Natural Gas

Natural gas is an important source of energy in the United States. Like petroleum, natural gas is composed of hydrocarbons, which are chemical compounds containing both hydrogen and carbon. The molecular structure of hydrocarbon compounds varies from the simplest, methane, to very heavy and very complex molecules, such as those found in petroleum.

Methane, ethane, and propane are the primary constituents of natural gas, with methane making up 73% to 95% of the total. Consumer-grade natural gas is ‘‘dry gas,’’ which means that it has been processed to remove water vapor, nonhydrocarbon gases (such as helium and nitrogen), and certain compounds that liquefy during the processing (such as lease condensate and natural gas plant liquids). Lease condensate is a liquid mix of heavy hydrocarbons recovered during natural gas processing at a lease, or field separation, facility. Natural gas plant liquids are compounds such as propane and butane that are recovered as liquids at other facilities later in the processing.

The natural gas industry developed out of the petroleum industry. Wells drilled for oil often produced considerable amounts of natural gas, but early oilmen had no idea what to do with it. Originally considered a waste by-product, natural gas had no market. Even if a use for natural gas had been known at the time, there were no transmission lines to deliver it. As a result, the gas was flared, or burned off. Pictures of southeastern Texas in the early twentieth century show thousands of wooden drilling rigs, each topped with a plume of flaming gas. Even today, flaring sites are sometimes the brightest spots in nighttime satellite images, outshining even the largest urban areas.

Eventually, researchers found ways to use natural gas for lighting, cooking, and heat. In 1925 the first natural gas pipeline, more than 200 miles (322 km) long, was built from Louisiana to Texas. U.S. demand grew rapidly, especially after World War II (1939–1945). By the 1950s natural gas was providing a quarter of the nation’s energy needs. At the beginning of the twenty-first century natural gas was second only to coal in the share of U.S. energy produced. (See Table 1.1 in Chapter 1.) Crude oil was third. A vast pipeline transmission system now connects production facilities in the United States, Canada, and Mexico with natural gas distributors.

Figure 3.1 shows the overview of production and consumption of natural gas for 2007. Notice how imports make up only a small share of the natural gas that is consumed in the United States. The industrial sector consumed the largest amount of natural gas resources in 2007, and the transportation sector consumed the least amount.

Figure 3.2 shows the pattern of natural gas supply and distribution in the United States in 2006. Not all the gas withdrawn from gas and oil wells ends up as dry gas that can be immediately used; about 20% is lost during extraction and processing. Some natural gas is imported, primarily from Canada, a small amount is exported, and some is stored. Natural gas that is produced in this country, imported, and withdrawn from storage is then used immediately as fuel primarily in the residential, commercial, industrial, and electric power sectors. A small amount is used by the gas industry itself and in transportation.

The Production of Natural Gas

As mentioned previously, natural gas is produced from gas and oil wells; there is little delay between production and consumption, except for gas that is placed in storage. Therefore, changes in demand are almost immediately reflected by changes in wellhead flows, or supply.

The Energy Information Administration (EIA) reports in Annual Energy Review 2007 (June 2008, http://www.eia.doe.gov/aer/pdf/aer.pdf) that from 1970 through 1973 the total U.S. natural gas production peaked at around 21 trillion cubic feet (Tcf; 594.6 billion cubic m [bcm]). By 2007 it had dropped to 19.3 Tcf (538 bcm). (See Figure 3.3.). The EIA notes that Texas, Louisiana, and Oklahoma accounted for 38% of the natural gas produced in the United States in 2007. Even though production is increasing because of demand and rising prices, it continues to be outpaced by consumption. Imported gas makes up the difference between supply and demand.

Natural Gas Wells

In 2007 there were 427,000 gas wells in operation in the United States. (See Figure 3.4.) Even though the number of producing wells increased steadily after 1960 and more sharply after the mid-1970s, the number of gas wells in operation fluctuates from year to year because new wells are opened and old wells are closed. Weather and economic conditions also affect well operations.

The average productivity of natural gas wells peaked in 1971, then dropped throughout most of the 1970s and the mid-1980s. It has remained at a relatively steady low level since then. At the peak of productivity in 1971, U.S. natural gas wells averaged 435,000 cubic feet of natural gas per day per well. (See Figure 3.5.) In 2007 they averaged 118,000 cubic feet per day per well.

Offshore Production

Most offshore natural gas wells are located in the Gulf of Mexico and off the coast of California. Offshore wells accounted for about 3.5 Tcf (99.1 bcm) of the estimated 24.5 Tcf (693.8 bcm) of gross withdrawals of natural gas in 2007, or about 14% of the total U.S. production. (See Figure 3.6.) This percentage does not include wells off the shores of states, but includes only federal (Outer Continental Shelf) offshore wells.

Most offshore drilling occurs on the Outer Continental Shelf, in waters up to 600 feet (183 m) deep. Figure 3.7 is a diagram of a continental margin. The continental shelf varies from one coastal area to another: the shelf is relatively narrow along the Pacific coast, wide along much of the Atlantic coast and the Gulf of Alaska, and widest in the Gulf of Mexico.

The development of offshore oil and gas resources began with the drilling of the Summerland oil field along the coast of California in 1896, where about four hundred wells were drilled. Since then the industry has continually improved drilling technology. In the twenty-first century, deepwater petroleum and natural gas exploration occurs from platforms and drill ships, and shallow-water exploration occurs from gravel islands and mobile units.

Even though most natural gas is transported by pipelines, rather than by tanker ships, accidents such as the 1989 Exxon Valdez oil spill in Alaska and the 2002 Prestige oil spill off the coast of Spain have focused attention on all types of offshore drilling and tanker transport. Even before the Exxon Valdez oil spill, environmentalists were calling for the curtailment of offshore drilling for both oil and gas. The spills from refining and storage facilities triggered by Hurricane Katrina in 2005 raised additional concerns. (See Chapter 2.)

Natural Gas Reserves

Reserves are estimated volumes of gas in known deposits that are believed to be recoverable in the future. Proved reserves are those gas volumes that geological and engineering data show with reasonable certainty to be recoverable. Proved reserves of natural gas amounted to 211.1 Tcf (5.9 trillion cubic m [Tcm]) in 2006. (See Table 3.1.)

Natural gas reserves in North America are generally more abundant than crude oil reserves. In U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves: 2006 Annual Report (November 2007, http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/crude_oil_natural_gas_reserves/current/pdf/arr.pdf), the EIA indicates that in 2006 Texas had the largest percentage of the U.S. dry natural gas proved reserves at 61.8 Tcf (1.7 Tcm), which represented 29% of the U.S. natural gas reserves. Wyoming had 23.5 Tcf (11%; 665.4 bcm) and New Mexico, Oklahoma, and Colorado each had over 17 Tcf (481.4 bcm), representing 8% of the proved natural gas reserves for each of these states.

According to the EIA, the North Slope fields of Alaska were estimated to contain reserves amounting to 10.2 Tcf in 2006, or 5% of the U.S. natural gas reserves. As of September 2008, there was still no easy way to transport those reserves to the lower forty-eight states, but progress was being made. The Federal Energy Regulatory Commission explains in Fifth Report to Congress on Progress Made in Licensing and Constructing the Alaska Natural Gas Pipeline (February 2008, http://www.ferc.gov/legal/staff-reports/angta-fifth.pdf) that in May 2007 the Alaska legislature passed the Alaska Gasline Inducement Act (AGIA), which allowed the state to choose an

applicant to proceed with a federal application to construct an Alaskan natural gas pipeline. In July 2008 Alaska had chosen an applicant, and in August 2008 the Alaska legislature authorized the awarding of the AGIA license to TransCanada Alaska.

