With natural gas prices creeping higher on a daily basis, some homeowners dependent on natural gas for heat are starting to look for cheaper alternatives. In my area the outdoor wood burning furnace which is designed to supplement existing home heating has become a major source of friction among suburban residents.

The main complaint is the smoke produced by these furnaces as they heat water that is then pumped to the owner’s house where a heat exchanger disperses the heat. A loophole in U. S. Environmental Protection Agency rules has left such furnaces unregulated though many municipalities and states are now seeking to ban them or at least regulate them. Part of the problem is that some furnace owners don’t just burn wood; sometimes they burn household trash. Emissions from these furnaces have been measured by one government agency and the results are rather startling:

A 2006 report from the Northeast States for Coordinated Air Use Management, a nonprofit association of Northeast air quality agencies, found that average particulate emissions from one outdoor wood boiler equaled that of 22 wood stoves, 205 oil furnaces or as many as 8,000 natural gas furnaces.

The last wood heating craze occurred in the 1970s and abated when energy prices plunged and stayed mired in a 20-year bear market. But this time natural gas may be heading for a permanent decline in North America, and many homeowners throughout the United States and Canada will be scrambling for a more affordable source of home heat.

In rural areas, wood heat may become more widespread. But in heavily urbanized areas, coal may be the fuel of choice. It remains cheap relative to natural gas, and it is abundant. Moreover, some of the same manufacturers who make outdoor wood burning furnaces also make versions that will burn coal. Even indoor coal-burners are already available for homeowners. Finally, there are indoor and outdoor grain-burning furnaces.

The move to alternative sources of heat will put pressure on the remaining forests in North America as demand for wood and wood products for burning increases. This transition will also threaten the climate and air quality as coal-burning expands, and it has the potential to push grain prices even higher as homeowners compete for increasingly scarce grain to feed grain-burning furnaces. Electricity may also become a source of heat via portable electric space heaters, especially in the case of an acute crisis, and their use could potentially threaten the electrical grid.

There is, of course, solar space and water heating, and some people who have the resources will choose these options. But these options are not necessarily optimal for retrofitting in much of North America, and they can be costly to install (but not to run).

Neither heating oil nor kerosene will likely turn out to be good alternatives. Oil prices seem almost certain to remain high as we approach the all-time peak in world oil production. Propane, butane and liquefied petroleum gas (generally a combination of the first two) are simply products of natural gas wells and so will face the same depletion problems and price pressures as natural gas.

The alternative to this unfolding disaster would be an aggressive, subsidized energy efficiency retrofitting program for North American homes and a campaign to get people to use less natural gas by changing their behavior. But neither the Canadian nor the U. S. government seems even vaguely aware of the approaching crisis.

When an acute crisis arrives in the form of a very cold winter or a persistent decline in natural gas production, the result will inevitably be serious demand destruction. Many more homeowners will gravitate away from natural gas because of price uncertainties. Perhaps not so obvious is that whole industries dependent on natural gas for process heat or as a chemical feedstock will be forced to shut down and, where possible, may move operations closer to sources of cheap natural gas overseas, possibly to the Middle East or even to Russia where supplies remain abundant. (In fact, this has already happened for much of the nitrogen fertilizer industry and for parts of the chemical industry.)

The damage to the economy and the environment will be immense. And, the tragedy of it all will be that it could have been avoided or at least greatly mitigated by a sensible conservation program.