Natural Gas

Natural Gas Basics

What is natural gas?

Natural gas occurs deep beneath the earth's surface. Natural gas consists mainly of methane, a compound with one carbon atom and four hydrogen atoms. Natural gas also contains small amounts of hydrocarbon gas liquids and nonhydrocarbon gases. We use natural gas as a fuel and to make materials and chemicals.

How did natural gas form?

Millions of years ago, the remains of plants and animals (diatoms) decayed and built up in thick layers, sometimes mixed with sand and silt. Over time, these layers were buried under sand, silt, and rock. Pressure and heat changed some of this organic material into coal, some into oil (petroleum), and some into natural gas. In some places, the natural gas moved into large cracks and spaces between layers of overlying rock. In other places, natural gas occurs in the tiny pores (spaces) within some formations of shale, sandstone, and other types of sedimentary rock where it is referred to as shale gas or tight gas. Natural gas also occurs in coal deposits and is called coal bed methane.

In some places, gas escapes from small gaps in the rocks into the air; then, if there is enough activation energy from lightning or a fire, it burns. When people first saw the flames, they experimented with them and learned they could use them for heat and light.

How do we get natural gas?

The search for natural gas begins with geologists, who study the structure and processes of the earth. They locate the types of rock that are likely to contain natural gas deposits. Some of these areas are on land and some are offshore and deep under the ocean floor.

Geologists often use seismic surveys on land and in the ocean to find the right places to drill wells. Seismic surveys on land use echoes from a vibration source at the surface of the earth, usually a vibrating pad under a special type of truck. Geologists can also use small amounts of explosives as a vibration source. Seismic surveys conducted in the ocean rely on blasts of sound that create sonic waves to explore the geology beneath the ocean floor.

If a site seems promising, an exploratory well is drilled and tested. Once a formation is proven to be economic for production, one or more production (or development) wells are drilled down into the formation, and natural gas flows up through the wells to the surface. In the United States and a few other countries, natural gas is produced directly from shale and other types of rock formations that contain natural gas in pores within the rock. The rock formation is fractured by forcing water, chemicals, and sand down a well. This releases the natural gas from the rock, and the natural gas flows up the well to the surface. Wells drilled to produce oil may also produce associated natural gas.

Coal may contain coalbed methane, which can be captured when coal is mined. Coalbed methane can be added to natural gas pipelines without any special treatment. Another source of methane is biogas that forms in landfills and in vessels called digesters.

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.

Getting Natural Gas to Users

Transporting natural gas involves several steps

Transporting natural gas from the wellhead to consumers requires many infrastructure assets and processing steps, and it includes several physical transfers of custody.

Natural gas delivery infrastructure can be grouped into three categories:

• Processing
• Transportation
• Storage

Processing natural gas for transportation by pipeline

Natural gas fed into the mainline natural gas transportation system in the United States must meet specific quality measures so that the pipeline network (or grid) can provide uniform quality gas. Natural gas produced at the wellhead may contain contaminants and natural gas liquids, which must be removed before the natural gas can be safely delivered to the high-pressure, long-distance pipelines that transport natural gas to consumers.

Processing the wellhead natural gas into pipeline-quality dry natural gas can be complex and usually involves several processes to remove oil, water, natural gas liquids, and other impurities such as sulfur, helium, nitrogen, hydrogen sulfide, and carbon dioxide.

A natural gas processing plant typically receives natural gas from a gathering system of pipelines from natural gas wells and sends out processed gas to one or more major pipeline networks. Liquids removed at the processing plant may be sent to petrochemical plants, refineries, and other gas liquids consumers.

The number of stages and the type of techniques used to create pipeline-quality natural gas depends on the composition of the natural gas produced at the well. In some cases, several of the stages shown below may be integrated into one unit or operation, performed in a different order or at alternative locations (lease/plant), or not required at all. There are several stages of natural gas processing/treatment:

• Gas-oil-water separators: Pressure relief will cause a natural separation of gases from oil in a single-stage separator. In some cases, a multi-stage separation process is needed to separate the different fluid streams.
• Condensate separator: Condensates are most often removed from the natural gas stream at the wellhead with separators much like the gas-oil-water separator described above. The gas flow into the separator comes directly from the wellhead. Extracted condensate is sent to storage tanks.
• Dehydration: A dehydration process is needed to eliminate water that may cause the formation of hydrates and water condensation in pipelines.
• Contaminant removal: Nonhydrocarbon gases such as hydrogen sulfide, carbon dioxide, water vapor, helium, nitrogen, and oxygen must also be removed from the natural gas stream. The most commonly used technique is to first direct the flow though a vessel containing an amine solution. Amines absorb hydrogen sulfide and carbon dioxide from natural gas and can be recycled and regenerated for repeated use.
• Nitrogen extraction: Once the hydrogen sulfide and carbon dioxide are reduced to acceptable levels, the natural gas stream is routed to a Nitrogen Rejection Unit (NRU), where it is further dehydrated using molecular sieve beds.
• Methane separation: The process of demethanizing the natural gas stream can occur as a separate operation in a natural gas processing plant or as part of the NRU operation. Cryogenic processing and absorption methods are some of the ways used to separate methane from natural gas liquids (NGL).
• Fractionation: Fractionation is used to separate NGL into component liquids using the varying boiling points of the individual hydrocarbons in the NGL stream.

