The process of refining crude oil into gasoline and diesel is known as refining. The cost of refining varies depending on the standards of the finished product and the additives used to improve it. Summer gasoline, for example, has low evaporation rates, which are essential to reduce excessive air pollution. Additionally, gasoline is produced in a variety of power and performance levels known as octanes (i.e. 87, 89, and 93) the higher the octane, the higher the manufacturing cost. Detergents have been added to both gasoline and diesel to clean engines and improve performance. These additions also raise the price. Depending on whether summer or winter formulae are used, the cost of refining gasoline ranges from $.40 to $.70 per gallon. The cost of refining gasoline is $.60 per gallon in the case above. Diesel refinement costs $.49 per gallon.
What is the price at which natural gas producers break even?
After factoring in corporate costs, natural-gas-focused producers can break even at around $2.25 to $2.35 per MMbtu, according to Scott Hanold, equities analyst at RBC Capital Markets.
What is the cost of constructing a natural gas power plant?
The type of planned facility is one of the most important elements impacting building costs for power producing facilities. Depending on whether they are coal-fired power plants, natural gas-fired power plants, solar, wind, or nuclear generation facilities, construction prices can vary significantly. Construction costs between different types of production facilities are a crucial consideration for investors in power generation facilities when determining whether an investment will be profitable. In order to evaluate a suitable rate of return, investors must also consider other elements such as continuing maintenance expenses and future demand. The capital cost of bringing a plant online, however, is at the heart of any estimate. As a result, a quick rundown of actual building prices for various types of power plants is a good place to start before diving into additional factors that influence power plant construction costs.
When estimating power plant building costs, keep in mind that actual construction prices are influenced by a variety of factors. Access to resources that drive power production, for example, can have a significant impact on construction costs. Solar, wind, and geothermal resources are unevenly dispersed, and the cost of accessing and exploiting them will rise over time. Early market entrants will benefit from the most cost-effective resource access, whereas newer projects may have to pay much more for comparable resources. The regulatory environment in which the power plant is built can have a significant impact on the construction project’s lead time. This might result in greater interest accrual and overall construction costs for projects with a large initial investment in construction. Refer to the Capital Cost Estimates for Utility Scale Electricity Generating Plants published by the US Energy Information Administration (EIA) in 2016 for further information on the plethora of factors that can influence power plant building costs.
The cost of constructing a power plant is expressed in dollars per kilowatt. The EIA is the source of the data presented in this section. We’ll be using power plant construction costs for power producing facilities built in 2015, which can be found here. This is the most recent data available, however the EIA is anticipated to disclose 2016 power plant building costs in July 2018. The EIA’s publications are one of the most significant sources of information for people interested in power plant building costs. The EIA data is important in illustrating the complicated nature of power plant building costs, as well as the numerous variables that can affect not only power plant construction costs but also ongoing profitability.
Wind
In 2015, power plants that used wind as a renewable energy source added the most capacity to the system without significantly increasing fuel costs. In the United States, the use of wind as a source of electricity has gradually increased. Wind energy power plants added 8,064 megawatts (MW) of capacity in 2015. When compared to petroleum-based generation plants, which added 45 MW of capacity, the tremendous rise of wind-powered power plants is clear. The average cost of constructing a wind power facility was $1,661 per kilowatt of installed nameplate activity. For 66 generators, this resulted in a total construction cost of $13,395,684.
It’s vital to remember that wind turbine building is greatly influenced by the existing regulatory environment and generation prices. Consider that, according to this EIA study, wind-powered power plants installed less than 900 MW of capacity in 2013, compared to almost 8,000 MW in 2015. The most significant reason for this was the expiration of a federal production tax credit at the end of 2012, which urged investors to delay new wind power generator construction until the tax credit was renewed in early 2013, which they did. Given the gap in output, the additional capacity added in 2015 can be viewed as a resumed investment once a more favorable regulatory framework was in place.
Natural Gas
Natural gas-fired power facilities have been a major driver of grid expansion in recent years, and 2015 was no different. Natural gas power stations installed 6,549 megawatts of capacity in 2015. Construction expenditures for natural gas power plants in the same year averaged $812 per kilowatt hour, totaling $5,318,957 for 74 units. In natural gas power plants, there are three major types of technology used. Each technique has a significant impact on the overall construction expenses. Internal combustion engines accounted for only a minor portion of the capacity added, with mixed cycle natural gas power plants (4,755 MW) and combustion turbines (1,553) accounting for the rest of the capacity added (240). However, this does not give the whole story.
Combined cycle plants, which have at least one combustion turbine and one steam turbine, are significantly more efficient than other varieties. While this decreases long-term operational costs, it also raises construction capital costs. Combustion turbine natural gas power plants are less efficient than combined cycle power plants, resulting in higher operating costs but lower construction costs. Internal combustion engines and combustion turbine power generators both have the advantage of being built faster than combined cycle power plants. As a result, they’re now commonly used in instances where temporary capacity expansions are required to satisfy increased demand. Furthermore, despite the fact that combustion turbine plants are less efficient, they are only used to satisfy peak demand. Combined cycle plants, on the other hand, are more commonly employed to fulfill baseline demand loads due to their superior efficiency and lower operating costs.