Underground Storage

Because of seasonal, daily, and even hourly changes in demand, substantial natural gas storage facilities have been created. Many are depleted gas reservoirs located near transmission lines and marketing areas. Gas is injected into storage when market needs are lower than the available gas flow, and gas is withdrawn from storage when supplies from producing fields and the capacity of transmission lines are not adequate to meet peak demands. At the end of 2007 gas in underground storage totaled approximately 7.1 Tcf (198.2 bcm). This natural gas consisted of base gas (permanently stored gas needed to maintain the proper pressure in the storage area) plus working gas (gas that can be released from storage and used). (See Figure 3.8.)

Transmission of Natural Gas

A vast network of natural gas pipelines crisscrosses the United States. The natural gas in this 250,000-mile (402,000-km) system generally flows northeastward, primarily from Texas and Louisiana, the two major gas-producing states, and from Oklahoma and New Mexico. (See Figure 3.9.) It also flows west to California.

Imports of natural gas enter the United States via pipe-line from Canada into Idaho, Maine, Michigan, Montana, New Hampshire, New York, North Dakota, Washington, and Vermont. Natural gas also enters via pipeline into Texas from Mexico. According to the EIA, in Natural Gas Annual 2006 (October 2007, http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/natural_gas_annual/current/pdf/nga06.pdf), 86% of imported natural gas arrived in the United States by pipeline in 2006. The remainder was shipped as liquefied natural gas, arriving by tanker from Algeria, Egypt, Nigeria, and Trinidad/Tobago. (For the amount from each country, see Figure 3.2.) Liquefied natural gas is produced by cooling natural gas to -260^° Fahrenheit (-162^° C); at this temperature natural gas changes from a gas to a liquid.

Domestic Natural Gas Consumption

Natural gas fulfills an important part of the country’s energy needs. It is an attractive fuel not only because its price is relatively low but also because it burns cleanly and efficiently, which helps the country meet its environmental goals.

Nationally, natural gas consumption rose from 1949 through 1972, then generally declined through 1986. Since 1986 natural gas consumption has been rising, hitting an all-time high of 23.3 Tcf (651.3 bcm) in 2000. (See Table 3.2.) From 2000 through 2007, prices have fluctuated slightly but remained somewhat stable.

In 2007, 7.8 Tcf (34% of the natural gas consumed; 226.5 bcm) was used by industry; 6.9 Tcf (30%; 198.2 bcm) was used by electric utilities; 4.9 Tcf (20%; 141.6 bcm) was used by residences; 3 Tcf (13%; 85 bcm) was used by commercial customers; and 0.7 Tcf (3%; 21.2 bcm) was used to transport the gas through pipelines, deliver gas to consumers, and fuel vehicles. (See Figure 3.1 and Table 3.2.)

Residential energy consumption depends heavily on weather-related heating demands and the number and types of uses of this energy source. According to the U.S. Census Bureau (June 3, 2008, http://www.census.gov/prod/2007pubs/08abstract/construct.pdf), about 52% of all residential energy consumers in the United States used gas to heat their homes in 2005. Residential consumption is also affected by conservation practices and the efficiency of gas appliances such as water heaters, stoves, and gas clothes dryers. In Natural Gas Annual 2006, the EIA lists Texas, California, Louisiana, and New York, respectively, as having been the largest residential users of natural gas by volume in 2006. According to the Census Bureau (December 22, 2006, http://www.census.gov/compendia/statab/tables/08s0013.pdf), California, Texas, and New York were the top three most populous states, in that order, as of July 1, 2006, which would help explain their high volume of natural gas consumption. Louisiana was the twenty-fifth most populous state at that time.

In 2007 the commercial sector used 3 Tcf (85 bcm) of natural gas. (See Table 3.2.) Its use, as with residential consumption, depends heavily on seasonal requirements and on the number of users and conservation measures they have taken.

The industrial sector has historically been the largest consumer of natural gas. Consumption in this sector was 7.8 Tcf (226.5 bcm) in 2007, up slightly from 7.6 Tcf (170 bcm) in 2006, but below the high of 10.2 Tcf (283.2 bcm) used in 1973. (See Table 3.2.) After 1973 natural gas consumption in the industrial sector declined quite steadily through 1986, increased through 1997, and then generally declined through 2007. Industrial use grew from 1986 through 1997 because natural gas was substituted for petroleum for some purposes.

Natural Gas Prices

Natural gas prices can vary across the nation because federal and state rate structures differ. Region also plays a role. For example, prices are lower in major natural gas–producing areas where transmission costs are lower.

From the mid-twentieth century through the early 1970s natural gas prices were relatively stable. (See Figure 3.10.) Then governmental deregulation of the industry and the restructuring of companies brought about a period of sharply rising prices, with wellhead prices (the value of natural gas at the mouth of the well) reaching a high in 1983, generally declining through 1995, and then generally increasing through 2005. Prices fell in 2006 and

2007. According to the EIA, in Annual Energy Review 2007, the average price of natural gas at the wellhead was $5.34 in real dollars (i.e., adjusted for inflation) per 1,000 cubic feet in 2007, sharply up from $2.83 in 2002.

At the retail price level (in real dollars), residential customers paid $10.87 per 1,000 cubic feet of natural gas in 2007, compared to $7.57 in 2002. (See Table 3.3.) Commercial consumers paid $9.45 per 1,000 cubic feet in 2007, and industrial consumers paid $6.36 per 1,000 cubic feet that year.

Much of the variation in natural gas prices through the years can be attributed to changes in the natural gas industry. The passage of the Natural Gas Policy Act of 1978 allowed prices at the wellhead to rise sharply. (See Figure 3.10.) On January 1, 1985, prices for new gas (that which was produced from new formations and fields or drilling after April 1977) were deregulated, and additional volumes of onshore production were deregulated on July 1, 1987. In 1988 President Ronald Reagan (1911–2004) signed legislation removing all remaining wellhead price controls by 1993.

The 1978 law not only allowed prices to go up but it also opened the market to the forces of supply and demand. Now that prices are deregulated and the industry is no longer constrained by federal controls, the natural gas industry has become more sensitive to market signals and responds more quickly to changes in economic conditions.

Natural Gas Imports and Exports

U.S. natural gas trading was limited to the neighboring countries of Mexico and Canada until shipment of natural gas in liquefied form became a feasible alternative to pipelines. In 1969 the first shipments of liquefied natural gas were sent from Alaska to Japan, and U.S. imports of liquefied natural gas from Algeria began the following year.

The EIA states in Annual Energy Review 2007 that in 2007 U.S. net imports of natural gas (total imports minus total exports) by all routes totaled 3.8 Tcf (113.2 bcm), or 16.5% of domestic consumption. Natural gas imports have been increasing significantly since 1986. Historically, Canada has been by far the major supplier of U.S. natural gas imports, accounting for 82% of the natural gas imported in 2007. (See Figure 3.11.)

The EIA notes that the United States exported 809 billion cubic feet of natural gas in 2007. (See Figure 3.11.) Canada bought the largest amount (472 billion cubic feet), followed by Mexico (288 billion cubic feet), and Japan (47 billion cubic feet).

International Natural Gas Usage

World Production

The world production of dry natural gas totaled 104.7 Tcf (2.9 Tcm) in 2006. (See Table 3.4.) Russia and the United States were the two top producers of this energy source. Russia accounted for 23.2 Tcf (651.3), or 22% of the world production, and the United States produced 18.5 Tcf (538 bcm), or 18% of the world production.

