• Replacing 1 million bbls per day of crude oil with the 6 billion cubic feet (bcf) equivalent of natural gas would generate approximately $25.6 billion of consumer surplus for the US economy over one year.

  So concludes a group of energy analysts calling themselves the Yale Graduates in Energy Study Group in a recent paper.

  This is how they got there (don’t worry, it’s pretty basic arithmetic):
  Gas wellhead price of $5/mcf, multiplied by 6 to get a per bbl of oil equivalent (“boe”) of $30 of cost, the savings is $70/bbl ($100/bbl – $30/boe).
  Current US consumption of crude oil is approximately 15.0 million bbls per day.
  If you replace 1 million bbls per day of crude oil with the 6 billion cubic feet equivalent of natural gas annually ($70/bbl X 1 million bbls X 365 days), you get $25.6 billion.

  This isn’t necessarily the best news for producers. But for consumers, it doesn’t get much better.?

This article was first published

Business Insider.

Article source: http://www.cngnow.com/News/Post.aspx?ID=674