Introduction to Natural Gas

The term ‘natural gas’ refers to a common and widespread product of organic decomposition and it is found in varying quantities in nearly every part of the planet. Natural Gas is produced in nature by two distinct methods: (1) organic material is broken down by bacterial decomposition with the by-product of methane (such as in peat bogs, land fills, or the digestive system of cattle), or (2) thermal decomposition where the by-product is both gas and liquids (such as coal or organic- rich sediments being heated up deep within the earth to produce methane, propane, other heavy gases, and oil). Methane gas, which is the largest component of natural gas, appears blue when it is burning. To learn more about the specific formation of this resource, visit this page.

Natural gas accumulations are a common source of clean burning energy throughout the world. In 2010, natural gas consumption increased worldwide by 7.4% to 306 billion cubic feet of gas per day, the strongest growth since 1984. U.S. gas consumption rose 5.6 percent to a record 66 billion cubic feet per day; the gain of an average 3.5 billion cubic feet per day was the largest volume increase of any nation worldwide. The U.S. was also the world's largest natural gas producer for 2009 and 2010, a position which Russia had held for seven years in a row prior to 20091 Natural gas is used and transported in many forms including conventional pipeline distribution of gaseous form, pressurized vessels of liquid propane (LP), and liquefied natural gas (LNG) as a supercooled liquid in unpressurized insulated containers.

In the United States natural gas provides nearly 21 percent of the energy supply, and the US Department of Energy (USDOE) forecasts that this consumption level will climb slowly over the next decade, and then start decreasing through the year 2030 (see figure 2). The USDOE also reports that natural gas will be the energy source for 900 of the next 1000 new power plants being developed in the U.S.

How Natural Gas Energy Works


Figure 2: America's demand for natural gas is
expected to grow as much as 50% by 2025.
Unconventional gas resources, much of which
currently are not economically recoverable, are
expected to bear much of the burden of meeting
this demand. Image: NETL

Natural gas wells link to processing plants, where impurities such as water and carbon dioxide are removed; from these plants, natural gas is transmitted through pipelines (with compressor stations located periodically to boost the pressure of gas moving in the pipeline) directly to power plants and industrial customers, or to local gas companies that provide lines to residential customers and businesses. Local distribution companies inject minute amounts of odorant to the gas before distributing it so that customers can detect leaks before the escaping gas leads to a fire or explosion.

Natural gas is most commonly used for heating and electricity generation on a residential scale.

Flow diagram of a typical natural gas processing plant.

Challenges of Natural Gas

The key challenge for using natural gas as an energy source is our ability to economically collect it in sufficient quantities so that it can be used for heat and power. Unfortunately, the very common bubbles seen in lakes and bogs cannot supply enough fuel for sustained energy production, so it is necessary to find and tap into a place where nature has accumulated it over hundreds of thousands of years by a natural trapping mechanism. The most common forms of natural accumulation are: (1) conventional gas reservoirs in porous rock deep within the earth, (2) thick underground coal seams where the gas is both trapped and adsorbed to the organic material (coalbed methane), and (3) a newly emerging potential natural gas source, hydrates, where the gas molecule under certain pressure and temperature conditions is surrounded and trapped by a crystalline structure of ice.

Natural Gas in Alaska

Cook Inlet, Barrow, Nuiqsut, and parts of Fairbanks are currently the only areas in the state served by natural gas.

However natural gas is used to generate 54% of the electricity being consumed by industry and the public in Alaska. Figure 3 compares the amount of gas being consumed annually in the Anchorage area for residential use and power generation. Clearly, natural gas makes up an important part of the overall energy portfolio of Alaska and will for the foreseeable future. The dominant impediment to increased use of natural gas in other parts of Alaska is the significant cost of exploration and development, or of transportation from areas of large known accumulations to areas where it can be utilized for heat and power by a smaller population base.


Figure 3: Graph showing consumption of Natural
Gas in Alaska for residential and electricity production
for the decade 1997-2007. Data from US Department
of Energy.

This resource has enormous potential in Alaska, with known resources on the North Slope and in the Cook Inlet basin. The U.S. Geological Survey released an assessment of undiscovered, technically recoverable oil and gas resources in the Cook Inlet region of south-central Alaska in June 2011. In this assessment, the USGS estimates that there are about 19 trillion cubic feet (tcf) of natural gas and about 46 million barrels of natural gas liquids that remain to be found in this area (these numbers reflect a mean of the estimates).

