How Much Natural Gas Do We Have to Replace Gasoline?
How Much Natural Gas Do We Have to Replace Gasoline?
Posted by Robert Rapier on July 30, 2009 - 10:06am
Topic: Alternative energy
Tags: gasoline, natural gas [list all tags]
You may have seen the recent news that a report by the Potential Gas Committee says natural gas reserves in 2008 rose to 2,074 trillion cubic feet. The New York Times and the Wall Street Journal (via Rigzone) both had stories on it, and T. Boone Pickens issued a press release. In this post, I will look at how long these reserves might last, if used to replace US gasoline usage.
How Much Do We Need?
The U.S. currently consumes 390 million gallons of gasoline per day. (Source: EIA). A gallon of gasoline contains about 115,000 BTUs. (Source: EPA). The energy content of this much gasoline is equivalent to 45 trillion BTUs per day. The energy content of natural gas is about 1,000 BTUs per standard cubic foot (scf). Therefore, to replace all gasoline consumption would require 45 billion scf per day, or 16.4 trillion scf per year. Current U.S. natural gas consumption is 23 trillion scf per year (Source: EIA). Therefore, replacing all gasoline consumption with natural gas would require a total usage of 39.4 trillion scf per year, an increase in natural gas consumption of 71% over present usage.
Assuming for the sake of argument that the 2,074 trillion standard cubic feet cited in the study is accurate, that the "probable, possible and speculative reserves" eventually equate to actual reserves, and that the gas is economically recoverable, that is enough gas for 53 years of combined current natural gas consumption and gasoline consumption. If you assume that only the proven plus probable reserves are eventually recovered, the amount drops to about 1/3rd of the 2,074 trillion scf estimate, still enough to satisfy current natural gas consumption and replace all gasoline consumption for almost 20 years.
We can also calculate in terms of oil imports. Right now the U.S. imports about 13 million barrels per day of all petroleum products. A barrel of oil contains around 5.8 million BTUs, but oil only makes up 10 million of the 13 million barrel per day figure. Other imports include things like gasoline (4.8 million BTUs/bbl) and ethanol (3.2 million BTUs/bbl). Scanning the list of imports, I probably won't be too far off the mark to presume that the average BTU value of those 13 million bpd of imports is about 5.4 million BTUs/bbl. On an annual basis, this equates to 25.6 trillion scf of natural gas, which would be an increase over current natural gas usage of 111%. Going back to the 2,074 trillion scf from the study, this would be enough to displace imports of all petroleum products (again, at current usage rates and not factoring in declining U.S. oil production) for 43 years.
What's the Cost?
Natural gas is presently trading at about $4 per million (MM) BTU (although December 2009 is trading at almost $6). Oil is presently trading at $71/bbl, which equates to $12.24/MMBTU. Gasoline is presently trading at over $17/MMBTU. Thus, natural gas is a bargain relative to oil or gasoline. Incidentally, I just checked on seasoned wood and wood pellets, and they range from $8-$12/MMBTUs. So it is cheaper to heat your house with gas than with wood. I am not sure I would have guessed that.
While natural gas is a bargain relative to gasoline, converting a gasoline-powered vehicle to natural gas isn't cheap. According to this source, it can cost $12,500 to $22,500 to convert a gasoline-powered car to natural gas. Honda makes a compressed natural gas (CNG) vehicle, but according to this review in Car and Driver the premium over the gasoline version is $8,780. A person would need to drive an awful lot to justify that premium. However, that's what fleets do. They drive a lot. The large price differential explains why fleets would be interested in running their vehicles on natural gas.
Conclusions
So, the good news is that the United States could be energy independent if the newly released natural gas reserve numbers are remotely accurate. It also appears that we have enough natural gas available that civilization isn't going to end any time soon due to lack of energy supplies. There are three caveats. First, energy independence via natural gas could require us to spend significantly more for personal automotive transportation. Second, "possible" reserves may never materialize. Finally, a large chunk of the calculated reserves are based on shale gas, and that requires gas to be in the $6-$8/million BTU range to be economical. Still, it is a bargain compared to gasoline, and it explains why fleets are more receptive to conversion to natural gas than the general public is likely to be for their personal vehicles.
