1.Electricity Generation

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1.1. Natural Gas

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In 2019, about 4.188 tr kWh of electricity were generated at utility-scale facilities in the US.  About 62.7% of the electric power was produced by burning fossil fuels, mainly natural gas and coal, about 19.7% was from nuclear energy, and about 17.5% from renewable energy sources. Natural gas and coal accounted for 1.582 tr kWh (38.4%) and 0.966 tr kWh (23.5%) of power production.

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In 2019, the consumption of natural gas for electricity production was 11.307 bn thousand cubic feet, and he  price of one thousand cubic feet of natural gas for electricity production was $2.98. Accordingly, the cost of natural gas for electricity production was [11.307*$2.98], i.e., $33.7 bn. 

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1.2. Coal 

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In 2019, 0.539 bn short tons of coal was used for electricity production; 

the average cost of coal for electricity generation was $38.86 per short ton. Accordingly, the cost of coal used for electricity production was [0.539*$38.86], i.e. $20.95 bn*. 

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*(petroleum and other fuels were also used for electricity production in 2019, but they accounted for less than 2% of electricity generation from fossil fuels and were not taken into account.)

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In 2019, the coal for electricity heat content was [9,536*2,000**], i.e., 19.07 m Btu per short ton, and that of natural gas was 1.033 m Btu per thousand cubic feet.  When a coal-fired power plant is converted into a natural gas-fired power plant, the thermal efficiency of authentic boilers declines by around 4%. Accordingly, if in 2019 all coal-fired power plants were converted to natural gas-fired power plants, the cost of natural gas would have been [(0.539*19.07/1.033)*$2.98/0.96], i.e., around $30.9 bn.  

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**(one short ton equals 2,000 pounds)

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If in 2019, all coal-fired plants were converted to natural gas-fired plants enhanced with AG-Cycle, the cost of fuel would have decreased by [1-30.9*(1-0.6)/20.95], i.e. 41%.

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If in 2019, all coal-fired plants were converted to natural gas-fired plants enhanced with AG-Cycle, and all natural gas power plants were also enhanced with AG-Cycle, the demand for natural gas in the power production sector would have decreased by [1-((33.7+30.9)*(1-0.6))/33.7], i.e., 23.3%.  

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2. Heating   

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2.1. Residential Natural Gas

 

The average annual consumption of residential natural gas from 2015 to 2019 was 4.67 bn** thousand cubic feet. The annual price of one thousand cubic feet of residential natural gas in 2019 was $10.6. Accordingly, the estimated cost of residential natural gas was [4.67*$10.6], i.e., $49.5bn. 

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2.2. Commercial Natural Gas

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From 2015 to 2019, the average annual consumption of commercial natural gas was 3.36 bn*** thousand cubic feet. In 2019, the average annual price of one thousand cubic feet of commercial natural gas was $7.64. Accordingly, if in 2019, the annual commercial natural gas consumption and price were the same as the aforementioned annual average consumption and price, the cost of commercial natural gas would have been [3.36*$7.64], i.e., $25.67 bn. 

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***(since the overall consumption of natural gas for heating depends on seasonal temperature, its consumption varies. For that reason, the 2015  - 2019 annual average consumption was used for the estimate.)

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2.3. Industrial Natural Gas 

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In 2019, the annual consumption of "delivered to consumers" industrial natural gas was 8.39 bn thousand cubic feet; natural gas consumption associated with its production and distribution, termed as "Lease and plant fuel" and "Pipeline and distribution use" natural gas, was  2,75 bn thousand cubic feet. EIA generally designates these two subcategories as "industrial natural gas."

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Some of the "delivered to consumers" industrial natural gas is used as a feedstock for producing chemicals, such as hydrogen, ammonia, fertilizers, etc. EIA does not publish comprehensive data on the industrial natural gas feedstock. The amount of industrial natural gas feedstock may be estimated based on industrial natural gas energy consumption in 2018 because data for 2019 have yet to be published.

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In 2018, natural gas accounted for 10.4 q (quadrillion) Btu of industrial energy consumption. Since the heat energy content of natural gas is 1,033 m Btu per one thousand cubic feet, then [10.4/1.033], i.e., 10.07 bn thousand cubic feet were consumed to produce industrial energy. In 2018, the overall industrial natural gas consumption was [8,38+1,68+0.86], i.e., 10.92 bn thousand cubic feet.

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Accordingly, the industrial natural gas feedstock is estimated at around [10.92-10.07], i.e., 0.85 bn thousand cubic feet. This estimate is conservative because, in 2014, only 0.554 q Btu (0.536 bn thousand cubic feet) of natural gas was used as feedstock.  This means that the amount of industrial natural gas to which AG-Cycle can be applied is [8.39-0.85], i.e., 7,54 bn thousand cubic feet, if industrial natural gas feedstocks in 2019 were the same as that in 2018. Since the average price of one thousand cubic feet of industrial natural gas in 2019 was $3.91, the cost of industrial natural gas to which AG-Cycle is applicable was  [7.54*$3.91], i.e.$29.5 bn.

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In 2019, the cost of natural gas for heating was estimated at [49.5+25.76+29.5], i.e., $104.8 bn.

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2.4. Residential and Commercial Heating Oil 

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From October 2019 to February 2020, the average price of 1 gal of residential heating oil was $3. Although the pertinent data on commercial heating oil are not routinely published by the US Energy Information Administration, the rule of thumb is that it is around 15% lower than the price of residential heating oil.

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From 2014 to 2018, the average annual consumption of residential and commercial heating oil was 3.59 bn gal and 2.27 bn gal, respectively. If in 2019, residential and commercial heating oil sales were equal to the average annual consumption for the five preceding years, then the overall cost of residential and commercial heating oil in 2019 would have been [3.59*$3+2.27*$3*0,85], i.e.$10.77 bn and $5.79 bn, totally $16.56 bn.

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3. Highway Vehicles

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In 2019,  in the US, 142.17 bn gal of motor gasoline and around 47.87 bn gal of diesel fuel were consumed by highway vehicles.  In 2019, the annual average 

retail prices of gasoline and diesel were  $2.6 and $3.0 per gal, respectively. The estimated cost of gasoline and diesel in 2019 was [142.17*2.6+47.87*3], i.e.,  $513.3 bn.

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4. Aviation

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In 2019, 18.27 bn gal of aviation fuel was consumed in the US by airlines; the average annual cost of aviation fuel was $2 per gal. Accordingly, the overall cost of aviation fuel was $36.54 bn.

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5. Conclusion

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In 2019, the overall cost of natural gas, heating distillate, gasoline, diesel fuel, and jet fuel in the US was estimated as [33.7+30.9+104.8+16.56+513.3+36.54], i.e., around $735.8 bn, if all coal-fired plants were converted to natural gas-fired power plants.

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If in 2019 AG-Cycle was implemented at full scale, it would reduce the aforementioned cost by [(33.7+30.6+104.8+16.56+513.3)*0.6+36.54*0.55****], i.e., around $441.6 bn, if the average annual fuel prices were the same as in 2019.

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****(since in aircraft the closed AG-Cycle is expected to be used, its efficiency will be reduced to around 55% due to the loss of around 10% of thrust)

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If in 2019 AG-Cycle was implemented at full scale, it would have reduced "Lease and plant fuel" and "Pipeline and distribution use" natural gas consumption by [2.75*0.6], i.e. 1,65 bn thousand cubic feet. In 2019, the average import price of US natural gas was $3,64 per thousand cubic feet. If this natural gas was imported, the natural gas manufacturers would have gotten an extra [1,65*3,64], i.e., $6 bn.