World Consumption

In Annual Energy Review 2007, the EIA shows that the world consumption of natural gas has increased steadily over the past several decades, from 52.9 Tcf (1.5 Tcm) in 1980 to 105.4 Tcf (2.9 Tcm) in 2006. The United States consumed the largest amount of natural gas in 2006, followed by Russia. (See Figure 3.12.) Combined, they accounted for 36% of world consumption in 2006.

Future Trends in the Gas Industry

The EIA predicts in Annual Energy Outlook 2008 (June 2008, http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2008).pdf) that from 2006 to 2030 the total U.S. natural gas production will grow modestly. Consumption will increase through 2016 and then decrease through 2030, but its share of total energy consumption during these years will fall from 22% in 2006 to 20% in 2030. The importation of liquid natural gas from overseas will increase from 2006 to 2030, but imports of natural gas from Canada are expected to decline during this period. Natural gas prices for residential customers are projected to increase after 2016.

Domestic Production

According to the EIA, in Annual Energy Outlook 2008, total domestic natural gas production is projected to increase somewhat from 2006 (18.5 Tcf; 523.8 bcm) through 2030 (19.4 Tcf; 538 bcm), primarily from two sources: unconventional resources in the lower forty-eight states and Alaska, if a natural gas pipeline becomes operational in 2020. Other sources are expected to decline. Figure 3.13 shows projected figures for these different types of natural gas production. Unconventional sources are those from which it is more difficult and less economically sound to extract natural gas, because the technology to reach it has not been developed fully or is too expensive.

Domestic Consumption

In Annual Energy Outlook 2008, the EIA projects that consumption of natural gas will increase from 21.7 Tcf (623 bcm) in 2006 to a peak of 23.8 Tcf (679.6 bcm) in 2016. At that time the price of natural gas is projected to rise, and consumption is expected to decline to 22.7 Tcf (651.3 bcm) in 2030. Demand for natural gas by industrial consumers is expected to grow slowly because of high prices from 7.6 Tcf (212.4 bcm) in 2006 to 8.1 Tcf (226.5 bcm) in 2030. High prices will also limit growth in the residential and commercial sectors, where natural gas use will grow from a combined 7.2 Tcf (198.2 bcm) in 2006 to 8.8 Tcf (254.9 bcm) in 2030. (See Figure 3.14.) High prices will result in a projected decrease in the use of natural gas for electricity generation.

Imports and Exports

Net imports of natural gas are projected to increase to meet demand from 2006 to 2030. Most of these imports will come from overseas in the form of liquefied natural gas. (See Figure 3.15.) A decline in Canada’s non-Arctic conventional natural gas production will be only partially offset by its Arctic and unconventional production. This estimation is based on projections that the Canada natural gas pipeline will not be built by 2020 due to reportedly high costs for its construction, along with the development costs for three natural gas fields that would supply the gas. Natural gas exports to Mexico peaked in 2004 (shown as a negative import value in Figure 3.15) and then declined for a period as Mexico developed its own natural gas infrastructure. However, exports to Mexico are expected to increase again fairly steadily beginning in about 2012.

chapter 3
NATURAL GAS

Natural gas is an important source of energy in the United States. Methane, ethane, and propane are the primary constituents of natural gas, with methane making up 73 to 95% of the total.

The natural gas industry developed out of the petroleum industry. Wells drilled for oil often produced considerable amounts of natural gas, but early oilmen had no idea what to do with it. Originally considered a waste by-product of oil production, natural gas had no market, nor were transmission lines available to deliver it even if a use had been known. As a result, the gas was burned off, or flared. Pictures of southeast Texas in the early twentieth century show thousands of wooden drilling rigs topped with plumes of gas flaming like burning candles. Even today, flaring sites are sometimes the brightest areas visible in nighttime satellite images, outshining even the largest urban areas.

Nonetheless, researchers soon found ways to use natural gas. In 1925 the first natural gas pipeline, more than 200 miles long, was built from Louisiana to Texas. U.S. demand grew rapidly, especially after World War II. By the 1950s natural gas was providing one-quarter of the nation's energy needs. In the early 2000s natural gas was second only to coal in the share of U.S. energy produced. Crude oil was third. (See Table 1.1 in Chapter 1.) A vast pipeline transmission system connects production facilities in the United States, Canada, and Mexico with natural gas distributors. Figure 3.1 shows the production and consumption figures for natural gas for 2003. Figure 3.2 shows the pattern of natural gas supply and distribution in the United States in 2002.

THE PRODUCTION OF NATURAL GAS

Natural gas is produced from gas and oil wells. There is little delay between production and consumption, except for gas that is placed in storage. Changes in demand are almost immediately reflected by changes in wellhead flows, or supply.

Total U.S. natural gas production in 2003 was 19.1 trillion cubic feet, below the peak levels produced from 1969 to 1975. (See Figure 3.3.) According to the Energy Information Administration (EIA) in its Annual Energy Review 2003, Texas, Louisiana, and Oklahoma accounted for 36% of the natural gas produced in the United States in 2003. Although production levels of natural gas are being driven up by increasing demand and rising prices, production continues to be outpaced by consumption. Imported gas makes up the difference between supply and demand.

Natural Gas Wells

In 2003, 366,000 gas wells were in operation in the United States. (See Figure 3.4.) Although the number of producing wells increased steadily after 1960 and more sharply after the mid-1970s, there are slight fluctuations in the number of gas wells in operation year-to-year due to the opening of new wells and the closing of old wells, as well as the effects of weather and economics on well operations.

The average productivity of natural gas wells dropped throughout most of the 1970s and the mid-1980s after hitting peak productivity in 1971; it has remained at a relatively steady low level since then. (See Figure 3.5.)

Offshore Production

Offshore drilling for natural gas accounted for about one-fifth of the total U.S. production in 2003. (See Figure 3.6.) Almost all natural gas produced offshore comes from the Gulf of Mexico and offshore California. U.S. offshore production is expected to increase to meet the nation's growing need for energy, although this type of production could be slowed by environmental restrictions.

Offshore drilling generally occurs on the outer continental shelf, the submerged area offshore with a depth of up to 200 meters (656 feet). Figure 3.7 is a diagram of a continental margin. The continental shelf varies from one coastal area to another. The shelf is relatively narrow along the Pacific coast, wide along much of the Atlantic coast and the Gulf of Alaska, and widest in the Gulf of Mexico. The U.S.

FIGURE 3.1

Department of the Interior has leased more than 1.5 billion acres of offshore areas to oil companies for offshore drilling.

The development of offshore oil and gas resources began with the drilling of the Summerland oil field in California in 1896, where about 400 wells were drilled. In the search for oil and gas in offshore areas, the industry has continually improved drilling technology. Today, deepwater petroleum and natural gas exploration occurs from platforms and drill ships, while shallow-water explorations occur from gravel islands and mobile units.

Even though natural gas is transported mostly by pipelines instead of tankers, accidents such as the 1989 Exxon Valdez oil spill in Prince William Sound, Alaska, and the Prestige oil spill off the coast of Spain in 2002 have focused attention on all types of offshore drilling and tanker transport. Even before the Exxon Valdez oil spill, environmentalists were calling for the curtailment of offshore drilling for both oil and gas.

Natural Gas Reserves

Reserves are estimated volumes of gas in known deposits that are believed to be recoverable in the future. Proved reserves are those gas volumes that geological and engineering data show with reasonable certainty to be recoverable. Proved reserves of natural gas amounted to 195.6 trillion cubic feet in 2002. (See Table 3.1.)

