How to make water heating decisions if crude oil prices high

All types of water heating use energy and this energy is derived from different sources. It's true to say though that most energy is based strictly or more loosely on crude oil prices. Propane or LPG is closely related to oil and most electricity generating plants use either oil or natural gas or propane or LPG

Brent Crude oil prices. Water heating and crude oil price

Everybody is aware that crude oil prices have risen dramatically as follows (shown as approximate numbers and rounded off for clarity) ... Q4, 2004 average Brent crude oil prices = $43 per barrel

Q1, 2005 average Brent crude oil prices = $46 per barrel

Q2, 2005 average Brent crude oil price = $54 per barrel

Q3 (actual for July, August and to date September 9th) 2005 average Brent crude oil prices = $65 per barrel

If we translate these into % oil price changes you'll see that crude oil is now priced almost 50% higher than in Q4 last year. The direct impact is that you'll almost certainly be paying close on this high percentage increase to heat the same amount of water.

Take a look at this table

Energy factors impact showing annual cost of gas for different flows and different Energy factors before massive crude oil price increases

Water per day in gallons you want to heat	50	60	70
Annual cost 100% Energy factor before 50% increase in crude oil prices	$  70.29	$   84.35	$  98.41
Energy factors
0.45	$ 156.21	$  187.45	$218.69
0.5	$ 140.59	$  168.70	$196.82
0.55	$ 127.81	$  153.37	$178.93
0.6	$ 117.16	$  140.59	$164.02
0.65	$ 108.14	$  129.77	$151.40
0.7	$ 100.42	$  120.50	$140.59
0.75	$  93.72	$  112.47	$131.21
0.8	$  87.87	$  105.44	$123.01
0.85	$  82.70	$   99.24	$115.78

The table shows that energy factor makes a big difference to the amount of money you pay out annually just to heat different quantities of water.

Now if you have a low energy factor water heater and you're faced with 50% energy price increases you're being hit badly twice. Because of the high crude oil prices you need to evaluate whether the time has arrive to buy a new water heater for your home

Here's an example of what you could save by upgrading from a low energy factor water heater

Water Heating BEFORE SITUATION

To heat 50 gallons of water per day with 55% energy factor will cost you $127.81 and after 50% oil price rise this will increase to around $191.72

Water Heating AFTER SITUATION

Assume you upgrade to a new heater with 70% energy factor and you still heat 50 gallons of water per day

Your before oil price increase cost will be $100.42 and after 50% rise in crude this will become $150.63

Water Heating SAVING

The annual saving will be $127.81 - $100.42 = $27.39 if the oil price had not risen

However because of high crude oil prices (and these are forecasted to remain high) your saving by upgrading your water heater will become $191.72-150.63 = $41.09

This saving when ramped up for larger water heating quantities becomes significant and the savings can easily justify the buying of a very efficient (high energy factor) water heater.

In other words if you heat 200 gallons of water then saving will increase to about $164 per year.

This page was written to illustrate the relationship between 2 factors ... energy efficiency of a water heater and escalating energy prices due to crude oil prices increasing.

Use this a guide only. It illustrates that you need to seriously look at buying a more efficient water heater if you want to save money for a long time into the future..

Crude oil prices. Water heating Brent crude oil price. How to save energy costs