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Technical Tips & Information
Energy Costs and Cross Over values
As of mid September 2005, here is a random sample of prices on common energy costs with comments from some of our contacts with customers.Natural Gas is running in the $13.00-14.00 range per million BTUs. Some plants are being warned of curtailment problems both now and in the future.
Number 2 oil when available is in the $2.50-3.00 range with tight supplies. Competition with home heating oil for the winter and increased diesel demand point to supply and price issues over the coming months.
Electricity thus far has been the least affected with rates in the $.055-.075 range per KW. As transportation costs rise for coal, you can expect electricity rates to possibly increase.
Propane when available is in the $1.30-$1.40 range per gallon and will tend to follow natural gas prices.
What the coming year holds is up to conjecture. I think it is safe to say that prices may drop a bit at best so plan accordingly.
The best way to deal with energy data is to compare costs per million BTUs (MBTU). All of the following are equal to 1 MBTU-
1 MCF of natural gas
1,000 cubic feet of natural gas
1 decatherm of natural gas
10 therms of natural gas
293.1 KW of electricity
7.29 gallons of # 2 oil
10.93 gallons of propane
1,000 lbs of steam
29.31 boiler horsepower
As an example, if natural gas costs $13.00 per MBTU, then the cross rates for number 2 oil are $1.78 per gallon ($13.00/7.29 gallons). For propane, the cross over would be $1.19 per gallon ($13.00/10.93 gallons). For electricity, the cross over would be $.044 per KW ($13.00/293.1 KW).
Aside from possible supply problems, becoming a fuel shopper and switcher may become very important. We can provide number 2 oil tanks with all the related equipment as well as propane facilities. Each has its pros and cons from a technical, safety, regulation, and cost point of view which should be carefully considered.
Unless we are totally wrong, early 2005 energy prices might well be remembered as the good old days.