Natural gas reserves in North America are generally more abundant than crude oil reserves, although historically they have been difficult to estimate accurately. At one time the U.S. Department of Energy (DOE) estimated that proven supplies of recoverable gas in the United States would last fewer than eight years. But new discoveries and technological improvements have increased the estimated recoverable supply of natural gas to fifty years or more.

The North Slope fields of Alaska are estimated to contain reserves amounting to 35 trillion cubic feet, but at the moment there is no easy way to transport those reserves to the lower forty-eight states. By late 2004 the idea of building a gas pipeline was still being debated. If built, the pipeline could deliver 4.5 billion cubic feet of natural gas per day to the lower forty-eight states—about 10% of the nation's daily gas consumption.

Underground Storage

Because of seasonal, daily, and even hourly changes in gas demand, substantial natural gas storage facilities have

FIGURE 3.2

FIGURE 3.3

FIGURE 3.4

been created to meet supply needs. Many of these storage centers are depleted gas reservoirs located near transmission lines and marketing areas. Gas is injected into storage when market needs are lower than the available gas flow,

FIGURE 3.5

FIGURE 3.6

and gas is withdrawn from storage when supplies from producing fields and/or the capacity of transmission lines are not adequate to meet peak demands. At the end of 2003, gas in underground storage totaled approximately 6.9 trillion cubic feet. (See Figure 3.8.)

TRANSMISSION OF NATURAL GAS

A vast network of natural gas pipelines crisscrosses the United States, connecting every state except Alaska, Hawaii, and Vermont. (Vermont receives its gas directly from Canada and is not connected to the U.S. pipeline.)

FIGURE 3.7

The natural gas in this quarter-million-mile system generally flows northeastward, primarily from Texas and Louisiana, the two major gas-producing states, and to a lesser extent from Oklahoma and New Mexico. (See Figure 3.9.) It also flows west to California.

Imports enter the United States via pipeline from Canada in Idaho, Maine, Michigan, Montana, New Hampshire, New York, North Dakota, Washington, and Vermont. It also enters via pipeline in Texas from Mexico. According to Natural Gas Annual 2002, published by the EIA in 2004, these pipeline imports made up 94% of total U.S. imports of natural gas in 2002. The remainder is shipped to the United States from Algeria, Australia, Indonesia, Nigeria, Oman, Qatar, Trinidad, and the United Arab Emirates as liquefied natural gas.

The largest users of natural gas in the residential sector in 2002 were, from highest to lowest, Texas, California, Louisiana, New York, and Illinois.

DOMESTIC NATURAL GAS CONSUMPTION

Nationally, natural gas consumption rose from 1949 through 1973, then declined through 1986. Since 1986 natural gas consumption has been generally rising, hitting an all-time high of 23.3 trillion cubic feet in 2000, then declining to 21.9 trillion cubic feet by 2003. (See Table 3.2.) In 2003, 32% of the natural gas was used by industry, 23% by residences, 22% by electric utilities, and 14% by commercial customers; 3% was used as pipeline fuel in the gas transporting process.

Natural gas fills an important part of the country's energy needs. It is an attractive fuel not only because its price is relatively low but also because it is clean and efficient and can help the country meet both its environmental goals and its energy needs.

The residential sector used 5.1 trillion cubic feet of natural gas in 2003. (See Table 3.2.) Energy consumption by residences depends heavily on weather-related home-heating demands. Conservation practices and efficiency of gas appliances such as water heaters and stoves also affect residential consumption patterns. The U.S. Census Bureau reported in its American Community Survey that 57% of all residential energy consumers in the United States used gas to heat their homes in 2003.

The use of natural gas in the commercial sector was 3.1 trillion cubic feet in 2003. (See Table 3.2.) Like residential consumption, use in the commercial sector depends heavily on seasonal requirements, as well as the

TABLE 3.1

number of users and conservation measures taken by commercial establishments.

The industrial sector has historically been the largest consumer of natural gas. Consumption in this sector in 2003 was 8.1 trillion cubic feet, down from 8.6 trillion cubic feet in 2002. The all-time high of 10.2 trillion cubic feet occurred in 1973. (See Table 3.2.) After 1973 natural gas consumption declined through 1986, steadily increased through 2000, and then declined somewhat through 2003. Substitution of natural gas for petroleum for some industrial purposes caused much of the increase in natural gas consumption from 1986 through 2000.

NATURAL GAS PRICES

Natural gas prices can vary because of differing federal and state rate structures. Region also plays a role—for example, prices are lower in major natural gas-producing areas where transmission costs are lower. From the mid-twentieth century through the early 1970s, natural gas prices were relatively stable. (See Figure 3.10.) Thereafter, deregulation and industry restructuring brought about a period of sharply rising prices, with wellhead prices (the value of natural gas at the mouth of the well) reaching a high in 1983, declining until 1991, and then generally increasing through 2003. The average price of all categories of natural gas at the wellhead in 2003 was $4.71 per 1,000 cubic feet, sharply rising from $2.84 in 2002.

At the retail price level in real dollars, residential customers paid $8.99 per thousand cubic feet of natural gas in 2003 and $7.61 in 2002. (See Table 3.3.) Commercial consumers paid $7.82 per thousand cubic feet in 2003, while industrial consumers paid $5.47 per thousand cubic feet.

Much of the variation in natural gas prices through the years can be attributed to changes in the natural gas industry. The passage of the Natural Gas Policy Act of

FIGURE 3.8

FIGURE 3.9

1978 (NGPA; PL 95–621) triggered a dramatic transformation in the natural gas industry. The NGPA allowed gas prices at the wellhead to rise gradually. (See Figure 3.10.) On January 1, 1985, new gas prices were deregulated, and additional volumes of onshore production were deregulated on July 1, 1987. In 1988 President Ronald Reagan

TABLE 3.2

FIGURE 3.10

signed legislation removing all remaining natural gas wellhead price controls by 1993.

The NGPA allowed prices to go up, but it also opened the market to the forces of supply and demand. Now that prices are deregulated and the industry is no longer constrained by federal controls, the natural gas industry has become more sensitive to market signals and is able to respond more quickly to changes in economic conditions.

NATURAL GAS IMPORTS AND EXPORTS

U.S. natural gas trading was limited to the neighboring countries of Mexico and Canada until shipping natural gas in liquefied form became a feasible alternative to pipelines. In 1969 the first shipments of liquefied natural gas (LNG) were sent from Alaska to Japan, and U.S. imports of LNG from Algeria began the following year.

In 2003 U.S. net imports of natural gas by all routes totaled 3.2 trillion cubic feet, 14.8% of domestic consumption. Natural gas imports have been increasing significantly since 1986. Historically, Canada has been by far the major supplier of U.S. natural gas imports, accounting for 87% of the natural gas imported in 2003 (see Figure 3.11.)

The EIA reported in Annual Energy Review 2003 (published in 2004) that the United States exported 692 billion cubic feet of natural gas in 2003. Of these exports, Mexico bought the largest amount (333 billion cubic feet), while Canada purchased 294 billion cubic feet, and Japan bought 64 billion cubic feet.

INTERNATIONAL NATURAL GAS USAGE

World Production

World production of dry natural gas totaled an all time high of 92.2 trillion cubic feet in 2002. (See Table 3.4.) Russia and the United States were the largest producers, with Russia accounting for 21 trillion cubic feet and the United States producing 19 trillion cubic feet.

World Consumption

World consumption of natural gas has increased steadily since 1980, from 52.9 trillion cubic feet to 92.1 trillion cubic feet in 2002. The United States consumed the largest amount of natural gas in 2002, followed by Russia. (See Figure 3.12.) Combined, they accounted for 41% of world consumption.

