The use of heating oil is not as prevalent in the United States today as it once was. The Northeast is the principal region where oil-fired equipment is still used today, though other areas of the country, including the Midwest and the Pacific Northwest, also have spots where oil-fired equipment is installed. According to Florian Wisinski, product manager, firetube boilers, Cleaver Brooks – Package Boiler Group, “There are some small pockets where natural gas is not available, however these pockets continue to decrease. The demand in the States for No. 2 oil only is small, estimated at less than 3 percent.”

The demand for heating oil affects and is affected by sales of oil-fired HVAC products. The decrease in this type of equipment can be seen in recent Air-Conditioning, Heating, and Refrigeration Institute (AHRI) U.S. factory shipment numbers. According to the AHRI August 2009 U.S. factory shipment numbers, (the latest month for which AHRI released data at the time of this writing), the January through August 2009 gas-fired, warm-air furnace shipments totaled 1,228,454, with 171,539 of those units shipping in August alone. In contrast, oil furnace shipments for the year-to-date totaled 26,137, with 4,611 being shipped in August.

In 2004, U.S. oil furnace shipments totaled 129,715 and have continually decreased each year, reaching a low of 59,255 oil furnace shipments in 2008. U.S. factory gas furnace shipments also have dropped between 2004 and 2008, but were at a high of 3,519,024 and fell to 2,279,677 in 2008.

Looking at oil-fired boilers, 2004 U.S. factory shipments for this kind of unit attained a total of 162,468. Shipments of oil-fired boilers have steadily declined since then, falling to a total of 88,140 oil-fired boilers shipped in 2008. In contrast, U.S. factory shipments of gas-fired boilers reached 236,964 in 2004, and declined to 197,724 in 2008.

Of the several manufacturers that addressed The NEWS’ questions on oil heating trends, they all seem to agree that there’s a connection between the shrinking of the oil-fired product market and the cost of oil.

“Oil-fired product sales have varied over the last several years based on fuel oil prices and the ever-changing (up and down) interest in fuel conversions (from oil to gas),” said Ken Niemi, marketing manager, Burnham - U.S. Boiler Co. Inc.

Stephanie Pitts, product manager for Trane and American Standard Heating & Air Conditioning concurs. “Sales have been decreasing because of the significant price increases in heating fuel and the desire to have more energy-efficient products in the home (oil furnaces max out around 85 percent AFUE, whereas gas furnaces are widely available in 95 percent-plus AFUE.)”

Wisinski summed it up, saying oil-fired products are “typically decreasing … [because] natural gas supply is abundant and cost low.”

Other factors besides the price of oil have also affected the oil-fired equipment market, according to Lori Boyce, heating product manager, Allied Air Enterprises. “Federal tax incentives for high-efficient natural gas products, geothermal technology acceptance and demand (aka “cleaner substitutes”), rising oil prices (summer 2008) are just some of the contributing factors to softened demand for oil products.”


At least in the near future, the oil-fired HVAC products quarter looks as if it will continue to be affected by oil prices and natural gas.

Robert Sycks, director of sales, Heat Controller said “I expect that when the economy recovers, we will see oil prices going back to the range we saw in 2006 and 2007. If that happens, then oil furnaces will decline in direct proportion.”

Wisinski commented that natural gas and other factors such as regulations would persist in impacting use of heating oil. “Natural gas supply and demand along with cost and emission requirements have a large impact on No. 2 oil. The direction is lower emissions, which means a decline in No. 2 oil usage since emissions are much lower with natural gas. High natural gas demand can cause curtailment, resulting in the use of No. 2 oil during curtailment periods.”

Pitts foresees the decrease in oil-fired equipment to continue “because of the continued focus on energy-efficient appliances.”

Boyce offered an idea for the oil-fired equipment sector to improve sales, but warned that the sector might not improve otherwise. “Without new technology for higher-efficient oil products, it would be difficult to predict an upswing. The industry will need to collaborate and share technology. Business cases are difficult to vet in viewing the trends we have seen since 2004.”


Besides natural gas, propane, and No. 2 heating oil, other fuels are out on the market to heat and/or cool a building, ranging from solar energy to wood pellets. One type of fuel used in oil-fired equipment by a small number of contractors is Bioheat - a blend of heating oil and biodiesel.

Some oil-fired HVAC equipment manufacturers’ products are intended for use with petroleum-based No. 2 heating oil only. And when it comes to the future of alternate fuel sources used in oil-fired products, Sycks stated, “I think that combination or other fuel sources will be a niche market.”

While some oil-fired HVAC equipment companies’ products are intended for use with petroleum-based No. 2 heating oil only, others accept use of other fuels in those units. Niemi said, “Residential oil-fired boilers use standard heating oil, and with appropriate burners can use biofuels.”

Even when biofuels are used in oil-fired HVAC equipment, the amount of biofuel in the blend is important to note. “We have seen almost no demand for other oil-fired boilers [than petroleum-based ones]. A few industrial applications have used soybean-based oil, however we require a blend of 75 percent petroleum-based oil and 25 percent soybean oil,” commented Wisinski.

Another “alternative” to solely petroleum-based oil-fired equipment is units that use both natural gas and heating oil. According to Wisinski, Cleaver Brooks offers commercial and industrial boilers that operate using natural gas as the main fuel and No. 2 oil as the backup fuel.

What the future holds in store for the oil-fired sector - a continual decline in oil-fired equipment sales, growth of fuel sources other than 100 percent No. 2 heating oil or something else - will ultimately be illuminated by time.

Publication date:11/23/2009