How cost effective is liquid propane gas?

Answer 1

The cost effectiveness of any fuel when compared to another fuel STRONGLY depends on the locale in which propane and the comparison fuels are priced, and the terms of the pricing (for propane: residential or commercial). Residential prices for propane can be almost double from those available to wholesale buyers.

A summary of the cost effectiveness of the residential use of propane based on prices in the United States as of May 2012 is shown in the analysis below:

1. Propane (LPG) @ $2.87/gallon (residential price), with a liquid density of 4.1 lb/gallon and a HHV of 21,654 Btu/lb results in a $32.60/MMBtu price.
2. Natural gas in the United States is about $2.50/MMBtu (prices are near 10 year lows).
3. Gasoline (RBOB) with 15% ethanol (standard in the U.S.) @ $3.61 per gallon, with a density of 6.1 lb/gallon and a HHV of 18,920 Btu/lb yields a price of $31.32/MMBtu.
4. Diesel @ $4.02/gallon, with a density of 7.0 lb/gallon and a HHV of 19,300 Btu/lb yields a price of $29.71/MMBtu

In general a few things can be gleaned from the above analysis:

1. LPG is 13.04 times more expensive than natural gas.
2. Gasoline (RBOB) is 12.53 times more expensive than natural gas.
3. Diesel is 11.89 times more expensive than natural gas.

Therefore I would argue that at the given prices and assumptions, propane is the most expensive fuel of those commonly available to consumers.

There are a lot of assumptions in the above analysis, but enough information is provided to make a comparison using alternate numbers.

Referenced Terms:

HHV= High heating value (also known as gross heating value)

MMBtu= million British thermal units (1x10^6 Btu)

RBOB= reformulated gasoline blendstock for oxygen blending

lb= pound (2.204623 lb per kilogram)

gallon= US gallon (264.17 gallons per m3)