By CHRISTIE SMYTHE

While building a house in Eastham 10 years ago, John and Peg Spellman decided against heating it with oil - they'd had a leaky tank once, and thought it was too messy. Natural gas wasn't an option. No pipeline reached that far down the Cape.

But, they stumbled across something else: geothermal heating.

It works like this: Pipes draw groundwater into a special electric-powered pump that extracts heat energy from the water, which is condensed and distributed through a home. Colder water leaves the pump and returns to the ground.

In hot weather, the pump can be turned on in reverse, causing it to suck heat energy out of your home and transfer it to the water.

Water doesn't need to be especially hot for the system to work. At most places in the country, groundwater stays at a near-constant temperature of about 50 to 60 degrees, allowing geothermal heating and cooling systems to work almost anywhere, according to the U.S. Department of Energy.

At a time when heating oil and natural gas prices are expected to burden many Cape and islands residents with hundreds of dollars more in heating costs this winter, John Spellman said he was especially pleased with his choice.

Other than the electricity needed to work the pump, no other power sources are necessary to heat or air condition the Spellmans' 1,700-square-foot, two-story Cape-style home.

Although the cost of electricity is also going up, he said the savings are still significant. During the coldest months last year, his electric bill hovered around $220, he said.

In high-use months, a typical home burns about 140 to 180 gallons of heating oil, according the Massachusetts Oilheat Council. Based on the current statewide average price for oil, it would cost about $330 to $420 to heat a typical home during a winter month.

There are other benefits, too, Spellman said. The geothermal system is clean; it doesn't do anything to the groundwater except heat or cool it, he said. Also, there are no fossil-fuel burning smells, and Spellman said his house stays free of dust.

Popularity of the geothermal pumps surged when energy prices rose after Hurricane Katrina devastated the Gulf region, said Jessica Commins, spokeswoman for the Washington, D.C.-based Geothermal Heat Pump Consortium.

''Since Hurricane Katrina, our manufacturers are telling us their shipments have doubled,'' she said, adding that residential users typically save up to 70 percent on home energy bills during the winter and about 50 percent in summer.

Commins said there are about a million geothermal heating and cooling systems in use at homes and businesses throughout the country, and about 20 manufacturers of the pumps. Two of the largest are Fort Wayne, Ind.-based WaterFurnace and Oklahoma City-based ClimateMaster.

Federal tax incentives in the 2006 energy bill are also driving popularity, Commins said.

Geothermal systems are generally more expensive to buy than other heating sources, costing roughly $3,000 to $5,000 per ''ton'' of ''heating load,'' Commins said. A 2,000-square-foot home might have a heating load in the neighborhood of three tons, she said.

Atlantic Well Drilling, in North Eastham, the contractor that installed the Spellmans' system, ventured into geothermal heating and cooling about 15 or 20 years ago, owner Ron Peterson said.

The Cape is an especially good place to use the systems, he said, because of the abundant groundwater in the sandy soil.

In light of that, Peterson said he expects geothermal systems ''will become the dominant means of heating homes.''

So far, Peterson has installed about 100 geothermal systems over the past two decades.

But he said he hopes that people will eventually take more note of rising energy prices, and the benefits of finding an alternative heat source. In the last few months there has been ''much greater interest'' he said.

''Eventually, we're going to run out of fossil fuels,'' he said.

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