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What is natural gas?

Natural gas is a fossil energy source that formed deep beneath the earth's surface. Natural gas contains many different compounds. The largest component of natural gas is methane, a compound with one carbon atom and four hydrogen atoms (CH4). Natural gas also contains smaller amounts of natural gas liquids (NGL; which are also hydrocarbon gas liquids), and nonhydrocarbon gases, such as carbon dioxide and water vapor. We use natural gas as a fuel and to make materials and chemicals.

How did natural gas form?

Millions to 100’s of millions of years ago and over long periods of time, the remains of plants and animals (such as diatoms) built up in thick layers on the earth’s surface and ocean floors, sometimes mixed with sand, silt, and calcium carbonate. Over time, these layers were buried under sand, silt, and rock. Pressure and heat changed some of this carbon and hydrogen-rich material into coal, some into oil (petroleum), and some into natural gas.

Three images, all about Petroleum & Natural Gas Formation.

The first image is about the ocean 300 to 400 million years ago. Tiny sea plants and animals died and were buried on the ocean floor. Over time, they were covered by layers of sand and silt.

The second image is about the ocean 50 to 100 million years ago. Over millions of years, the remains were buried deeper and deeper. The enormous heat and pressure turned them into oil and gas.

The third image is about oil & natural gas deposits. Today, we drill down through layers of sand, silt, and rock to reach the rock formations that contain oil and natural gas deposits.
Operators preparing a hole for the explosive charges used in seismic exploration
Operators Preparing a Hole for the Explosive Charges Used in Seismic Exploration

Source: Stock photography (copyrighted)

Did you know?

Because natural gas is colorless, odorless, and tasteless, natural gas companies add mercaptan to natural gas to give it a distinct and unpleasant odor to help detect leaks in natural gas pipelines. Mercaptan is a harmless chemical that smells like rotten eggs.

Where is natural gas found?

In some places, natural gas moved into large cracks and spaces between layers of overlying rock. The natural gas found in these types of formations is sometimes called conventional natural gas. In other places, natural gas occurs in the tiny pores (spaces) within some formations of shale, sandstone, and other types of sedimentary rock. This natural gas is referred to as shale gas or tight gas, and it is sometimes called unconventional natural gas. Natural gas also occurs with deposits of crude oil, and this natural gas is called associated natural gas. Natural gas deposits are found on land and some are offshore and deep under the ocean floor. A type of natural gas found in coal deposits is called coalbed methane.

How do we find natural gas?

The search for natural gas begins with geologists who study the structure and processes of the earth. They locate the types of geologic formations that are likely to contain natural gas deposits.

Geologists often use seismic surveys on land and in the ocean to find the right places to drill natural gas and oil wells. Seismic surveys create and measure seismic waves in the earth to get information on the geology of rock formations. Seismic surveys on land may use a thumper truck, which has a vibrating pad that pounds the ground to create seismic waves in the underlying rock. Sometimes small amounts of explosives are used. Seismic surveys conducted in the ocean use blasts of sound that create sonic waves to explore the geology beneath the ocean floor.

If the results of seismic surveys indicate that a site has potential for producing natural gas, an exploratory well is drilled and tested. The results of the test provide information on the quality and quantity of natural gas available in the resource.

Drilling natural gas wells and producing natural gas

If the results from a test well show that a geologic formation has enough natural gas to produce and make a profit, one or more production (or development) wells are drilled. Natural gas wells can be drilled vertically and horizontally into natural gas-bearing formations. In conventional natural gas deposits, the natural gas generally flows easily up through wells to the surface.

In the United States and in a few other countries, natural gas is produced from shale and other types of sedimentary rock formations by forcing water, chemicals, and sand down a well under high pressure. This process, called hydraulic fracturing or fracking, and sometimes referred to as unconventional production, breaks up the formation, releases the natural gas from the rock, and allows the natural gas to flow to and up wells to the surface. At the top of the well on the surface, natural gas is put into gathering pipelines and sent to natural gas processing plants.

Natural gas is processed for sale and consumption

Natural gas withdrawn from natural gas or crude oil wells is called wet natural gas because, along with methane, it usually contains NGL—ethane, propane, butanes, and pentanes—and water vapor. Wellhead natural gas may also contain nonhydrocarbons such as sulfur, helium, nitrogen, hydrogen sulfide, and carbon dioxide, most of which must be removed from natural gas before it is sold to consumers.

From the wellhead, natural gas is sent to processing plants where water vapor and nonhydrocarbon compounds are removed and NGL are separated from the wet gas and sold separately. Some ethane is often left in the processed natural gas. The separated NGL are called natural gas plant liquids (NGPL), and the processed natural gas is called dry, consumer-grade, or pipeline quality natural gas. Some wellhead natural gas is sufficiently dry and satisfies pipeline transportation standards without processing. Chemicals called odorants are added to natural gas so that leaks in natural gas pipelines can be detected. Dry natural gas is sent through pipelines to underground storage fields or to distribution companies and then to consumers.

In places where natural gas pipelines are not available to take away associated natural gas produced from oil wells, the natural gas may be reinjected into the oil-bearing formation, or it may be vented or burned (flared). Reinjecting unmarketable natural gas can help to maintain pressure in oil wells to improve oil production.

Coalbed methane can be extracted from coal deposits before or during coal mining, and it can be added to natural gas pipelines without any special treatment.

Most of the natural gas consumed in the United States is produced in the United States. Some natural gas is imported from Canada and Mexico in pipelines. A small amount of natural gas is also imported as liquefied natural gas.


Last updated: December 11, 2018

Natural gas statistics

Data for the United States for 2017, except where noted. Physical amounts (volumes) are in billion cubic feet (Bcf) and prices are in dollars per thousand cubic feet (Mcf).

U.S. production (dry gas) 27,291 Bcf
U.S. consumption 27,110 Bcf
U.S. imports  3,042 Bcf
U.S. exports  3,168 Bcf
Average citygate price  $4.16 per Mcf
Average price delivered to consumers
  • $10.91 per Mcf
  •  $7.88 per Mcf
  •  $4.10 per Mcf
  •  $3.52 per Mcf
Ranking of state residential prices

Highest—Hawaii—$38.88 per Mcf

Lowest—Montana—$7.62 per Mcf

Natural gas consumption by end use Amount—share of total
  • 9,250 Bcf—34%
  • 7,949 Bcf—29%
  • 4,412 Bcf—16%
  • 3,164 Bcf—12%
  • 1,564 Bcf—6%
  •    770 Bcf—3%
Liquefied natural gas (LNG) imports 78 Bcf
Number of producing natural gas wells 486,258
Natural gas percentage of utility-scale electricity generation 32%
Natural gas percentage of utility-scale electricity generation capacity (2016) 42%
Top natural gas-producing state Texas
World dry natural gas production(2015) 124,258 Bcf
World consumption(2015) 124,866 Bcf

Last updated: October 10, 2018