Conventional and Unconventional Natural Gas

Besides "conventional" natural gas extraction, the most common extraction of natural gas from reservoirs, there are multiple "unconventional" methods of gas extraction. They are often more difficult and less economical, due to technologies that have not been fully developed, but may become larger players in the natural gas industry in the future upon further research. In Alaska, coalbed methane and methane hydrate are among the "unconventional" resources being researched.




LNG Tanker


During the 1990s, more and more power plants began to use natural gas for electrical generation, increasing the demand for this resource. With this increase in demand, the natural gas industry was pushed to become an innovative leader in technological advancement. Innovative technologies in exploration and production have been able to decrease the environmental impact of drilling and extraction at well sites, increase the useful life of wells, increase the amount of gas that can be extracted from sites, and allow the industry to find new, safer ways to transport and store this resource.


Current Production (US) Over 25 trillion cubic feet annually
Current Production in Alaska North Slope and Cook Inlet, 454 billon cubic feet
Resource Distribution North Slope and Cook Inlet; some exploration potential in other Basins
Number of communities impacted Railbelt and North slope
Technology Readiness Proven exploration and production technology readily available.
Environmental Impact Cleanest burning non-renewable. Exploration activity, production facilities, and pipelines must not adversely affect land and water resources.
Economic Status Currently economic in Anchorage region and minor railbelt
News NETL News
Conclusion and Summary


LNG (Liquefied Natural Gas)

When natural gas is cooled at normal pressure to approximately -260°F, it condenses into a liquid form known as LNG (Liquefied Natural Gas). In the process of liquification, oxygen, carbon dioxide, sulfur, and water are removed from the gas, resulting in almost pure methane; LNG and LNG vapors will not ignite in an unconfined environment. LNG is transported in insulated tankers where it is kept in liquid form by the process of autorefrigeration, a process where LNG is kept at its boiling point and any added heat is countered by energy loss from LNG vapor; this vapor is vented out of the storage vessel and used to power the tanker.2

CNG (Compressed Natural Gas)

Natural gas can be compressed to less than 1% of its volume to create CNG (Compressed Natural Gas), which is stored and distributed at a pressure of 2,900-3,600 psi. CNG burns cleaner than other forms of natural gas, and is easier to mitigate in spills since it disperses so quickly. CNG is currently used in million of modified vehicles worldwide, and the fuel proves to lessen the need for car maintenance since it burns cleaner and easier on vehicle components. Unfortunately, compressed gas requires more storage space than conventional gasoline, but manufacturers have created innovative storage techniques to minimize the amount of trunk or car space the gas cylinders occupy.

NGLs (Natural Gas Liquids)

NGLs (Natural Gas Liquids) are different from LNG in that they appear in liquid form at the surface in field facilities or processing plants without refrigeration. NGLs include propane, butane, pentane, hexane and heptane and are categorized according to their vapor pressure.3 NGL is often found in association with other fossil fuels (such as oil), and can sometimes be dissolved into other products. The process of deriving usable natural gas liquids is quite complex and difficult, and requires large plants to extract and clean the fuel.

GTL (Gas to Liquids)

GTL (Gas-to-liquids) technology is a method of converting natural gas to a hydrocarbon mixture which can be upgraded to petroleum products. The technology dates back to 1923 when German scientists Franz Fischer and Hans Tropsch invented the process (Fischer-Tropsch fuels). This technology can be viewed as an alternative to crude oil refining, because natural gas can be used to create petroleum products such as diesel.

Alaska Specific Technology Challenges


Figure 1: Alaska Energy Authority, Energy Atlas




Current Projects

Past Projects

Proposed Projects

Links and Resources

  • The State of Alaska Dept. of Natural Resources issued a Best Interest Findings document for the North Slope Foothills oil and gas lease sales for 2011-2020 in May 2011. From the executive summary: "The State of Alaska is proposing to offer for lease all available state-owned acreage in North Slope Foothills areawide oil and gas lease sales from 2011-2020 (Map 1.1). The Director of the Alaska Department of Natural Resources (ADNR), Division of Oil and Gas (DO&G), has made a final finding that holding these lease sales is in the best interest of the state."



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