Gasoline is a liquid, natural gas is, ....... a gas. In order to understand the concept of GGE, you have to begin with the basic understanding that they both release energy when ignited.
A GGE is a volume of gas which when ignited releases the same energy as a gallon of gasoline does when it is ignited. When we purchase CNG, it is measured by GGE, or Gasoline Gallon Equivalent. When we pay our natural gas bill or when we reconcile our royalty paments, we think of natural gas in terms of thousand cubic feet. It takes about 1,000 cubic feet of natural gas to equal eight GGE's.
When we purchase 16 gge or 2,000 cubic feet of CNG at the pump for 1.60 per gge we pay $25.60. When a well produces 2,000 cubic feet of natural gas sold at $3 per thousand cubic feet we get our royalty percentage of $6.....talk about a mark up, where does $19.60 go?? We will explore the reasons for the costs in the future.
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