Why this question keeps coming up in Duluth
Duluth has one of the highest concentrations of fuel-oil-heated homes in Minnesota — a legacy of the city's pre-natural-gas housing boom in the early-to-mid 1900s. As fuel oil prices climb and natural gas service expands, more homeowners than ever are weighing whether to convert. We get this question multiple times a week.
The 2026 fuel price picture
At current Northland prices (May 2026), No. 2 fuel oil runs roughly $3.85 per gallon delivered, while natural gas runs roughly $1.05 per therm including delivery and demand charges. Per million BTU delivered to the boiler, that's about $27.50 for fuel oil and $10.50 for natural gas — before factoring in equipment efficiency.
Equipment efficiency multiplies the gap
A typical 1990s fuel oil boiler runs at 80–82% combustion efficiency, with seasonal efficiency closer to 75% after standby and idle losses. A modern condensing natural gas boiler runs at 95% AFUE — meaning 95% of the fuel's energy actually heats your home. After accounting for both fuel cost and equipment efficiency, a typical 2,200 sq ft Duluth home will see its annual heating bill drop from approximately $3,400 (oil) to approximately $1,350 (gas) — a 60% reduction.
Conversion cost and payback
A full oil-to-gas conversion in a typical Duluth home runs $9,500–$14,000 installed, including the new boiler, near-boiler piping, venting, gas line extension (if needed), and removal of the old oil tank. At a $2,000/year savings, simple payback is roughly 5–7 years — usually less because Comfort Systems rebates and federal high-efficiency tax credits can shave 10–20% off the up-front cost.
What about propane?
For homes outside the natural gas service territory, propane is the next-best option. Propane condensing boilers achieve the same 95% efficiency, but at roughly $2.80/gal propane runs about $20.40 per million BTU delivered — better than fuel oil, not as cheap as natural gas. We design and install propane condensing boilers regularly for homes in Carlton, parts of Pike Lake, and outlying areas.
What we do during a conversion
Every conversion starts with a computerized Manual J heat loss calculation — not a thumb-rule based on the old boiler's size, which is almost always over-sized. From there we size the boiler exactly, design the near-boiler piping using primary-secondary topology, and run LoopCad on any infloor zones. We pull all permits, coordinate with the gas utility, and handle the old oil tank removal.