FUTURE TRENDS IN THE GAS INDUSTRY

In its 2004 publication Annual Energy Outlook 2004, the EIA projects energy supply, demand, and prices through 2025, predicting that natural gas production will increase steadily, as will consumption, pipeline expansion, and imports. Natural gas prices for residential customers are projected to rise by 9% from 2002 to 2025.

Domestic Production

Total domestic natural gas production is projected to increase from 2002 levels of 19.1 trillion cubic feet to 24 trillion cubic feet in 2025, with an annual growth rate of about 1%. Domestic production will be boosted by increases from onshore sources in the lower forty-eight states, slight offshore sources in the Gulf of Mexico, and significant increases resulting from the advent of North Slope gas pipeline operations in Alaska around 2018.

Figure 3.13 shows projected figures for different types of natural gas production. The letters "NA" and "AD" in Figure 3.13 stand for nonassociated (NA) and associated-dissolved (AD) natural gas. These terms refer to natural gas that is found in conjunction with crude oil (associated) or not in conjunction with crude oil (nonassociated). Associated-dissolved natural gas is found in a dissolved state with the oil, like oxygen dissolved in aquarium water. Unconventional sources of natural gas are those from which it is more difficult and less economically sound to extract natural gas because the technology to reach it has not been developed fully or is too expensive.

Domestic Consumption

The Annual Energy Outlook 2004 projects that consumption of natural gas will outpace production from 2002 to 2025. Total domestic natural gas consumption is projected to increase from 2002 levels of 22.8 trillion cubic

TABLE 3.3

FIGURE 3.11

feet to 31.4 trillion cubic feet in 2025, with an annual growth rate of 1.4%. Demand for natural gas by industrial consumers is expected to account for approximately 33% of total consumption in 2025, electricity producers 30%, residential 19%, and commercial 13%. (See Figure 3.14.) Natural gas will be called upon to replace the nation's aging nuclear electricity plants because of its efficiency and low emissions. To meet growing demand, natural gas pipeline capacity will have to be expanded, particularly along the corridors that move Canadian supplies to the Pacific Coast and the corridors that move Pacific Coast Canadian imports and Gulf of Mexico offshore natural gas to the East. A new pipeline from the North Slope in Alaska is expected to be constructed well before 2025.

Imports and Exports

Net imports of natural gas are projected to increase to meet demand, from 3.5 trillion cubic feet in 2002 to 7.2 trillion cubic feet in 2025. Most of these imports will come from Canada. (See Figure 3.15.) The rest will be shipped to the United States from Algeria, Australia, Indonesia, Nigeria, Oman, Qatar, Trinidad, and the United Arab Emirates in the form of liquefied natural gas. Natural gas exports to Mexico are expected to continue and to peak in 2006 (shown as an import minus value in Figure 3.15.) After that time exports to Mexico are expected to decline; Mexico's own natural gas infrastructure should be developed by 2015, and it is expected to begin meeting its own natural gas needs.

TABLE 3.4

FIGURE 3.12

FIGURE 3.13

FIGURE 3.14

FIGURE 3.15

Natural Gas

History

Formation and composition of natural gas

Use of natural gas

Liquefied natural gas

Resources

Natural gas, sometimes just called gas, is a gaseous fossil fuel that is usually found along with petroleum deposits but can also be found alone in natural gas deposits within the crust of Earth. It is a mixture of hydrocarbons (molecules that contain only carbon and hydrogen) and gases. Its usual composition is 85% methane (CH₄), around 10% of ethane (C₂H₆), and 5% or less of butane (C₄H₁₀), propane (C₃H₈), pentane (C₅H₁₂), other alkanes, and impurities, which exist naturally in rocks beneath the surface of Earth. Other gases such as oxygen, argon, and carbon dioxide make up the rest of most natural gas sources.

It is widely used as a heating source, and in some cases specific portions of the natural gas are used as starting materials in industrial processes. In fact, natural gas is an indispensable energy resource throughout most of the industrialized world. In American homes, natural gas is used in furnaces, stoves, water heaters, clothes dryers, and other appliances. The fuel also supplies energy for numerous industrial processes and provides raw materials for making many products that Americans use every day.

Natural gas is the product of the decaying of living matter over millions of years (as is also true for petroleum). Specific conditions (including low oxygen levels) are necessary for this to occur. The hydrocarbon gases are trapped in geological formations known as anticlines. Each of the major hydrocarbon components of natural gas is used as a fuel source.

History

The Chinese were the first people known to have discovered and used natural gas. As early as 940 BC, they found gas underground and piped it through hollow bamboo poles to the seashore, where they burned it to boil off ocean water and collect the leftover salt. By 615 BC, the Japanese were producing gas from similar wells. Other ancient civilizations may have accidentally discovered natural gas seeping up from the ground. When they learned that the gas would burn continuously, they built temples to house mysterious eternal fires. People traveled from faraway lands to visit these temples and marvel at this supernatural phenomenon.

In colonial North America, several natural gas seepages were discovered when they were accidentally set on fire. In the 1770s, French missionaries reported “pillars of fire” in the Ohio River valley, and George Washington, the first U.S. president, described in

wondering terms a “burning spring” on the banks of a river in West Virginia. Most scientists believe that natural gas was created by the same forces that formed petroleum, another fossil fuel.

In 1821, American gunsmith William Aaron Hart drilled the first natural gas well in the United States. It was covered with a large barrel, and the gas was directed through wooden pipes that were replaced a few years later with lead pipe. Although the well was only 27 feet (8.2 meters) deep, it produced enough gas to illuminate nearby houses and stores in Fredonia, New York. Through the 1830s and 1840s, a few other gas wells were drilled in New York, Pennsylvania, and West Virginia. The first company to distribute and sell natural gas was established in Fredonia in 1865. However, by then, oil had been discovered near Titusville, Pennsylvania, and in the oil rush that followed, natural gas was practically forgotten. In addition, about 300 companies were already selling manufactured gas, which was made from coal or oil. Gas lighting systems that burned manufactured gas had been established in many cities long before natural gas was discovered.

For many years, natural gas was used only in places that happened to be near gas wells, mainly because early pipes were unable to transport it much farther. In some towns that used natural gas for street lighting, the lights were left on during the day because it cost more to turn them off than it did to burn the gas. When new wells produced gas along with oil, the gas was usually just burned off, or flared.

In the late 1800s, the introduction of electric lighting nearly killed off the gas industry. However, customers of manufactured gas continued to use the fuel for cooking and heating, so gas companies never completely died out. Gradually, the natural gas industry began to recover as pipeline technology was improved and as larger quantities of natural gas were discovered. The first long-distance pipeline—only about

25 miles (40.2 km) long and less than one foot (30 m) in diameter—was built in the early 1870s to serve Rochester, New York. It was made of pine logs with holes bored through them. Iron pipe was also tested at that time in a 5.5 mile (8.8 km) pipeline serving 250 customers in Titusville, Pennsylvania, but for decades pipelines remained relatively short in length and small in diameter.

Then, in the early 1900s, huge amounts of natural gas were found in Texas and Oklahoma, and in the 1920s modern seamless steel pipe was introduced. The strength of this new pipe, which could be electrically welded into long sections, allowed gas to be carried under higher pressures and thus in greater quantities. For the first time, natural gas transportation became profitable, and the American pipeline network grew rapidly through the 1930s and 1940s. By 1950, almost 300,000 miles (482,700 km) of gas pipelines had been laid—a length greater than that used to pipe oil. Soon it became routine for natural gas to be transported over distances of several hundred miles to the major centers of population and industry. As natural gas became available at prices lower than manufactured gas, customers switched to the cheaper fuel and consumption of natural gas increased phenomenally. Despite the loss of the lighting market, natural gas emerged as the most important heating and cooking fuel, and it gradually increased its share of the industrial market as well. Between 1940 and 1955, production of natural gas in the United States multiplied more than threefold. Today, natural gas now supplies more than one-fourth of all energy consumed in the United States.

