A Btu (British Thermal Unit) is the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit.
Table 1 shows the Btu value for various energies. To compare the values on a propane equivalent we first convert the values to a MMBtu (1 million Btu’s). You take the energy’s price and divide it by its MMBtu’s. Natural gas is priced on a MMBtu basis. We then multiply the amount of propane Btu content per MMBtu (.0915) to get the propane equivalent value. It’s a simple calculation but reveals the true energy value of the commodities from a propane perspective.
In tables 2 and 3 you can see how this calculates for crude oil and natural gas. There are 138,095 Btu’s in a gallon of crude. There are 91,500 Btu’s in a gallon propane. So to compare crude to propane, propane should be 66.26% of the crude value.
Correspondingly, when we compare propane to natural gas, propane should be 9.15% of the value of natural gas for the same energy value.
| Commodity | Btu | MMBTU | Price Example | Price per MMBtu | Propane Equiv $/Gal |
|---|---|---|---|---|---|
| Propane ($/gal) | 91,500 | 0.091500 | $0.52000 | 5.683060 | 0.520000 |
| Natural Gas ($/MMBtu) | 1,000,000 | 1.000000 | $5.00000 | 5.000000 | 0.457500 |
| Electricity ($/kwh) | 3,414 | 0.003414 | $0.05080 | 12.879906 | 1.361511 |
| Crude ($/bbl) | 5,800,000 | 5.800000 | $30.0000 | 5.172414 | 0.473276 |
| Fuel Oil ($/gal) | 138,690 | 0.138690 | $0.84000 | 6.056652 | 0.554184 |
| Gasoline ($/gal) | 125,000 | 0.125000 | $0.95000 | 7.600000 | 0.695400 |
| Crude Oil | BTUs | Prices |
|---|---|---|
| CrudeBtus per Barrel | 5,800,000 | $30.00 |
| CrudeBtus per Gallon | 138,095 | $0.7143 |
| Propane Btus per Gallon | 91,500 | 66.26% |
| Propane Btu’s as a % of Crude | 66.26% | $0.4733 |
| Natural Gas | BTUs | Prices |
|---|---|---|
| Natural Gas | 1,000,000 | $5.000 |
| Propane Btu’s per Gallon | 91,500 | 9.15% |
| Propane as a % of Natural Gas | 9.15% | $0.4575 |