Pipelines move natural gas from production fields to markets

A natural gas transmission line is a wide-diameter and often, long-distance portion of a natural gas pipeline system, located between the gathering system (production area), the natural gas processing plant, and the other receipt points and the principal consumer service area(s). There are three types of transmission pipelines:

• Interstate natural gas pipelines operate and transport natural gas across state borders.
• Intrastate natural gas pipelines operate and transport natural gas within a state border.
• Hinshaw natural gas pipelines receive natural gas from interstate pipelines and deliver it to consumers for consumption within a state border.

When natural gas gets to the communities where it will be used (usually through large pipelines), it flows into smaller pipelines called mains. Small lines, called services, connect to the mains and go directly to homes or buildings where the natural gas will be used.

Natural gas can also be stored for times of peak demand

Underground natural gas storage provides pipelines, local distribution companies, producers, and pipeline shippers with an inventory management tool, seasonal supply backup, and access to natural gas needed to avoid imbalances between receipts and deliveries on a pipeline network.

There are three main types of natural gas underground storage facilities used in the United States today:

• Depleted natural gas or oil fields
  Most of the existing natural gas storage in the United States is in depleted natural gas or oil fields that are close to consumption centers.
• Salt caverns
  Salt caverns provide high withdrawal and injection rates relative to their working gas capacity. Base gas requirements are relatively low. Most salt cavern storage facilities have been developed in salt dome formations located in the Gulf Coast states. Salt caverns have also been leached from bedded salt formations in states in the Midwest, Northeast, and Southwest.
• Aquifers
  In some areas, most notably in the Midwest, natural aquifers have been converted to natural gas storage reservoirs. An aquifer is suitable for natural gas storage if the water bearing sedimentary rock formation is overlaid with an impermeable cap rock.

What is Liquefied Natural Gas?

Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, at about -260°Fahrenheit, for shipping and storage. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. This process, which was developed in the 19th century, makes it possible to transport natural gas to places pipelines do not reach.

The United States imports and exports LNG. Sometimes, LNG originally imported to the United States is re-exported to other destinations where prices are higher. In 2015, the United States imported about 92 billion cubic feet (Bcf) of LNG. Nearly all LNG imports were from Trinidad and Tobago, Norway, and Yemen. A small amount of LNG was imported from Canada.

In 2015, about 28 Bcf of LNG was exported from the United States, which included about 12 Bcf of re-exported LNG. Brazil (at 48%), Egypt (at 25%), and Turkey (at 27%) received the majority of the re-exported LNG. Of the remaining 16 Bcf of LNG exports, Japan and Taiwan each received about half, and small amounts were exported on trucks to Canada and Mexico.

Because LNG is more energy dense than gaseous natural gas, there is increasing interest in using LNG as a fuel for heavy-duty vehicles and other transportation applications.

Where Our Natural Gas Comes From

Most of the natural gas consumed in the United States is produced domestically

U.S. dry natural gas production and consumption were nearly balanced through 1986. After 1986, consumption began to outpace production, and imports of natural gas increased to meet U.S. demand for the fuel. After a five-year decline beginning in 2001, production increased from 2006 through 2015, when production of natural gas in the United States reached its highest recorded total. The increase in production was the result of more efficient, cost-effective drilling and production techniques, notably from shale, sandstone, carbonate, and other tight geologic formations. In 2015, U.S. dry natural gas production was equal to about 99% of U.S. natural gas consumption.

Five states accounted for about 67% of total U.S. dry natural gas production in 2014:¹

• Texas (28%)
• Pennsylvania (16%)
• Oklahoma (8%)
• Louisiana (8%)
• Wyoming (7%)

What is shale?

Shale is a fine-grained sedimentary rock that is easily broken into thin, parallel layers. Shale can contain a large amount of natural gas. Extensive efforts such as horizontal drilling and creating artificial fractures in the rock are often needed to achieve satisfactory production rates of natural gas from shale.

Natural gas from shale is one of many unconventional sources of natural gas. Other unconventional sources of natural gas include natural gas produced from coalbeds and from tight (impermeable) sandstone or chalk formations. For more information about natural gas production from tight geologic resources, visit EIA’s Energy in Brief article Shale in the United States.

