Oil Prices

[sgd]

I know it was report some years ago some of our plants modified to take in things like scrap wood and old tires.

read somewhere before when you burn a tire the heat energy produce is equivalent to a barrel of oil, old tires are like gold.

[specuvestor]

^^ If you don't care about the environment

AFAIK most powerplants basically need heat to turn turbine so it's a matter of how cost efficient they can do that. Theoretically they can modify and switch from one heat source to another but they better have a good estimate of the cost/benefit ie cost of generating a kW. But in a competitve environment you will have to match your competitors, so the whole sector correlates even though it is obvious that gas is different from coal.

Just curious. Do all power plants accept gas, coal and oil ? If the plant cannot work with oil, reduced oil price may not help ... and can be a real disadvantage to alternative that taps on oil to generate electricity.

[Boon]

Just curious. Do all power plants accept gas, coal and oil ? If the plant cannot work with oil, reduced oil price may not help ... and can be a real disadvantage to alternative that taps on oil to generate electricity.

There are oil-fired-power-plants besides gas and coal. In Singapore, the fuel mix for power plants could now be around 80% (gas) and oil (20%).

According to Opec:

"The transportation sector, covering road, air, internal waterways and international bunkers, is the main sector for oil use, responsible for 59% of all oil use in 2011 and is set to grow to 63% of all oil demand by 2040. The petrochemical industry and other industrial usage accounted for one-quarter of all oil used in 2011, while residential and agriculture, together with some consumption in the commercial sector, contributed to 10% of the consumption. Little oil is used to produce electricity, with only 6% of total oil use in this sector, although some OPEC countries use signicant amounts of oil to produce electricity."

[specuvestor]

^^ This % is actually a result of refinery output rather than by choice per se. If they can increase the % used for transport sector, they would as higher value.

[sgd]

I think more for survival options that they modified the power plants several years ago when oil prices were >$100

actually in some ways good for environment in other ways not, synthetic rubber tyres can take thousands of years to decompose on their own, end up in landfill it just takes up space due to bulk, if you burn to produce electricity there's pollution to deal with but you got to get rid of it someway somehow until somebody comes up with a better idea.

[HitandRun]

Most power plants running on natural gas (especially those constructed more recently) are of the combined cycle variety. Such power plants are much more efficient than plants using fuel oil. Therefore, unless natural gas becomes much more expensive than fuel oil, or when natural gas is unavailable, power plants would hate to switch fuel. As far as I know, I have not seen natural gas trade above crude oil (energy equivalent) on a sustained basis.

On the other hand, coal fired plants have to be converted before they can use natural gas as a fuel.

[CityFarmer]

Most power plants running on natural gas (especially those constructed more recently) are of the combined cycle variety. Such power plants are much more efficient than plants using fuel oil. Therefore, unless natural gas becomes much more expensive than fuel oil, or when natural gas is unavailable, power plants would hate to switch fuel. As far as I know, I have not seen natural gas trade above crude oil (energy equivalent) on a sustained basis.

On the other hand, coal fired plants have to be converted before they can use natural gas as a fuel.

Let me add-on with few numbers from my record. I lost the reference, but should be reliable.

A barrel of oil contains the same energy as 5.6 million BTUs of natural gas. Base on the latest spot price of natural gas, $3.78 per million BTUs, it means (5.6*$3.78) = $21.17, which is much lower than the current oil price of $60+ per barrel. May be the reason power plants use more natural gas than oil?

The trouble of natural gas is transportation, which may be lesser issue with technologies advances in near future.

http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm

(sharing few numbers to support the post presented)

[HitandRun]

A barrel of oil contains the same energy as 5.6 million BTUs of natural gas. Base on the latest spot price of natural gas, $3.78 per million BTUs, it means (5.6*$3.78) = $21.17, which is much lower than the current oil price of $60+ per barrel. May be the reason power plants use more natural gas than oil?

CityFarmer San

Your figures are only applicable in the US. For some parts of Europe and most of Asia, the natural gas pricing is based on crude oil (or its derivatives). E.g. EMA provides HSFO (High Sulphur Fuel Oil - the benchmark used in Singapore) prices on their web site.

[CityFarmer]

A barrel of oil contains the same energy as 5.6 million BTUs of natural gas. Base on the latest spot price of natural gas, $3.78 per million BTUs, it means (5.6*$3.78) = $21.17, which is much lower than the current oil price of $60+ per barrel. May be the reason power plants use more natural gas than oil?

CityFarmer San

Your figures are only applicable in the US. For some parts of Europe and most of Asia, the natural gas pricing is based on crude oil (or its derivatives). E.g. EMA provides HSFO (High Sulphur Fuel Oil - the benchmark used in Singapore) prices on their web site.

I am not oil/gas expert, but a keen follower trying to understand the market of LNG. I should remain humble in front of experts here

I shouldn't use US HH spot price, since the context is Singapore, my apologies.

[HitandRun]

I am not oil/gas expert, but a keen follower trying to understand the market of LNG. I should remain humble in front of experts here

CityFarmer San

Me only expert in talking cock......