Solar
The cost of building a solar power plant, like that of a natural gas plant, is greatly reliant on the underlying technology used in the facility. Furthermore, the capacity provided by solar power plants is determined by the technology used. As a result, the intersection between solar power plant construction costs and productive capacity is a key factor for investors to consider. For a total capacity increase of 3,192 MW, the average construction cost for all types of solar photovoltaic (PV) power plants was $2,921/kw. Solar PV plant construction expenses was $9,324,095 for 386 total generators. When compared to natural gas and wind, these figures show that solar plants produce less capacity gains per generator on average. Varying types of solar PV installations produce different amounts of energy.
The distinction between fixed-tilt and axis-based tracking systems is significant. Axis-based tracking systems are more expensive to install, but they have a larger production capacity than fixed tilt tracking systems, which could help offset ongoing operating expenses. Another thing to think about is the sort of solar PV system. Crystallized silicon and thin-film CdTe are the two most common varieties on the market. These many categories each have their own set of benefits and drawbacks. Thin-film technology is newer, and thin-film plants have a higher average capacity than crystalline silicon plants (74 MW versus 7 MW). Construction costs are comparable for both plant types. For example, crystalline silicone plants cost $2,920/kw on average for axis-based tracking installations, compared to $3,117/kw for thin-film plants. Fixed and axis-tilt crystalline silicon installations considerably outpaced thin-film installations in 2015, demonstrating a strong market preference for crystalline silicon solar power plants.
Nuclear
Despite the fact that few nuclear power plants have been built in recent years, nuclear power plants remain an important part of our energy infrastructure. In reality, the Watts Bar Unit 2 nuclear power station, which was finished in 2016, was the most current nuclear power facility to be completed. This project was completed after decades of delays, approximately 20 years after the previous nuclear power plant in the United States, the Watts Bar Unit 1, was completed in 1996. There are no entirely accurate or up-to-date nuclear power plant building costs available due to the paucity of new nuclear plant construction. According to an EIA economic projection provided in 2018, nuclear power plants started in 2016 would have a base overnight cost of $5,148, excluding any changes that may occur in the interim. One thing to keep in mind about the nuclear business and nuclear power facilities is that they take a long time to build. According to the EIA, if building began in 2016, a nuclear reactor and power plant might be operational by 2022. If building prices as a whole continue to climb at their current rate, nuclear power station construction will be more sensitive to cost overruns.
Where in the globe can you get the cheapest gas?
Everyone in the American transportation industry is feeling it as the price of diesel and regular gasoline continues to rise every week. But, in comparison to other countries, how inexpensive is our gas? You might be surprised to see how expensive driving is in certain nations and how inexpensive it is in others.
According to Global Petrol Costs, the top ten countries with the cheapest gas prices are:
Venezuela
Venezuela, despite being a poor country overall, is rich in oil deposits and fossil fuels, and exploits this riches to provide nearly free gasoline to its citizens. Yes, it’s strange to consider, isn’t it? However, this is correct. Technically, the price per gallon at Venezuelan pumps is $ 0.10, which means that filling up a rig would cost pennies. It appears to be a fleet owner’s dream.
Iran
Another oil-rich countrythere is certainly a pattern here. The countries with the biggest oil reserves, logically, pay the least. Iranians, who have their own vast oil reserves, charge $0.19 a gallon.
Syria
Syria has been engulfed in a bloody civil war for more than a decade. Despite this, and its impact on oil production, the country ranks fourth in the world with a $1.20 per gallon gasoline price.
Algeria
Algeria is ranked #5 in the world for cheap gas, despite paying more than ten times as much as its western neighbor, Libya. In Algeria, a gallon of gas costs $1.22.
The United States… #72
The average gas price in the United States is $4.46 a gallon. And, while Americans rank 72nd in terms of absolute prices, when you consider our country’s high income levels and wealth in relation to this price, the United States ranks fourth in the world for gasoline affordability (that is, one gallon of gas costs only a tiny fraction of our average daily income).
And, in case you weren’t aware, the most costly petrol rates are found in Europe, with Italy, the Netherlands, and Norway all charging more than $8.00 per gallon.
For fleet owners, rising fuel prices can be a challenge. So, why not look for more ways to be as cost-effective as possible?
Consider Did you know that, in addition to money, factoring businesses offer gasoline cards to trucking companies? Consider factoring for trucking invoices. Learn how collaborating with a factoring firm can help you save money on your fuel expenditures.
Is it more expensive to produce gasoline or diesel?
Diesel fuel, which is often used in commercial trucks, hasn’t always been more expensive than regular gasoline for passenger cars.
Diesel fuel, at least on paper, is a less refined petroleum distillate than gasoline, therefore it should always be less expensive to create.
The issue with diesel fuel pricing has less to do with the real cost of manufacturing and more to do with the principles of supply and demand for various petroleum products.