(complete article-It is one persons look at how much natural gas would be required to replace the gasoline we are using today.)
http://www.theoildrum.com/node/5615
Posted by Robert Rapier on July 30, 2009 - 10:06am
Topic: Alternative energy
Tags: gasoline, natural gas [list all tags]
You may have seen the recent news that a report by the Potential Gas Committee says natural gas reserves in 2008 rose to 2,074 trillion cubic feet. The New York Times and the Wall Street Journal (via Rigzone) both had stories on it, and T. Boone Pickens issued a press release. In this post, I will look at how long these reserves might last, if used to replace US gasoline usage.
How Much Do We Need?
The U.S. currently consumes 390 million gallons of gasoline per day. (Source: EIA). A gallon of gasoline contains about 115,000 BTUs. (Source: EPA). The energy content of this much gasoline is equivalent to 45 trillion BTUs per day. The energy content of natural gas is about 1,000 BTUs per standard cubic foot (scf). Therefore, to replace all gasoline consumption would require 45 billion scf per day, or 16.4 trillion scf per year. Current U.S. natural gas consumption is 23 trillion scf per year (Source: EIA). Therefore, replacing all gasoline consumption with natural gas would require a total usage of 39.4 trillion scf per year, an increase in natural gas consumption of 71% over present usage.
Assuming for the sake of argument that the 2,074 trillion standard cubic feet cited in the study is accurate, that the "probable, possible and speculative reserves" eventually equate to actual reserves, and that the gas is economically recoverable, that is enough gas for 53 years of combined current natural gas consumption and gasoline consumption. If you assume that only the proven plus probable reserves are eventually recovered, the amount drops to about 1/3rd of the 2,074 trillion scf estimate, still enough to satisfy current natural gas consumption and replace all gasoline consumption for almost 20 years.
We can also calculate in terms of oil imports. Right now the U.S. imports about 13 million barrels per day of all petroleum products. A barrel of oil contains around 5.8 million BTUs, but oil only makes up 10 million of the 13 million barrel per day figure. Other imports include things like gasoline (4.8 million BTUs/bbl) and ethanol (3.2 million BTUs/bbl). Scanning the list of imports, I probably won't be too far off the mark to presume that the average BTU value of those 13 million bpd of imports is about 5.4 million BTUs/bbl. On an annual basis, this equates to 25.6 trillion scf of natural gas, which would be an increase over current natural gas usage of 111%. Going back to the 2,074 trillion scf from the study, this would be enough to displace imports of all petroleum products (again, at current usage rates and not factoring in declining U.S. oil production) for 43 years.
What's the Cost?
Natural gas is presently trading at about $4 per million (MM) BTU (although December 2009 is trading at almost $6). Oil is presently trading at $71/bbl, which equates to $12.24/MMBTU. Gasoline is presently trading at over $17/MMBTU. Thus, natural gas is a bargain relative to oil or gasoline. Incidentally, I just checked on seasoned wood and wood pellets, and they range from $8-$12/MMBTUs. So it is cheaper to heat your house with gas than with wood. I am not sure I would have guessed that.
While natural gas is a bargain relative to gasoline, converting a gasoline-powered vehicle to natural gas isn't cheap. According to this source, it can cost $12,500 to $22,500 to convert a gasoline-powered car to natural gas. Honda makes a compressed natural gas (CNG) vehicle, but according to this review in Car and Driver the premium over the gasoline version is $8,780. A person would need to drive an awful lot to justify that premium. However, that's what fleets do. They drive a lot. The large price differential explains why fleets would be interested in running their vehicles on natural gas.
Conclusions
So, the good news is that the United States could be energy independent if the newly released natural gas reserve numbers are remotely accurate. It also appears that we have enough natural gas available that civilization isn't going to end any time soon due to lack of energy supplies. There are three caveats. First, energy independence via natural gas could require us to spend significantly more for personal automotive transportation. Second, "possible" reserves may never materialize. Finally, a large chunk of the calculated reserves are based on shale gas, and that requires gas to be in the $6-$8/million BTU range to be economical. Still, it is a bargain compared to gasoline, and it explains why fleets are more receptive to conversion to natural gas than the general public is likely to be for their personal vehicles.