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Supplemental natural gas supplies

Supplemental natural gas supplies include blast furnace gas, refinery gas, propane-air mixtures, and synthetic natural gas (natural gas made from petroleum hydrocarbons or from coal). These supplemental supplies equaled about 0.2% of U.S. natural gas consumption in 2015. The largest source of synthetic natural gas is the Great Plains Synfuels Plant in Beulah, North Dakota, where coal is converted to pipeline-quality natural gas.

¹ Year for which most recent state-level dry natural gas production data were available when this page was updated.

Natural Gas Imports and Exports

Although most of the natural gas consumed in the United States is produced domestically, the United States is a net importer of natural gas, meaning that it imports more natural gas than it exports.

The United States has relied on natural gas imports less in recent years, mainly because of increases in U.S. natural gas production. U.S. net imports of natural gas peaked in 2007. In 2015, the United States imported about 2.72 trillion cubic feet (Tcf) of natural gas and exported about 1.78 Tcf, resulting in net imports of nearly 0.93 Tcf.¹ In 2015, net imports (imports minus exports) of natural gas equaled about 3% of U.S. natural gas consumption.

Most natural gas is imported and exported by pipeline as a gas and by ship as liquefied natural gas (LNG). Small amounts of natural gas are also exported on trucks as LNG and as compressed natural gas (CNG).

In 2015, 93% of U.S. net imports of natural gas came by pipeline, and 7% came in LNG ships from around the world.

Pipeline imports of natural gas are mostly from Canada

In 2015, the United States received nearly all of its pipeline-imported natural gas from Canada. Less than 1% of natural gas pipeline imports were from Mexico.

LNG imports are a small share of total U.S. natural gas imports and consumption

In 2015, imports of LNG totaled about 0.09 Tcf. About 78% of the LNG imports were from Trinidad and Tobago, 13% were from Norway, 8% were from Yemen, and less than 1% were from Canada.

Most U.S. natural gas exports go to Canada and Mexico by pipeline

U.S. exports of natural gas reached a record high in 2015, largely because of increases in pipeline exports to Mexico. In 2015, pipeline exports accounted for 98% of U.S. natural gas exports. Canada received 40% of U.S. pipeline natural gas exports, and Mexico received 60%. U.S. exports of natural gas include domestically produced natural gas shipped to other countries as LNG and CNG. U.S. exports of natural gas also include LNG originally imported to the United States and then exported from the United States to new destinations. In 2015, U.S. exports of LNG and CNG accounted for about 2% of total U.S. exports of natural gas.

¹ Preliminary data for 2015.

Uses of Natural Gas

The United States used about 27.5 trillion cubic feet (Tcf) of natural gas in 2015, the equivalent of 28.3 quadrillion British thermal units (Btu) and 29% of total U.S. energy consumption.¹

Natural gas use by U.S. consuming sectors in 2015:

• Electric power—9.7 Tcf
• Industrial—9.1 Tcf
• Residential—4.6 Tcf
• Commercial—3.2 Tcf
• Transportation—0.9 Tcf

How natural gas is used

Most U.S. natural gas is used to heat buildings and to generate electricity, but some consuming sectors have other uses for natural gas.

The electric power sector uses natural gas to generate electricity. In 2015, natural gas was the source of about 26% of U.S. electric power sector energy consumption. (Other consuming sectors also use natural gas to generate electricity.)

The industrial sector uses natural gas as a fuel for process heating and for combined heat and power systems and as a raw material (feedstock) to produce chemicals, fertilizer, and hydrogen. In 2015, natural gas was the source of about 30% of U.S. industrial sector energy consumption.

The residential sector uses natural gas to heat buildings and water, to cook, and to dry clothes. About half of the homes in the United States use natural gas for these purposes. In 2015, natural gas was the source of about 23% of U.S. residential sector energy consumption.

The commercial sector uses natural gas to heat buildings and water, to operate refrigeration and cooling equipment, to cook, to dry clothes, and to provide outdoor lighting. Some consumers in the commercial sector also use natural gas as a fuel in combined heat and power systems. In 2015, natural gas was the source of about 18% of U.S. commercial sector energy consumption.

The transportation sector uses natural gas as a fuel to operate compressors that move natural gas through pipelines. A relatively small amount of natural gas is used as vehicle fuel in the form of compressed natural gas and liquefied natural gas. Nearly all vehicles that use natural gas as a fuel are in government and private vehicle fleets. In 2015, natural gas was the source of about 3% of U.S. transportation sector energy consumption, of which 97% was for natural gas pipeline and distribution operations.

Where natural gas is used

Natural gas is used throughout the United States, but five states accounted for about 39% of total U.S. natural gas consumption in 2015:

• Texas—14.3%
• California—9.0%
• Louisiana—5.4%
• New York—5.3%
• Florida—4.9%

¹Preliminary data for 2015.