How much money can a natural gas well bring in?
Medlock’s team conducted significant study into breakeven prices for U.S. shale gas plays, a hot topic and source of debate among analysts and industry participants in recent years. Everyone wants to know what Henry Hub benchmark gas price an unconventional well needs to break even and become profitable. “It depends,” is the less-than-satisfying but most true response.
“Some wells are profitable at $2.65 per thousand cubic feet, while others require $8.10… the median is $4.85,” according to Medlock.
The existence of natural gas liquids, which command higher prices than dry natural gas, is one key element, although well economics are also influenced by infrastructure, lease costs, local fiscal situations, and other factors.
How much does a barrel of oil cost Saudi Arabia to produce?
Because OPEC members are the lowest-cost oil producers, unrestricted production by cartel members would significantly lower Russian and American market share.
A business with market power can maximize its profit by limiting output, according to every microeconomics textbook. Such quantity constraints may cause production to be moved to other companies in some situations. If such firms are relatively high-cost producers, this production misallocation benefits the market-powering firm, but it implies society must pay more than it would otherwise to achieve a given output.
The researchers estimate the costs of output misallocation using data from Rystad Energy. These figures comprise estimates of oil output and costs for 13,248 oil fields that were operational between 1970 and 2014.
The cost of producing oil varies depending on the geologic formation. In 2014, these expenses ranged from $7 per barrel in Saudi Arabia’s Ghawar field to $21 per barrel in Norway’s offshore fields to $51 per barrel in the Bakken shale in the United States.
OPEC members have far lower production costs than other producers. Throughout the study period, production costs per barrel in Saudi Arabia and Kuwait rarely exceeded $10 per barrel, with median costs of $5.40 per barrel. The cost of production in the 95th percentile was around $10 per barrel. Outside of the OPEC cartel, however, the median cost was closer to $9.70 per barrel, with the 95th percentile being $28.20 per barrel. As a result, if OPEC withholds production, say by limiting output from its most expensive fields, production will rise in the rest of the world’s more expensive areas, resulting in misallocation of production. The cost increase will be substantially greater if OPEC withholds output from its cheaper fields, like as those in Saudi Arabia.
The oil business in the United States has been shaped in great part by the shift away from inexpensive OPEC reserves and toward the rest of the world. In 2005, shale generated only 24 million barrels of oil out of a total of 2480 million barrels produced in the United States, or less than 1%. Shale accounted for 2039 million of the 4173 million barrels of oil produced in 2014, or about half. The key driver of an increase in the average cost per barrel of US oil from $7.30 in 2002 to $20 in 2014 was the expansion of higher-priced shale oil extraction. According to the researchers, this increase in shale oil output would not have happened if OPEC members had not imposed supply restrictions.
The researchers compare the cost of actual production each year with the cost of producing the same amount of oil using the lowest-cost fields, as would occur in a competitive market, to determine the influence of OPEC’s market power. They indicate that if production were distributed among countries to reduce costs, the market share of the Gulf nations with lower production costs would have climbed from 25.8% to 74.4 percent in 2014. In comparison to current output percentages of 13.3 and 3.0 percent, Saudi Arabia’s portion would rise to 28.1 percent and Kuwait’s share would rise to 12.5 percent. Non-OPEC, higher-cost producers’ output would have decreased, with the United States’ market share dropping from 13.2 to 1.3 percent and Russia’s from 14.4 to 4.7 percent.
What is the price of a gas turbine?
“A reduced cost of electricity to feed an expanding world is the driving requirement here,” DeLeonardo stated. Over the next ten years, the business anticipates that $5 trillion will be invested on new power plants around the world. And the owner normally loses money whenever those capital-intensive plants are offline for repair or service. As a result, “There’s a lot of emphasis on reliability,” DeLeonardo remarked.
Modern gas-fired turbines are also becoming more robust, with longer intervals between scheduled maintenance becoming more common as technology develops. Citeno compared it to running a car for 1.2 million kilometers without servicing. He said that GE’s latest F class turbines can run for 24,000 hours before requiring combustion system inspections. The H class’s goal is to accumulate 25,000 hours.
According to DeLeonardo, GE’s new turbines cost between $500 and $700 per kilowatt to install, whereas renewables cost roughly $1,500 per kilowatt and nuclear can cost $5,000 per kilowatt. Indeed, according to the DOE’s Lawrence Berkley National Lab’s 2013 Wind Technologies Market Report, the capacity-weighted average installed project cost in 2013 was $1,630/kilowatt.
The fuel is, of course, free once wind turbines or solar panels are built and connected to the grid. The cost of fuel for gas-fired power generation ranges from two-thirds to eighty percent of the total cost of electricity generation.
What does it cost to operate a gas-fired power plant?
In 2017, the fixed expenses of an advanced nuclear power facility amounted about. In comparison, a traditional gas/oil combined cycle plant has fixed costs of 11.11 dollars per kilowatt per year and variable costs of 3.54 dollars per megawatt hour.