A high efficiency furnace burning natural gas is presently the lowest cost home heating method although gas furnace prices are not cheap
When your 20 year old furnace has broken down once to often, and is at the point where you have no alternative but to replace it soon, the question you ask yourself is which fuel is going to be best?, and will cost least to heat your house. People generally find that natural gas with a high efficiency furnace is least expensive to use, but there are some questions which could influence the final decision.
Electricity has been the most costly home heating in the past. Oil heat cost a bit less, and natural gas was the lowest cost by a good margin. This is not always the case now due to the high and ever rising cost of both fuel oil and gas. Another consideration is that oil and gas prices fluctuate considerably with supply problems. A crisis in Middle Eastern countries results in an immediate jump upward in prices, and any large scale conflict in that area will result in possible constriction of oil supplies and very high prices. The gap between cost of oil or gas heat and the cost of electricity as a heat source has narrowed considerably. Development of the high efficiency furnace has aided greatly in keeping home heating costs lower.
Should oil and gas prices continue to move upward in the future, which is very likely, the cost of electrical heating may no longer be the highest. The cost of electrical heating has escalated less than the price of oil and gas over the past twenty years, and it seems probable that the price gap will become even less. At some future point it could be less costly to heat your home with electricity. When and if this will happen is a big unanswerable question. Presently it is still best to choose natural gas and a high efficiency furnace, and the majority of home owners make this their choice.