Benefits of Natural Gas

Natural gas is a clean, efficient source of heat that can be used to heat our homes, businesses and schools as well as keep the air we breathe fresh and clean!

Breathe Easier

Natural gas, the cleanest fossil fuel, is a highly efficient form of energy. It is composed chiefly of methane; the simple chemical composition of natural gas is a molecule of one carbon atom and four hydrogen atoms (CH4). When methane is burned completely, the principal products of combustion are carbon dioxide and water vapor.

Natural gas advantages over other fuels include the following: it has fewer impurities, it is less chemically complex, and its combustion generally results in less pollution. In most applications, using natural gas produces less of the following substances than oil or coal: carbon dioxide (CO2), which is the primary greenhouse gas; sulfur dioxide, which is the primary precursor of acid rain; nitrogen oxides, which is the primary precursor of smog; and particulate matter, which can affect health and visibility.

Source: American Gas Association

Cost Savings

Households that use natural gas for heating, cooking and clothes drying spend less per year than homes using electricity. Even in a low oil-priced market, Fairbanks North Star Borough residents and businesses can look forward to cost savings with clean natural gas. Due to the savings from natural gas, some customers choose what home they buy based on whether the home has natural gas or not.

Air Quality

The FNSB suffers from poor air quality in times of extreme cold temperatures. As the temperature decreases, heating fuel use increases causing PM 2.5 issues to rise. This pollution has gotten so bad, that the EPA has identified the FSNB as a non-attainment area, requiring a plan to reduce these air-pollutants. This plan is being developed with the State of Alaska, and includes the successful distribution and delivery of natural gas to the Interior.


Natural gas is a safe fuel to use in your home or business. Because it has a limited range of flammability, there must be an exact composition of natural gas and air to mix together before it can burn. As natural gas is lighter than air, it can safely rise and disperse if vented correctly. Mercaptan is injected into natural gas distribution lines so that humans can detect if there is a leak, even if it is a very small amount. It smells like rotten eggs and dissipates with natural gas when released.

How is Natural Gas Measured?

Natural gas is delivered to your home through a network of underground pipes. The piping comes out of the ground at the service riser and connects to the gas meter. IGU uses the gas meter to measure the amount of natural gas used by the customer. Residential and smaller commercial buildings have meters attached to the building. Larger commercial buildings have meters that sit on ground level.
The meter measures the volume of gas by counting the number of times a set volume passes through the meter. Each click of the dial represents 100 cubic feet, also called a CCF. To provide an example, an average home in Fairbanks may use 250 CCF or 25,000 cubic feet of gas in a typical January, when natural gas is used for heating only. For reference, 250 CCF of natural gas equates to about 190 gallons of #2 heating oil based on BTUs alone.

What is a BTU?

The heating industry calculates units of energy in British Thermal Units or BTUs.

BTU = the heat required to raise the temperature of one pound of water 1 F°.
BTU = approximately the heat in one wooden match.

BTU Comparison of local fuels:
1 cubic foot of natural gas 1,000 BTUs
1 gallon of #1 fuel oil 132,000 BTUs
1 gallon of #2 fuel oil 138,000 BTUs
1 gallon of HD5 propane 91,700 BTUs
1 kWh of electricity 3,413 BTUs
1 ton of wood pellets 13.9 million BTUs
1 cord white birch 20.3 million BTUs

– The national average for natural gas is 1,000 BTU/cf. IGU gas has 1,000 BTU/cf.
– BTU rating for #1 and #2 Fuel oil provided by the Cold Climate Heating Research Center.
– BTU rating for coal provided by North Pole Coal.
– BTU rating for wood pellets provided by Superior Pellets.
– BTU rating for white birch based on 1 year seasoned.

What are the Costs of Heating?

Many customers are interested in how natural gas costs compares to other sources of energy. Listed below are few of the energy sources available in the FNSB area.

Cost comparison of other local fuels:
Natural gas $2.081 per 100 cubic feet
#1 Fuel oil $3.12 per gallon
#2 Fuel oil $2.98 per gallon
Propane $3.49 per gallon
Electricity $0.23662 per kWh
Wood pellets $330 per ton
White birch $400 per cord

Natural Gas: $2.081 per 100 cubic feet for residential use as of last tariff rate change effective 09/17.
#1 Heating Oil: Average price #1 Home Heating Oil for 500 gallon delivery in 01/2020.
#2 Heating Oil: Average price #2 Home Heating Oil for 500 gallon delivery in 01/2020.
Propane: Average of current pricing. Cost used for demonstration only.
Electricity: GVEA residential rate 03/2020, includes $0.12697 utility charge and $0.10965 fuel and power charge.
Wood Pellets: Superior Pellets price as of 03/2020.

Wood: White birch seasoned 1 year cut, split and delivered 03/2020.

How Does Natural Gas Compare to Other Energy Sources?

The energy and fuel delivered to homes and businesses come in differing units, such as cubic feet, gallons or kilowatts. To fairly and more accurately compare them, the units are broken down into comparable units of heat, such as a BTU. To find the cost per BTU of natural gas we simply divide the cost per cubic foot by the BTUs in a cubic foot of gas:

$0.02081/cubic foot
1,000 BTU/cubic foot

= $0.00002081 / BTU
$20.81 / million BTU of Natural Gas

Do the same for heating oil and others:

Cost per million BTUs comparison of local fuels:
Electricity $70.32
Propane $38.06
#1 Fuel oil $23.64
#2 Fuel oil $21.59
Natural gas $20.81
Wood pellets $23.52
White birch $19.70

Natural gas can now be directly compared to other fuels, such as #2 heating oil. Take the computed cost per BTU of natural gas and multiply this number by the number of BTUs in a gallon of heating oil:

$0.00002081/BTU x 132,000 BTU/gallon
$2.75 per gallon equivalent


Natural gas costs less when heating oil is greater than $2.75 per gallon (residential).

Please note this information is based on a BTU comparison only. Natural gas is competitive to heating oil. Another consideration that must be used is the efficiency of your heating equipment. If you are interested in current residential or commercial rates or have questions regarding the figures above, please call our office at 452-7111.

What is a Heating Degree Day?

According to the American Gas Association (AGA) the definition of a Heating Degree Day is:

“A measure of the coldness of the weather experienced, based on the extent to which the daily mean temperature falls below a reference temperature, usually 65 degrees F.”
For example: If the high temperature on December 9 was +13 F° and the low was -4 F°, than the average daily temperature was +5 F°. The difference between +65 F° and +5 F° is 60 F° giving us 60 heating degree days.

IGU uses heating degree days to gauge how warm or cold a certain billing cycle, month, season or year has been. Depending on how warm you keep your home or building, you can compare your fuel usage to seasonal averages or other comparisons. The average annual heating degrees for Fairbanks are about 14,000 heating degree days. IGU maintains the historical records of the heating degree days and are available at the office.

Find more information on natural gas on our FAQ’s page.

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