Price of Natural Gas

We are used to buying food by the kg, but how much does energy cost and how do different sources compare?


The price of natural gas in B.C. has fallen dramatically in recent years due to reserves being opened up by fracking. Thus natural gas, the cleanest (but by no means “clean”) fossil fuel, is being sold at cut rates as fast as we can pull it out of the ground, encouraging its profligate use. Thus, one can see that free markets, left to their own devices, are never going to solve the climate crisis.

Figuring out the cost of domestic natural gas is not as straightforward as looking at that for gasoline. Unlike gasoline, where all prices are rolled into the one we pay at the pump, natural gas prices involve a daily “basic charge” for the infrastructure to bring it to your building. This basic charge is the same summer and winter, regardless of how much gas is used, as shown in Figs. 1 and 2, the author’s gas bills for a house heated by natural gas. Then there is a rate in $/GJ.

Fig.1. Author’s gas bill, mid-Aug – mid-Sep 2019.

 

Fig.2. Author’s gas bill, mid-Mar – mid-Apr 2019.

Exercise: Put these numbers into a spreadsheet and determine the mean cost of natural gas for the author’s household, by averaging two values six months apart. You can also determine the BC carbon tax rate[1] B.C.’s Carbon Tax https://www2.gov.bc.ca/gov/content/environment/climate-change/planning-and-action/carbon-tax [2019-09-27]. and how it changed between these two bills, by assuming natural gas is methane, with an enthalpy of combustion of 55 MJ/kg.

Answers: Cost of natural gas delivered is about $\$12$/GJ, and this is the value we will use in other articles. Ten years ago when these articles were first being written, the cost was $\$15$/GJ, which is about $\$17.50$/GJ in 2019 dollars[2] Canadian Inflation Rate, https://www.in2013dollars.com/CAD-inflation-rate-in-2019 [2019-09-27].. In spring 2019, B.C.’s carbon tax rate changed from $\$35$/tonne to $\$40$/tonne CO2e.

Fuel C:H ratio Enthalpy MJ/kg kg(CO$_2$)/GJ
Methane CH$_4$ 55 50

Gas well, Fort St. John B.C. (author photo).

 

Created by CEW 2019-09-27

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