The House Project: Fun With Propane

We are going to be using propane for the cooktop, for the water heater, and for the furnace. It will also be the fuel for the emergency generator. Thursday I spent making calls and asking questions.

The obvious way to do this is an underground storage tank, both because aboveground tanks are unsightly, and because I really don't like the idea of a brushfire lighting up a thousand gallon tank of propane. But should we lease or buy the tank? The builder pointed out that if you lease, then you are tied to the propane vendor. If you buy, you can switch to a different vendor.

It turns out that in this area, there are only two real vendors to speak of: Suburban Propane and Amerigas. Amerigas won't lease underground storage tanks, and their purchase price for a 1000 gallon underground tank was $2942.40. Suburban Propane does lease the underground tank for $160 per year. Purchase price is about $2546. In both cases, if you buy the tank, you now have the cost of excavation and dropping it in. If you lease, they install it and run the line to the house. Let's see: at $2546 to buy or $160 per year, that's more than 15 years of leasing to buy the tank. Whatever advantage there might be to having multiple possible vendors of the gas, it is hard to see putting out that kind of capital on a tank--and then being responsible for maintenance of it.

How much propane will I use? Suburban thought it would be about 1400 gallons per year; Amerigas indicated that most customers use 500 to 1000 gallons a year. At about $1.79 a gallon, this would roughly equivalent to what we pay for natural gas here in Boise--and with the advantage that we are pretty much independent of the world for months on end. If al-Qaeda managed to disrupt our economy, and we were careful in our use of propane, we could live for many months without getting our tank refilled. Obviously, if we lost electric power, we would run through the gas rather more quickly.

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