(complete article-It is one persons look at how much natural gas would be required to replace the gasoline we are using today.)
http://www.theoildrum.com/node/5615
Tags: CNG, gas, gasoline, natural, transportation
Views: 87
Replies to This Discussion
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Permalink Reply by LP on -
Fascinating and enlightening article !
Ah...but then there is the Perry Mason moment and I do hope everyone on the GHS reads the entire article and the letter.
The Perry Mason moment:
These fees are, needless to say, ridiculous and are only there to ensure that many don't get done (thanks to the gasoline lobby).
Those licensing fees are mind boggling !
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Permalink Reply by sesport on
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Thanks, jffree. Like LP, I was unaware how those fees could multiply so easily. Sounds kind of daunting for the small business, maybe not so daunting for the in-house name brand auto dealers' shops. And like LP, i wondered who would benefit if the small independents were squeezed out by the fees.
Would be nice if there could be a program like "cash for conversion" like there is "cash for clunkers" that's equally as generous.
Now, I'm curious as to what percentage of the overseas small cars are ng vehicles. Well, whatever I find, it will definitely be higher than the number in the US, I'd bet.
thanks again - :0)
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Permalink Reply by LP on
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CASH FOR CONVERSION !
Now that's a GREAT idea !
What really needs to be done is expose those enormous fees.
Dr Fleming...this would be a good project for you.
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Permalink Reply by jffree1 on
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Before you get your mind set about the fees, read through some of the posts to the article. There were some that disagreed about what the actual fee is per vehicle. I think some research on EPA might be good also...
I appreciate your posts but lets try to focus on the main intent of the article which was to discuss how much natural gas would be needed to entirely replace our gasoline comsumption at todays levels. I would like to know how many wells we would have to drill to make a dent in these numbers??
I think a number of the posters (to the article) got off of that topic also when the e-mail was added at the end which targeted the cost of conversion. It is easier to talk about a few thousand of something (dollars) than to try to think in a trillion of anything (like scf)... such a vast number.
Of course, without an increase in demand (validates the discussion of conversion costs) there is no need to discuss the replacement of gasoline as our primary fuel. I don't object to discussing conversion costs on "CNG Cars" so I might reopen the discussion in that group.
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Permalink Reply by sesport on
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Sorry, jffree. I understood the intent of your topic, just got caught up thinking here's another roadblock to getting 'er done.
Personally, from the EIA information I've seen about ng consumption, I don't believe transportation takes the biggest bite out of what we produce. But, yes, wondering how many wells we would have to drill is an interesting rumination. lol
I'm thinking this could best be answered, perhaps, by taking a look at the foreign countries that are using ng to fuel vehicles. Find the data for the amount of ng used for transportation and apply it to our production maybe? I'm not sure how we should account for the increase in demand as the number of ng vehicles would increase.
Maybe a better way would be to find the total consumption over the life of one ng vehicle and figure how much well production that would require? But there again, one would have to take into account the different specs of various vehicle models (engine size, body weight, many variables).
Okay, this is going to take some thinking. Where are those car folks from back in the CNG group? And the ones that know about ng consumption? This is going to require a committee! lol
sorry again and thanks - :0)
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sesport, I don't think one can discuss using natural gas as a replacement for gasoline without getting off into the price of conversion discussion. They are joined at the hip. And I do believe that if natural gas were the only fuel option available it would soon become too expensive for the average consumer to use. The only hope I have is that the price of conversions will come down as more companies compete for the business.
Mr. Rapier did some pretty fancy calculations in his article. I would be interested in what some of our braniacs (who I am in awe of, mathematically speaking) think of his calculations and whether they can be presumed to be correct or not. Did he draw his conclusions on valid data or not? Did he miss anything that needs to be taken into account?
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Permalink Reply by LP on
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When those brainiacs do that calculating, be sure to take into account that an average production rate from a well is not the same in all shale plays. Although all of these plays below are profitable, the difference in the production in the Haynesville is significantly more than the others listed.