In western Europe, however, the use of natural gas was virtually unknown until after World War II, when gas fields began to be developed in France and the Netherlands in the 1950s and in the North Sea, by England and Norway, in the 1960s. An American company came up with the idea of exporting natural gas to Europe by liquefying it at very cold temperatures and shipping it. In 1959, the first cargo of liquefied natural gas (LNG) crossed the Atlantic and was delivered to a specially built terminal in England.

Despite the huge amounts of natural gas that have been produced and consumed, new discoveries have continued to increase gas reserves—the amount of gas that is potentially recoverable. Exploring for natural gas is a complex process that demands the skills of geologists, physicists, chemists, and engineers. Once the right clues have been found above ground, surveyors map the area and samples of surface rocks are closely examined. Then, underground structures are explored from the surface by means of instruments that identify rock layers from sound waves (seismographs) or from changes in gravity and magnetism (gravity meters and magnetometers). Still, no above-ground technique can prove the presence of gas, and an expensive well must be drilled for confirmation. On land, wells typically cost about $500,000. Unusually deep wells, and offshore wells drilled in water, cost much more.

Formation and composition of natural gas

Natural gas has its origins in decayed living matter, most likely as the result of the action of bacteria upon dead animal and plant material. In order for most bacteria to effectively break down organic matter to hydrocarbons, there must be low levels of oxygen present. This would mean that the decaying matter was buried (most likely under water) before it could be completely degraded to carbon dioxide and water. Conditions such as this are likely to have been met in coastal areas where sedimentary rocks and marine bacteria are common. The actions of heat and pressure along with bacteria produced a mixture of hydrocarbons. The smaller molecules which exist as gases were then either trapped in porous rocks or in underground reservoirs where they formed sources of hydrocarbon fuels.

The exact composition of different sources of natural gas varies slightly, but in all cases, methane is by far the most common component, with other hydrocarbons also being very common. The largest sources of natural gas in the United States are found in Alaska, Texas, Oklahoma, western Pennsylvania, and Ohio. It is estimated that the supply of natural gas in this country may be sufficient to last for two centuries, although the more readily accessible sources have been used, meaning that it will be more expensive to obtain natural gas in the future.

Use of natural gas

As the technology for piping gas from the source began to improve, it became possible to pipe natural gas over thousands of miles. This has meant that natural gas has become as convenient as petroleum and coal to use as a fuel source, and often with far less pollution. Natural gas burns with almost no byproducts except for carbon dioxide and water (as opposed to coal that often has large amounts of sulfur in it), and the heat released from the reaction (combustion of any of the hydrocarbon components of natural gas is an exothermic process). The combustion of methane, the most prevalent component of natural gas, is described by the reaction below:

CH₄ + O₂ → CO₂ + H₂O + heat energy

Ethane is used less as fuel source than as a starting material for the production of ethylele (acetylene), which is used in welding.

Both butane and propane are relatively easy to liquefy and store. Liquefied propane and butane are used in disposable lighters and as camping fuels.

Liquefied natural gas

Since gases take up large amounts of space, they can be inconvenient to transport and store. The ability to liquefy the components of natural gas (either as a mixture or in isolation) has made natural gas much more practical as an energy source. The liquefaction of natural gas takes advantage of the different boiling points of methane, ethane, and other gases as a way of purifying each substance. A combination of refrigeration and increased pressure allows the individual

Key Terms

Anticline —An upward fold in a geological formation that traps gases.

Combustion reaction —A form of oxidation that occurs so rapidly that noticeable heat and light are produced.

Exothermic reaction —A chemical process that releases heat (hydrocarbon combustion reactions are exothermic).

Fossil fuel —A fuel that is derived from the decay of plant or animal life; coal, oil, and natural gas are the fossil fuels.

Hydrocarbon —Compound made from atoms of hydrogen and carbon. Methane (CH₄) and propane (C₃H₈) are simple, gaseous hydrocarbons. Oil can vary from tar to very light liquid hydrocarbon to natural gas.

gases to be stored and transported conveniently. At one time, the natural gas that often accompanied petroleum in the ground was simply burned off as a means of getting rid of it. Recently, however, this gas has been collected, liquefied and used along with the petroleum.

Resources

BOOKS

Darley, Julian. Standard High Noon for Natural Gas: The New Energy Crisis. White River Junction, VT: Chelsea Green Publishing Company, 2004.

Lyons, William C., and Gary S. Plisga, eds. Standard Handbook of Petroleum and Natural Gas Engineering. Amsterdam, Netherlands, and Boston, MA: Elsevier, 2005.

Seddon, Duncan. Gas Usage and Value: The Technology and Economics of Natural Gas Use in the Process Industries. Tulsa, OK: PennWell, 2006.

PERIODICALS

“Effect Of Heating And Power Plants On The Environment.” Atomic Energy 92, no. 6-6 (2002): 523-528.

“Thermodynamic Research Improves Energy Measurement In Natural Gas.” International Journal Of Thermophysics 23, no. 4 (2002).

OTHER

NaturalGas.org. “Homepage of NaturalGas.org.” <http://www.naturalgas.org/> (accessed October 18, 2006).

Louis Gotlib

Natural Gas

Background

Natural gas is a mixture of combustible gases formed underground by the decomposition of organic materials in plant and animal. It is usually found in areas where oil is present, although there are several large underground reservoirs of natural gas where there is little or no oil. Natural gas is widely used for heating and cooking, as well as for a variety of industrial applications.

History

Natural gas was known to early man in the form of seepages from rocks and springs. Sometimes, lightning or other sources of ignition would cause these gas seepages to burn, giving rise to stories of fire issuing from the ground. In about 900 b.c. natural gas was drawn from wells in China. The gas was burned, and the heat was used to evaporate seawater in order to produce salt. By the first century, the Chinese had developed more advanced techniques for tapping underground reservoirs of natural gas, which allowed them to drill wells as deep as 4,800 ft (1,460 m) in soft soil. They used metal drilling bits inserted through sections of hollowed-out bamboo pipes to reach the gas and bring it to the surface.

The Romans also knew about natural gas, and Julius Caesar was supposed to have witnessed a "burning spring" near Grenoble, France. Religious temples in early Russia were built around places where burning natural gas seepages formed "eternal flames."

In the United States, the first intentional use of natural gas occurred in 1821 when William Hart drilled a well to tap a shallow gas pocket along the bank of Canadaway Creek near Fredonia, New York. He piped the gas through hollowed logs to a nearby building where he burned it for illumination. In 1865, the Fredonia Gas, Light, and Waterworks Company became the first natural gas company in the United States. The first long-distance gas pipeline ran 25 mi (40 km) from a gas field to Rochester, New York, in 1872. It too used hollowed logs for pipes. The development of the Bunsen burner by Robert Bunsen in 1885 led to an interest in using natural gas as a source of heating and cooking, in addition to its use for lighting. In 1891, a high-pressure gas deposit was tapped in central Indiana, and a 120 mi (192 km) pipeline was built to bring the gas to Chicago, Illinois.

Despite these early efforts, the lack of a good distribution system for natural gas limited its use to local areas where the gas was found. Most of the gas that came to the surface as part of oil drilling in more remote areas was simply vented to the atmosphere or burned off in giant flares that illuminated the oil fields day and night. By the 1910s, oil companies realized that this practice was costing them potential profits and they began an aggressive program to install gas pipelines to large metropolitan areas across the United States. It wasn't until after World War II that this pipeline program had reached enough cities and towns to make natural gas an attractive alternative to electricity and coal.

