As a gas, most people have difficulty perceiving how much fuel they are buying as they have been accustomed to buying by the litre or gallon. To make it easier for people to understand, the gas industry has devised an gasoline volume equivalent: Gasoline Gallon Equivalent (GGE - USA) and the Gasoline Litre Equivalent (GLE - Canada).
- How is natural gas sold? In a retail service station, natural gas is sold by mass in kilograms. With on-site fuelling, it is typically sold by volume in cubic metres or in units of energy called gigajoules. In terms of heating values,
- 1 kilogram of natural gas is equivalent to 1.52 litres of gasoline
- 1 cubic metre of natural gas is equivalent to 1.09 litres of gasoline
- 1 gigajoule of natural gas is equivalent to 28.85 litres of gasoline
Fuel Costs - An Energy Value Comparison As the adage goes, it is appropriate to compare apples to apples when evaluating fuel costs. As we have seen, liquid fuels are measured and sold by volume (gallons), not energy content. Natural gas is measured by volume or weight (standard cubic feet or pounds), but is sold by energy content (therms).
To begin making an economic comparison of fuels, it is easiest to compare the prices based on energy content - after all, energy is what you are purchasing, not volume or weight. This method of comparing fuels yields a gasoline or diesel gallon equivalent price for CNG, sometimes abbreviated as GGE or DGE. Let's look at a gasoline/CNG comparison, using retail prices: Gasoline in California is now standardized at 110,400 Btu/gallon, regardless of refiner or location. In March 1998, the retail price of gasoline averaged $1.07 per gallon in California, according to the California Energy Commission. PG&E sells CNG at its fueling stations for $0.78104 per Therm (plus a monthly customer charge of $13.42 per account - no vehicle limit). A THERM of CNG has an energy value of 100,000 BTUs. For comparison, how much does CNG cost for the equivalent amount of gasoline? The mathematical conversion is:
- Take the price of CNG, multiply it by the Energy value of liquid fuel, then divide by the Energy value of CNG.
- For this example, $0.78104 per Therm is the price of CNG, 110,400 BTU is the energy value of liquid fuel, and 100,000 BTU per therm of CNG is the Energy value of CNG.
The cost of CNG for the equivalent amount of gasoline is $0.86 per gallon. Therefore, based on our assumptions, compressed natural gas is retailing at $0.21 less than gasoline, on an gallon equivalent basis. If your assumptions stay the same regarding the energy content of the fuels you are comparing, you can simply use a conversion factor to compare price. Using the assumptions above: Cost per Therm CNG x 1.10 = cost for gasoline gallon equivalent. For diesel fuel, assuming a diesel energy value of 125,000 BTU per gallon, the conversion factor in the equation would be 1.25.
Standard Conversion Factor Adopted Nationwide.
Because CNG fueling dispensers measure the weight of the natural gas, which is then converted to an energy value based on a measurement of the composition of the gas, it is not possible to display an energy value-based liquid fuel gallon equivalent on the dispenser. However, dispensers often show a gallon gasoline equivalent display, using the national conversion factor. The national standard conversion factor of 1.276 is an approximation based on the average energy value of a gallon of gasoline and the average energy value of 5.66 pounds of natural gas.
Using the nationally accepted conversion factor, PG&E retails compressed natural gas for $0.996 per gasoline gallon equivalent. Note that because gasoline in California has a lower energy value than the national average, and natural gas in California has a higher energy value than the national average, the standard conversion factor overstates the cost of a gallon gasoline equivalent by about 16 percent.
In California, 1 gallon gasoline = 5.66 lb NG / 1.16 = 4.88 lb NG according to PG&E.