- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Tell me if this is a good investment (CNG tanks)
Posted on 5/16/11 at 2:19 pm
Posted on 5/16/11 at 2:19 pm
Let's say I get a new vehicle in the somewhat-near future:
A CNG tank would cost me $11,000.
I would get a 50% tax credit the next tax season.
I currently spend about $80/week on gas, and natural gas is consistently between 40-50% of the cost of gasoline. Also, there is a gas station with CNG pumps very close to my workplace, so it wouldn't be inconvenient to fill up.
Let's conservatively say that NG is 50% of gasoline, so I will save $40/week.
I would break even after 2 years, 9 months (($5500 tax credit + ($40/wk X 137.5 weeks) = 2 yrs, 9 mos)).
After that, I would begin saving $2080/yr, or an 18.9% return on my initial investment of $11,000.
What am I missing?? - Obviously, if gas prices go down, my savings per week will go down. Is there anything else I'm not thinking about?
A CNG tank would cost me $11,000.
I would get a 50% tax credit the next tax season.
I currently spend about $80/week on gas, and natural gas is consistently between 40-50% of the cost of gasoline. Also, there is a gas station with CNG pumps very close to my workplace, so it wouldn't be inconvenient to fill up.
Let's conservatively say that NG is 50% of gasoline, so I will save $40/week.
I would break even after 2 years, 9 months (($5500 tax credit + ($40/wk X 137.5 weeks) = 2 yrs, 9 mos)).
After that, I would begin saving $2080/yr, or an 18.9% return on my initial investment of $11,000.
What am I missing?? - Obviously, if gas prices go down, my savings per week will go down. Is there anything else I'm not thinking about?
Posted on 5/16/11 at 2:34 pm to NaturalBeam
quote:
What am I missing?? - Obviously, if gas prices go down, my savings per week will go down. Is there anything else I'm not thinking about?
If you find a way to hedge the risk associate with an increase in Nat Gas, then it's a good deal, assuming you have done all the research correctly.
The biggest risk is a price spike making your investment tank. You can probably just offset it by buying into something on the market, or if you have the ability, going into the futures market (probably too complicated for most.
How did you calculate "the cost of Natural Gas"? You need to do it on a per mile ratio, IMO.
Posted on 5/16/11 at 2:45 pm to NaturalBeam
What's the increase in insurance going to be? Any?
Posted on 5/16/11 at 2:46 pm to TheHiddenFlask
quote:Yeah, my understanding is the the price of gas and NG tend to move together, so my "profit margin" would somewhat remain intact either way (to a limited extent), but obviously there is some uncertainty there which could easily make the investment less (or more) worthwhile.
The biggest risk is a price spike making your investment tank
quote:Good point - I haven't done this much research on it yet. Again, my rough understanding is that both get about the same mpg, but I would need to recalculate with exact figures.
You need to do it on a per mile ratio, IMO.
Posted on 5/16/11 at 2:48 pm to TigerDeBaiter
quote:Pretty sure not, but definitely something to inquire about.
What's the increase in insurance going to be? Any?
Posted on 5/16/11 at 3:27 pm to NaturalBeam
Would the conversion of a CNG tank void your warranty?
Posted on 5/16/11 at 8:45 pm to addistiger
You wont have to worry about a spike in nat gas prices anytime soon
Posted on 5/16/11 at 9:07 pm to Me4Heisman
Yeah. Cause commodities that are really hard to store and take a long time to increase production on are usually really stable, right?
Posted on 5/16/11 at 10:54 pm to TheHiddenFlask
The oversupply of nat gas makes storage considerations a nonissue right now
This post was edited on 5/16/11 at 10:55 pm
Posted on 5/16/11 at 11:31 pm to Me4Heisman
I don't actually disagree with your original sentiment, but Nat Gas is incredibly volatile in it's nature.
Not meant as an attack, but are you selling calls on nat gas futures right now?
If not, why?
Not meant as an attack, but are you selling calls on nat gas futures right now?
If not, why?
Posted on 5/17/11 at 1:21 am to NaturalBeam
Will you be able to get gas if you travel?
Posted on 5/17/11 at 6:27 am to TheHiddenFlask
I work in the industry - upstream
Posted on 5/17/11 at 7:15 am to Me4Heisman
quote:
The oversupply of nat gas makes storage considerations a nonissue right now
So you're saying that current production is having difficulty finding a market?
It used to be in the NG market that storage was not necessarily the issue. The issue was getting the NG from storage to market in a timely manner. The bottleneck was due to the lack of pipeline and compression infrastructure during peak demand (i.e, usually cold winter days and/or hot summer days). Essentially what you're saying is that the pipelines and storage is full and the producers can ramp up production on peak demand?
If so, I can generally see hydraulically how the addition of more producers (and I'm thinking of the TX, OK, LA, AK, MS, and AL areas) has alleviated some of the the storage withdrawal bottlenecks thus shaving off some of the price spikes that we have seen in the past during peak demand.
Popular
Back to top
Follow TigerDroppings for LSU Football News