Btu Valuations

What is a Btu?

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.

Table 1: Btu Valuations

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

Table 2: Crude Oil

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

Table 3: Natural Gas

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