10 Natural Gas Facts for Investors

1. Natural gas is lighter than air

Natural gas is a mixture of methane and other naturally occurring gases; it is lighter than air and needs to be cooled to -260 degrees Fahrenheit before it becomes liquid. Liquefied natural gas, or LNG, takes up significantly less volume, which is useful when transporting the fuel.

2. Natural gas has no odor

Some might be surprised to know that natural gas is completely odorless. In order to allow for the detection of natural gas leaks, companies add the chemical mercaptan, which gives the gas a rotten egg odor.

3. Natural gas and oil occur together

As fossil fuels, crude oil and natural gas are formed via the same geological process. It isn't surprising then that the two materials are often found together. Deposits that are richer in natural gas are referred to as natural gas fields, while those richer in oil are known as oil fields.

4. Natural gas is used in manufacturing

In addition to being used as a fuel for power generation and for heating homes, natural gas is used to manufacture various products. According to the International Energy Agency (IEA), natural gas is a key component in the production of ammonia. It's also used to make products such as vinyl flooring, carpeting, Aspirin and artificial limbs.

5. Natural gas is used as vehicle fuel

Natural gas only fuels a small portion of the vehicles on the road, but these vehicles create fewer emissions than traditional petroleum-based vehicles. Natural gas vehicles are a good choice for centrally fueled, high-mileage fleets.

6. Hydraulic fracturing can cause earthquakes…

Scientists have long known that hydraulic fracturing, or fracking, can cause small earthquakes near drilling and extraction sites. The process uses high-pressure water to fracture shale formations and release the oil and gas inside.

In 2014, Scientific American reported on a study that suggests these liquid injections could be responsible for much farther-reaching and more potentially devastating quakes. However, scientists are still unsure about exactly how larger fracking quakes are caused. "There's urgent scientific research right now which is focused on trying to find better ways to identify these features in advance," David Eaton, a University of Calgary geophysicist, told the Canadian Press.

Further studies have linked hydraulic fracking wells to small earthquakes in Ohio, Pennsylvania, West Virginia, Oklahoma and Texas. "The (fracking) seismic signature when you look at it in a sort of timeline shows these bursts of seismicity, hundreds or sometimes thousands of events over a couple of days or weeks, and then it's quiet again. You don't tend to see that pattern with wastewater disposal," Michael Brudzinski, a seismologist from Miami University in Ohio, explained.

7. …and has been controversial for other reasons too

The potential for earthquakes caused by natural gas fracking is not the only reason that the process draws controversy. It uses a number of industrial chemicals, and opponents fear the contamination of drinking water from these substances.

Critics are also against the amount of water used in fracking operations. For instance, the US Department of Energy notes that drilling and fracturing a horizontal shale gas well usually requires upwards of 4 million gallons of water. On the other hand, the department points out that this amount is small compared to what is used in other industries, such as agriculture. Storing the water or fracturing fluid after extraction is also a contentious issue.

8. However, natural gas is also known as a "clean energy" fuel

Despite being a fossil fuel, another natural gas fact is that the commodity is often pegged as a "cleaner" energy option than coal or oil. According to the EIA, the burning of natural gas for power creates fewer greenhouse gas emissions and pollutants, since it burns more easily and contains fewer impurities than other fossil fuels. The EIA also notes that natural gas produces less carbon dioxide per equivalent amount of heat production.

9. Natural gas demand is growing, both in the US and globally

While natural gas plays a large role in space heating, it is also growing in importance as a fuel for power generation — as mentioned, it has started to beat out coal as the top fuel for power generation in the US.

Even with production growing at a rapid rate in the country (the US shifted from being a net importer to a net exporter of natural gas at the close of 2018), McKinsey & Company argues that there will be plenty of growing demand abroad. According to the firm, natural gas is expected to be the only fossil fuel to experience demand growth through 2035.

10. Natural gas prices are tied to the weather

Last on this natural gas facts list is that natural gas prices can rise or fall depending on the weather — this is because natural gas is used extensively for heating homes. Colder winters can drive up natural gas demand for heating purposes, while unseasonably warm winters can have the opposite effect. Other factors, such as the price of oil and competing energy sources, will also affect natural gas prices.