By 2000, there were over 600 natural gas processing plants in the United States connected to more than 300,000 mi (480,000 km) of main transportation pipelines. Worldwide, there are also significant deposits of natural gas in the former Soviet Union, Canada, China, and the Arabian Gulf countries of the Middle East.

Raw Materials

Raw natural gas is composed of several gases. The main component is methane. Other components include ethane, propane, butane, and many other combustible hydrocarbons. Raw natural gas may also contain water vapor, hydrogen sulfide, carbon dioxide, nitrogen, and helium.

During processing, many of these components may be removed. Some—such as ethane, propane, butane, hydrogen sulfide, and helium—may be partially or completely removed to be processed and sold as separate commodities. Other components—such as water vapor, carbon dioxide, and nitrogen—may be removed to improve the quality of the natural gas or to make it easier to move the gas over great distances through pipelines.

The resulting processed natural gas contains mostly methane and ethane, although there is no such thing as a "typical" natural gas. Certain other components may be added to the processed gas to give it special qualities. For example, a chemical known as mercaptan is added to give the gas a distinctive odor that warns people of a leak.

The Manufacturing Process

The methods used to extract, process, transport, store, and distribute natural gas depend on the location and composition of the raw gas and the location and application of the gas by the end users. Here is a typical sequence of operations used to produce natural gas for home heating and cooking use.

Extracting

• 1 Some underground natural gas reservoirs are under enough internal pressure that the gas can flow up the well and reach Earth's surface without additional help. However, most wells require a pump to bring the gas (and oil, if it is present) to the surface. The most common pump has a long rod attached to a piston deep in the well. The rod is alternately pulled upward and plunged back into the well by a beam that slowly rocks up and down on top of a vertical support. This configuration is often called a horse head pump because the shape of the pulling mechanism on the end of the rocking beam resembles a horse's head.
• 2 When the raw natural gas reaches the surface, it is separated from any oil that might be present and is piped to a central gas processing plant nearby. Several hundred wells may all feed into the same plant.

Processing

• 3 About 75% of the raw natural gas in the United States comes from underground reservoirs where little or no oil is present. This gas is easier to process than gas from oil wells. Regardless of the source, most raw natural gas contains dirt, sand, and water vapor, which must be removed before further processing to prevent contamination and corrosion of the equipment and pipelines. The dirt and sand are removed with filters or traps near the well. The water vapor is usually removed by passing the gas through a tower filled with granules of a solid desiccant, such as alumina or silica gel, or through a liquid desiccant, such as a glycol. After it has been cleaned and dried, the raw gas may be processed further or it may be sent directly to a compressor station and pumped into a main transportation pipeline.
• 4 If the raw natural gas contains a large amount of heavier hydrocarbon gases, such as propane and butane, these materials are removed to be sold separately. The most common method is to bubble the raw gas up through a tall, closed tower containing a cold absorption oil, similar to kerosene. As the gas comes in contact with the cold oil, the heavier hydrocarbon gases condense into liquids and are trapped in the oil. The lighter hydrocarbon gases, such as methane and ethane, do not condense into liquid and flow out the top of the tower. About 85% of the propane and almost all of the butane and heavier hydrocarbons are trapped this way. The absorption oil is then distilled to remove the trapped hydrocarbons, which are separated into individual components in a fractionation tower.
• 5 At this point, the natural gas contains methane, ethane, and a small amount of propane that wasn't trapped. It may also contain varying amounts of carbon dioxide, hydrogen sulfide, nitrogen, and other materials. A portion of the ethane is sometimes removed to be used as a raw material in various chemical processes. To accomplish this, the water vapor in the gas is further reduced using one of several methods, and the gas is then subjected to repeated compression and expansion cycles to cool the ethane and capture it as a liquid.
• 6 Some natural gas contains a high percentage of carbon dioxide and hydrogen sulfide. These chemicals can react with the remaining water vapor in the gas to form an acid, which can cause corrosion. They are removed by flowing the gas up through a tower while a spray of water mixed with a solvent, such as monoethanolamine, is injected at the top. The solvent reacts with the chemicals, and the solution is drained off the bottom of the tower for further processing.
• 7 Some natural gas also contains a high percentage of nitrogen. Because nitrogen does not burn, it reduces the heating value of the natural gas. After the carbon dioxide and hydrogen sulfide have been removed, the gas goes through a low-temperature distillation process to liquefy and separate the nitrogen. Together, the processes in steps 6 and 7 are sometimes called "upgrading" the gas because the natural gas is now cleaner and will burn hotter.
• 8 If helium gas is to be captured, it is done after the nitrogen is removed. This involves a complex distillation and purification process to isolate the helium from other gases. Natural gas is the primary source of industrial helium in the United States.

Transporting

• 9 Mercaptan is injected into the processed natural gas to give it a distinctive warning odor, and the gas is piped to a compressor station where the pressure is increased to about 200-1,500 psi (1,380-10,350 kPa). The gas is then transported across country through one of several major pipelines installed underground. These pipelines range from 20 to 42 in (51 to 107 cm) in diameter. About every 100 mi (160 km), another compressor boosts the gas pressure to make up for small pressure losses caused by friction between the gas and the pipe walls. This keeps the gas flowing.
• 10 When the pressurized natural gas reaches the vicinity of its final destination, it is sometimes injected back into the ground for storage. Depleted underground gas and oil reservoirs, porous rock layers known as aquifers, or subterranean salt caverns may be used to store the gas. This ensures a ready supply during the colder winter months.

Distributing

• 11 When gas is needed, it is drawn out of underground storage and is transported through pipelines at pressures up to 1,000 psi (6,900 kPa). These pipelines bring the gas into the city or area where it is to be used.
• 12 The pressure is reduced to below 60 psi (410 kPa), and the gas is distributed in underground pipes that run throughout the area. Before the gas is piped into each house or business, the pressure is further reduced to about 0.25 psi (1.7 kPa).

Quality Control

Natural gas burns readily in air and can explode violently if a large quantity is suddenly ignited. Entire buildings have been leveled by powerful blasts resulting from natural gas leaks. In other cases, people have suffocated in closed rooms that slowly filled with natural gas. Because natural gas is odorless, foul-smelling mercaptan is added to the gas so that even a small leak will be immediately noticeable. To protect high-pressure underground gas pipelines, a bright yellow plastic tape is buried in the ground a few feet above the pipeline to warn people who might be digging in the area. That way, they will uncover the tape before they actually strike the pipeline below. Warning signs are also placed at ground level along the entire length of the pipeline as an additional precaution.

The Future

Because natural gas is clean burning, it is being considered as an alternative fuel for motor vehicles. Compressed natural gas (CNG) cars and trucks are already on the road in many areas. Companies using industrial processes that require high temperatures are also turning to natural gas instead of other fuels in order to reduce the air pollution emitted by their plants. This includes companies involved in manufacturing steel, glass, ceramics, cement, paper, chemicals, aluminum, and processed foods.

Where to Learn More

Books

Kroschwitz, Jacqueline I., and Mary Howe-Grant (eds.). "Gas, Natural." In Encyclopedia of Chemical Technology. 4th ed., vol. 12. New York: John Wiley and Sons, Inc., 1993.

Tussing, Arlon R., and Bob Tippee. The Natural Gas Industry: Evolution, Structure, and Economics. 2nd ed. Tulsa, OK: PennWell Publishing, 1995.

Other

Natural Gas Information and Educational Resources. http://www.naturalgas.org (November 1, 2000).

