What Is Natural Gasoline Identical?
Natural gas an equivalent (NGE) refers to the amount of natural gas needed to similar the facility constituted of one barrel of crude oil, as measured in British thermal gadgets (BTUs). The natural gas an equivalent for a barrel of crude oil is calculated to allow for a comparison between natural gas and crude oil prices.
Natural gas an equivalent is used basically right through the oil and gas business. In the world of finance, however, it is additional not unusual instead to speak in terms of barrel of oil an equivalent (BOE).
Key Takeaways
- Natural gas an equivalent is a way of standardizing the facility stored in a barrel of crude oil and other energy belongings into gadgets of natural gas.
- One barrel of crude oil maximum incessantly has more or less the an identical energy content material subject material as 6,000 cubic feet of natural gas, so this quantity of natural gas is “an equivalent” to one barrel of oil.
- Natural gas an equivalent is used by energy market patrons along with right through the oil & gas business, even if barrel of oil an equivalent (BOE) is additional prevalent.
Understanding Natural Gasoline Identical
Throughout the oil and gas business, barrel of oil an equivalent and natural gas an equivalent are essentially the an identical issue—the volume of natural gas it takes to give you the an identical British thermal gadgets as a barrel of oil, and vice-versa. In any case, barrel of oil an equivalent will also be calculated and performed to other energy sources as neatly.
Many oil companies produce every oil and gas, among other petroleum products, alternatively the unit of measure for each and every is different. Oil is measured in barrels and natural gas is measured in cubic feet. To help facilitate like-for-like comparisons, the business standardized natural gas production into “an equivalent barrels” of oil or “an equivalent gadgets of gas.”
One barrel of oil is maximum incessantly deemed to have the same amount of energy content material subject material as 6,000 cubic feet of natural gas. So this quantity of natural gas is “an equivalent” to one barrel of oil.
Calculating Natural Gasoline Identical
The calculation for the natural gas an equivalent of a barrel of oil is fairly simple. As every oil and gas will also be measured in Btu, the first step is to turn into a barrel of oil. There are standard conversions for every a barrel of oil and 100 cubic feet of natural gas. An ordinary barrel of oil is 42 gallons of crude and equals 5.8 million Btu, while 100 cubic feet of natural gas is to be had in at 103,700 Btu.
To eliminate the discrepancy in energy, natural gas is measured in 1,000s cubit feet gadgets (Mcf) with an energy of 1.037 million Btu. So there is nearly six events the facility in a barrel of oil than there is in 1000 cubic feet of natural gas. By means of customized and for the sake of fresh, round numbers, the natural gas an equivalent of a barrel of oil simply rounds out to 6,000 cubic feet or 6 Mcf.
How Natural Gasoline Identical Is Used
Natural gas an equivalent is in reality meant to help patrons slightly than confuse them. By means of standardizing energy into equivalents of a barrel of oil, energy companies make comparisons of producing, showed reserves, conceivable reserves and so on much more simple for patrons and business analysts.
In any case, in relation to energy, there is nevertheless some converting required to get a world symbol, as some regional reporting across the world only provides metric gadgets. Mcf is the standard approach for reporting natural gas inside of the us, alternatively billions of cubic feet (Bcf) can be utilized. In Europe, natural gas is reported by means of the metric ton.
And, in truth, natural gas an equivalent can be used in a additional non-public solution to measure the variation between housing heating strategies (heating oil vs natural gas as an example) based totally to be had available on the market prices for their gas.
