By
January 9, 2024
In rural northern Minnesota, natural gas is not available to most homes. For those where it is, the comparison matters — because infrastructure costs, long-term fuel economics, and supplier dynamics differ enough to meaningfully affect what you pay to stay warm for the next twenty years.
Availability and Infrastructure
Natural gas reaches a home through a distribution main owned and operated by a utility. If a main doesn't already run near your property, connection requires the utility to extend service — a cost that can run from $5,000 to $20,000 or more depending on distance, terrain, and your utility's rate structure. Some utilities subsidize extensions; others charge the full cost to the homeowner. Get a firm quote before treating natural gas as a realistic option.
Propane requires no utility infrastructure at all. A supplier delivers liquid propane to a tank on your property, and you draw from it as needed. Tanks can be leased from a single supplier or purchased outright. Propane is available to any property accessible by a delivery truck, which covers virtually all rural northern homes.
For the majority of rural northern Minnesota properties, the question isn't really propane vs. natural gas — propane is simply the only practical option. The comparison becomes relevant in towns and cities where gas mains already exist, or on rural parcels close enough to existing mains that extension costs are manageable.
Cost per BTU
Comparing fuel costs requires converting to a common unit. Propane delivers approximately 91,500 BTU per gallon. Natural gas delivers approximately 100,000 BTU per therm. To compare them directly, divide your local propane price per gallon by 0.915 to get the equivalent cost per 100,000 BTU; that number can then be compared directly to your natural gas rate per therm.
Propane generally costs more per BTU than natural gas when both are available. How much more varies considerably by region and fluctuates with commodity markets and local supplier competition. In some markets and years the gap is modest; in others it is substantial. Don't use national averages for this calculation — use current local prices.
Before making any infrastructure investment based on fuel cost projections, check actual current prices from local suppliers and your gas utility. Prices change. The spread that justifies a $10,000 line extension today may look very different in five years.
Equipment and Efficiency
Modern high-efficiency furnaces rated at 95% AFUE or better are available for both propane and natural gas. The hardware is nearly identical between fuel types — the primary differences are the burner orifice size and the gas pressure settings, both of which a qualified technician adjusts during installation or conversion. A propane furnace is not inherently less efficient or less capable than its natural gas equivalent.
Cold-climate heat pumps have become increasingly competitive as a primary heating source in the milder parts of Minnesota, particularly where design temperatures stay above -10°F. In the far north, where -20°F or colder is a realistic design condition, propane backup heating remains important for heat pump systems. Do not design a heat pump system for a northern climate without confirmed cold-weather performance data for the specific equipment you're installing.
When replacing any furnace, resist the temptation to simply match the output of the old unit. Old furnaces were routinely oversized, and an oversized replacement will short-cycle, wear faster, and heat unevenly. Have a Manual J heat load calculation performed for your home's actual envelope conditions before specifying a replacement size.
Making the Decision
If natural gas is available at your property and the connection cost is low or already paid, natural gas usually wins on long-term fuel cost. The infrastructure is in place, the fuel is cheaper per BTU, and switching away later is straightforward. If you're on a rural property with no gas option, propane is the standard choice and works well.
If you're on propane, one of the most valuable steps you can take is owning your tank rather than leasing it from a single supplier. A leased tank locks you into buying fuel from the company that owns it. An owned tank lets you solicit competitive bids from any licensed propane supplier in your area — and in a market with multiple suppliers, that price competition is real and worth having.
For resilience against supply disruptions and seasonal price spikes, consider pairing a propane system with a wood stove or pellet stove as a secondary heat source. A shoulder-season pellet stove or a well-placed wood stove can carry the house through mild cold snaps without burning propane at all, and it provides genuine backup when weather or supply issues interrupt your primary system.