Pacific Gas and Electric Company. "How Our Gas System Works." http://www.pge.com/006_news/006c2gassys.shtml (November 12, 2000).

—ChrisCavette

Natural Gas

Introduction

Natural gas is the cleanest of conventional fossil fuels. When burned, the colorless, odorless gas emits 30% less carbon dioxide (CO₂), the most important anthropogenic (human-caused) greenhouse gas, than does oil, and 45% less CO₂ than coal. Natural gas also releases significantly less particulate matter, nitrogen oxides, and sulfur dioxides (which can cause acid rain) than other fossil fuels. Even so, it accounts for a significant fraction of global greenhouse gas emissions. Nearly 21% of the 31.1 billion tons (28.2 billion metric tons) of CO₂ pumped into the atmosphere by countries around the globe in 2005 came from the consumption and flaring of natural gas.

Natural gas itself—composed primarily of methane, is at least 21 times more potent at heating the planet than CO₂. It also contributes to global warming directly when it escapes from pipelines, wells, and processing facilities; is vented from coal mines for worker safety; or makes its way into the atmosphere because of equipment failure. The natural gas industry is responsible for approximately 15% of anthropogenic methane emissions.

Historical Background and Scientific Foundations

Natural gas and oil are both the product of prolonged heat and pressure acting on the remains of tiny oceanic plants and animals (plankton) that were buried deep under sand, silt, and rock some 200–400 million years ago. Natural gas can also be extracted from coal seams. Coal bed methane is a hazard to working coal miners, as the highly combustible gas can cause underground explosions. Today, it is being considered as a useful energy resource.

Around 500 BC, the Chinese were the first to harness natural gas as fuel, using bamboo to pipe it from seeps in order to boil and desalinate seawater for drinking. However, natural gas was not a widely important source of energy until after World War II (1939–1945), when advances in metallurgy, welding, and pipe rolling allowed for the construction of reliable pipelines and widespread distribution of the gas. New uses in the residential, commercial, and industrial sectors proliferated. Since the 1980s, natural-gas-fired power generation and other gas uses have grown more rapidly than before, in part because natural gas generally has lower investment costs, higher fuel efficiency, better operational flexibility, and lower toxicity than other conventional fossil fuels.

As of 2005, natural gas accounted for about 21% of global primary energy use. Industry—where natural gas is used both as an energy source and as the base ingredient for fertilizer, plastics, fabrics, and other products—is the greatest consumer of natural gas, accounting for 43% of natural gas use across all sectors.

Impacts and Issues

Because natural gas emits the least greenhouse gas per unit of energy among conventional fossil fuels, its expanded use is often favored as an economically practical way to begin reducing human greenhouse-gas emissions and as a bridge to cleaner technologies. For example, replacing coal-fired power plants with gas power plants could approximately halve the amount of CO₂ produced per unit of electricity, and carbon sequestration technologies in the future may help natural gas power become even cleaner.

Hydrogen (H₂), a clean-burning gas that in theory could serve as an emission-free fuel, is currently produced primarily from natural gas. However, more CO₂ is produced by making H₂ from natural gas than by burning the natural gas directly; substituting H₂ for natural gas can make greenhouse sense only if carbon is sequestered at the refinery or if H₂ is consumed in high-efficiency fuel cells rather than being burned. Natural gas can also be a relatively clean way to make some renewable energy sources more reliable by filling power-generation gaps left by intermittent power sources such as wind turbines and solar panels.

WORDS TO KNOW

ACID RAIN: A form of precipitation that is significantly more acidic than neutral water, often produced as the result of industrial processes.

ANTHROPOGENIC: Made by people or resulting from human activities. Usually used in the context of emissions that are produced as a result of human activities.

CARBON SEQUESTRATION: The uptake and storage of carbon. Trees and plants, for example, absorb carbon dioxide, release the oxygen, and store the carbon. Fossil fuels were at one time biomass and continue to store the carbon until burned.

CARCINOGENS: Chemicals that induce, or increase the likelihood of, cancer. Carcinogens may be natural or artificial, and may have a carcinogenic effect in low or high concentrations, depending on the chemistry of the particular substance.

FOSSIL FUELS: Fuels formed by biological processes and transformed into solid or fluid minerals over geological time. Fossil fuels include coal, petroleum, and natural gas. Fossil fuels are non-renewable on the timescale of human civilization, because their natural replenishment would take many millions of years.

GREENHOUSE GASES: Gases that cause Earth to retain more thermal energy by absorbing infrared light emitted by Earth's surface. The most important greenhouse gases are water vapor, carbon dioxide, methane, nitrous oxide, and various artificial chemicals such as chlorofluorocarbons. All but the latter are naturally occurring, but human activity over the last several centuries has significantly increased the amounts of carbon dioxide, methane, and nitrous oxide in Earth's atmosphere, causing global warming and global climate change.

RENEWABLE ENERGY: Energy obtained from sources that are renewed at once, or fairly rapidly, by natural or managed processes that can be expected to continue indefinitely. Wind, sun, wood, crops, and waves can all be sources of renewable energy.

Expanding natural gas extraction to meet new demand carries its own set of problems. The fossil fuel is not an inexhaustible resource and its production will eventually peak. In rich gas fields in Alberta (Canada) and Texas, for example, gas production has remained

relatively stable or declined in recent years, even though the number of gas wells drilled per year has gone up. The decline of domestic production in countries that rely on natural gas is a major issue, as the fuel is costly and energy-intensive to import from overseas as a liquid. However, this method is expected to expand to meet growing global energy needs.

Meanwhile, increasing demand, a decline in the productivity of many conventional natural gas deposits, and a sharp increase in natural gas prices have led companies to pursue unconventional deposits of natural gas, such as tight sands and coal bed methane, that were once considered too costly and difficult to extract. This is primarily occurring in the United States and Canada. Drilling for these types of gases has increased in the Rocky Mountains over the last decade, and the associated latticework of bulldozed well pads and roads, increased heavy truck traffic, and storage ponds (which often contain salty or chemical-laden water) can harm wildlife, livestock, habitat connectivity, and air and water quality. The chemicals in drilling wells, some of them potent carcinogens, may pose health risks to those living in neighboring rural communities. Another form of unconventional natural gas, methane gas hydrate ice found on the ocean floor, is still out of reach, as no safe or economical methods of extraction are yet available. Indeed, this resource may be too dispersed and difficult to access to ever be environmentally and economically feasible.

See Also Energy Contributions; Hydrocarbons; Methane.

BIBLIOGRAPHY

Books

Metz, B., et al, eds. Climate Change 2007: Mitigation of Climate Change: Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. New York: Cambridge University Press, 2007.

Periodicals

Hoffert, Martin I., et al. “Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet.” Science 298 (2002): 981–987.

Maffly, Brian. “Where the Antelope (and the Oil Companies) Play.” High Country News (August 18, 2003).

Pacala, S., and R. Socolow. “Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies.” Science 305 (2004): 968–972.

Web Sites

“Environment: Energy-related Emissions Data & Environmental Analysis.” Energy Information Administration, 2007. <http://www.eia.doe.gov/environment.html> (accessed November 8, 2007).

“Global Anthropogenic Non-CO₂ Greenhouse Gas Emissions: 1990–2020.” U.S. Environmental Protection Agency, 2006. <http://www.epa.gov/nonco2/econ-inv/downloads/GlobalAnthroEmissionsReport.pdf> (accessed November 10, 2007).

“Overview of Natural Gas.” NaturalGas.org, 2004. <http://naturalgas.org/overview.asp> (accessed November 8, 2007).

Sarah Gilman