The Physics
Factbook
An encyclopedia of scientific essays

Price of Natural Gas

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May 2005 Key Span Energy Delivery Bill. "In 59 Days, you used 114 Therms
Total Current Charges: $192.31"
$16 per billion joules
FCIC-Residential Natural Gas Prices. General Services Administration (GSA), 2004 Average Midwest Household Heating with Natural Gas (Heating source October-March)
Volumes consumed2001-20022002-20032003-20042004-2005
(Therms)837.4979.5910.5990.9
(Mcf)81.395.188.496.2
Residential price2001-20022002-20032003-20042004-2005
($/therm)$0.72$0.82$0.95$1.02
($/Mcf)$7.41$8.40$9.77$10.50
$6.8 to 9.7 per billion joules
Chambers, Ann. Natural Gas & Electric Power in Nontechnical Language. Penwell Books, 1999: 13. "The wellhead price of natural gas increased only slightly in the decade from 1987 to 1996. In 1987, gas cost $2.21 per thousand cubic feet and in 1996, it cost $2.24 per thousand cubic feet. According to the American Gas Association (AGA), transmission and distribution costs for gas dropped from $2.20 to $1.40 per thousand cubic feet. Retail natural gas prices for all sectors fell 18% between 1987 and 1996." $2.05 per billion Joules
Adelman, M.A. The Supply and Price of Natural Gas. 1962: 37. Average Initial base price, new contracts
Texas-Louisiana cents/mcf
YearBLS wholesale price indexImplicit price index GNPCurrent ValueReal Price I Real Price II
195695.994.519.4115.0215.24
195798.797.716.9417.1617.39
1958100.0100.015.6615.6615.66
$0.55 per billion Joules
Bloomberg.com: Energy Prices. Bloomberg L, 2006. Natural Gas (MMBtu)
 PriceChange % ChangeTime
Nymex Henry Hub Future5.95-.01-.2007:20
Henry Hub Spot5.76.00.005/10
New York City Gate Spot6.23.00.005/19
$5.49 per billion Joules

Natural gas is a vital element of the world's energy supply. It is said to be one of the cleanest, safest, and most useful energy sources. Natural gas is combustible and contains a lot of energy per mass once it is burned. When natural gas burns, it emits smaller quantities of harmful substances into the air than oil. When you break down natural gas into its components, you will see that it is mainly composed of methane, but it also consists of various other gases such as ethane, propane, butane, carbon dioxide, oxygen, and nitrogen.

It has been said that fossil fuels are created when organic matter is placed under extreme pressure within the earth. As time passes, sediment, mud, and debris get piled upon the organic matter, which leads to an increase in pressure. Natural gas deposits are usually found approximately one to two miles into the earth's crust.

Natural gas has a generally low density compared to oxygen or nitrogen. Once it is formed, it will rise up towards the earth's surface in the pores of shale type rocks. The methane will rise up to the surface and be trapped in geological formations such as layers of sedimentary rocks. It can then be extracted through drilling holes in the solid rock. The gas usually from its own pressure.

In the sources that I have found, I converted Mcf to therms to Btu to joules and MMBtu to Btu to joules. One Mcf stands for one thousand cubic feet. Btu stands for British thermal unit. One Mcf is equivalent to 1,027,000 Btu. A therm is a unit of heat that is equivalent to 100,000 Btu. MMBtu is equivalent to a thousand thousand Btu which is equivalent to one million Btu. Therefore, to convert Mcf to Btu, you first convert it to therms and you find that one Mcf is 10.27 therms, therefore you multiply 100,000 Btu by 10.27 therms to get the total value for the Btu which is 1,027,000 Btu. To figure out the number of joules, you multiply the total Btu by 1,055.05585 because. Therefore, one Mcf is equivalent to 1.08 billion Joules. Since one MMBtu is equivalent to 1 million Btu, we multiply that by 1,055.05585 to get the total joules. Therefore MMBtu is equivalent to 1.05 billion Joules.

The price of natural gas often fluctuates because it is part of a competitive market. The price is based on the supply and demand of the gas at the present time.

Michelle Sze -- 2006