadvantages plus relatively high cost. That’s out, too.

Next time, I’ll tell you more than you ever wanted to know about buying a pellet stove in 2008.