Natural Gas & the Environment

Natural gas has many qualities that make it an efficient, relatively clean burning, and economical energy source. However, there are environmental and safety issues associated with the production and use of natural gas.

Natural gas is a relatively clean burning fossil fuel

Burning natural gas for energy results in fewer emissions of nearly all types of air pollutants and carbon dioxide (CO2) per unit of heat produced than coal or refined petroleum products. About 117 pounds of carbon dioxide are produced per million British thermal units (Btu) equivalent of natural gas compared to more than 200 pounds of CO2 per million Btu of coal and more than 160 pounds per million Btu of distillate fuel oil. These clean burning properties have contributed to the increased use of natural gas for electricity generation and the increased use of natural gas as a transportation fuel for fleet vehicles in the United States.

Natural gas is mainly methane—a strong greenhouse gas

Natural gas is made up mostly of methane, which is a potent greenhouse gas. Some natural gas leaks into the atmosphere from oil and natural gas wells, storage tanks, pipelines, and processing plants. These leaks were the source of about 29% of total U.S. methane emissions, but only about 2% of total U.S. greenhouse gas emissions in 2013¹. The oil and natural gas industry tries to prevent natural gas leaks. In areas where natural gas is produced but can't be transported economically, natural gas is flared or burned at well sites. This is considered to be safer than releasing methane into the atmosphere, and CO2 is not as potent a greenhouse gas as methane.

Natural gas exploration, drilling, and production can negatively affect the environment

When geologists explore for natural gas deposits on land, they may have to disturb vegetation and soils with their vehicles. A natural gas well on land may require an area to be cleared and leveled to host a pad where a natural gas well can be drilled. Well drilling activities produce air pollution and may disturb people, wildlife, and water resources. Pipelines are needed to transport the natural gas from the wells, and this usually requires clearing land to bury the pipe. Natural gas production can also result in the production of large volumes of contaminated water. This water has to be properly handled, stored, and treated so that it does not pollute land and water.

Although the natural gas that people use as a fuel is processed so that it is mainly methane, unprocessed natural gas from a well may contain many other compounds, including hydrogen sulfide, a very toxic gas. Natural gas with high concentrations of hydrogen sulfide is usually flared. Natural gas flaring produces CO2, carbon monoxide, sulfur dioxide, nitrogen oxides, and many other compounds depending on the chemical composition of the natural gas and depending on how well the natural gas burns in the flare. Natural gas wells and pipelines often have engines to run equipment and compressors that produce additional air pollutants and noise.

Advances in drilling and production technologies have positive and negative impacts on the environment

New drilling and natural gas recovery technologies have greatly reduced the area that has to be disturbed to produce natural gas. Horizontal and directional drilling techniques make it possible to produce more natural gas from a single well than in the past, so fewer wells are needed to develop a natural gas field. Hydraulic fracturing (commonly called hydrofracking, fracking, or fracing) of shale, sandstone, and carbonate rock formations is opening up large reserves of natural gas that were previously too expensive to develop. Fracking involves pumping liquids under high pressure into a well to fracture the rock, which allows natural gas to escape from the rock. There are some potential environmental concerns associated with the production of natural gas using this technique:

• The fracturing of wells requires large amounts of water. In some areas of the country, significant use of water for shale gas production may affect the availability of water for other uses, and can affect aquatic habitats.
• If mismanaged, hydraulic fracturing fluid—that may contain potentially hazardous chemicals—can be released by spills, leaks, faulty well construction, or other exposure pathways. These releases can contaminate surrounding areas.
• Hydraulic fracturing also produces large amounts of wastewater, which may contain dissolved chemicals and other contaminants that require treatment before disposal or reuse. Because of the quantities of water used and the complexities inherent in treating some of the wastewater components, treatment and disposal of the wastewater is important.
• According to the U.S. Geological Survey, hydraulic fracturing "causes small earthquakes, but they are almost always too small to be a safety concern. In addition to natural gas, fracking fluids and formation waters are returned to the surface. These wastewaters are frequently disposed of by injection into deep wells. The injection of wastewater into the subsurface can cause earthquakes that are large enough to be felt and may cause damage."
• Natural gas may be released to the atmosphere during and after well drilling, the amounts of which are being investigated.

Strict safety regulations and standards are required for natural gas production, transportation, distribution, and storage

Because a natural gas leak can cause an explosion, there are strict government regulations and industry standards in place to ensure the safe transportation, storing, distribution, and use of natural gas. Because natural gas has no odor, natural gas companies add a strong-smelling substance called mercaptan to the natural gas so that people will know if there is a leak. If you have a stove that burns natural gas, you may smell the rotten egg scent of natural gas when the pilot light goes out.

¹Based on carbon-dioxide equivalents.