This is from the Chesapeake Operational report published Thursday.
http://www.businesswire.com/portal/site/google/?ndmViewId=news_view...
Notable wells completed by Chesapeake during the 2009 second quarter in the:
Haynesville
CLD 23 H-1 in Caddo Parish, LA
peak rate of 29.1 mmcfe per day
30-day average rate of 15.3 mmcfe per day
Frith 29 H-1 in De Soto Parish, LA
peak rate of 23.7 mmcfe per day
30-day average rate of 14.2 mmcfe per day
Chesapeake Royalty LLC 30 H-1 in De Soto Parish, LA
peak rate of 22.6 mmcfe per day
30-day average rate of 15.2 mmcfe per day
--------------------------------------------------------------------------------
Marcellus
Vargson 1H in Bradford County, PA
peak rate of 7.0 mmcfe per day
30-day average rate of 4.6 mmcfe per day
Evanchick 2H in Bradford County, PA
peak rate of 6.9 mmcfe per day
30-day average rate of 5.3 mmcfe per day
James Messenger 3H in Wetzel County, WV
peak rate of 5.1 mmcfe per day
30-day average rate of 3.4 mmcfe per day
--------------------------------------------------------------------------------
Barnett
Armet Dale Street 7H in Tarrant County, TX
peak rate of 7.8 mmcfe per day
30-day average rate of 4.4 mmcfe per day
Chevy 2H in Johnson County, TX
peak rate of 7.4 mmcfe per day
30-day average rate of 5.8 mmcfe per day
Gann 4H in Johnson County, TX
peak rate of 7.0 mmcfe per day
30-day average rate of 5.4 mmcfe per day
--------------------------------------------------------------------------------
Fayetteville
Maxwell 8-8 4-34H in White County, AR
peak rate of 5.0 mmcfe per day
Terry Bomar 8-9 3-17H in White County, AR
peak rate of 3.5 mmcfe per day
30-day average rate of 2.8 mmcfe per day
Don Shipp 9-15 1-11H in Conway County, AR
peak rate of 4.1 mmcfe per day
30-day average rate of 2.4 mmcfe per day
--------------------------------------------------------------------------------
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Permalink Reply by JD on
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LP - There is something missing from Chesapeake's operational report. What was the choke on the 3 Haynesville wells? I think they turn the choke wide open when they want to show impressive results like these and turn it way down when they don't. I am convienced that they want to report lower peak rates in southern areas where they are still trying to obtain leases on the cheap.
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Permalink Reply by P.G. on
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The problem we have is too much dependence on only one type of fuel. If usage were spread out over several types, we'd have reasonably priced energy for many years. If autos were a mix of electric, petroleum, Natural gas, etc., it would make it hard for the investors to corner the markets and prices would be similar to each other rather than like it is now. A real supply and demand market! Right now gasoline costs about 4 times as much as natural gas. What would the prices for consumers look like if the two were averaged together?
Ultra expensive energy is an economy killer.
If all vehicles were using only NG, we probably couldn't afford it unless we had our own well in the back yard!
What's needed is some price stability rather than this "Feast" or "Famine" situation that seems to be rule rather than the exception.
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Permalink Reply by sesport on
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lol It just occured to me, people must have had similar questions "back in the day" when transportation shifted from horse & buggy to horseless carriage. How much petroleum would need to be produced to make gasoline to replace hay & grain fed horses & mules? (That may be comparing apples to oranges, though.)
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Permalink Reply by Parkdota on
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At one point back in the day there was so much oil in America that I don't think anyone thought about running out. One could literally drill by themselves and hit oil in some regions. In some areas oil actually came out of the ground by itself. When they were drilling shallow wells they were even burning off gases if you can believe that. The abundance of oil was one thing that made America strong during WWI & WWII, and now look at us....having to "play nice" with other countries bc of our need for oil. The shift in less than 100 years is amazing. I believe the future of our nation will depend on many types of fuel (energy) both oil, natgas, water, wind, ethanol, solar, battery (electric), new exploration technologies, more exploration on our own lands, etc. To get to that point, though, we'll use a steady decline of oil usage together with an increase in natgas usage along with other items as mentioned.
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