What is Natural Gas?

What is natural gas?

It heats homes and buildings and is also used to cook food. But what is natural gas and where does it come from? Natural gas is both a fossil fuel and renewable energy source.

The fossil fuel version formed millions of years ago, where the remains of plants and animals built up in layers on the surface of the earth, mixing with sand, silt and calcium carbonate. Over long periods of time, the layers became buried under rock, sand and silt. A combination of heat and pressure transformed the material into coal, petroleum and natural gas.

Today’s renewable natural gas is derived from biogenic or other renewable sources such as the emissions captured from landfills, wastewater treatment plants and animal manure, has lower lifecycle C02e emissions, and is pipeline compatible. Renewable electricity, such as wind or solar power, can also produce renewable natural gas by powering an electrolyzer which splits water into hydrogen and oxygen. Once the hydrogen is captured, it can be stored and used or combined with a source of carbon to produce renewable methane.

What are the benefits of natural gas?

The use of natural gas, especially that derived from renewable sources, certainly has an impact on the environment. It promotes the reduction of smog, acid rain and greenhouse gas emissions. Homes which use natural gas can cut carbon emissions in half because of the efficiency of the appliances and delivery of natural gas to them.

Natural gas is an efficient way to heat buildings, water and dryers, and to cook. Used directly, instead of converted into electricity achieves 92% efficiency.

How is natural gas purchased?

Natural gas, much like electricity and other commodities, is able to be bought, sold and traded on the open market. In deregulated states, energy suppliers closely monitor energy prices and purchase natural gas for customers based on current market prices. This gives them the ability to sell natural gas at a locked in, often lower rate, than the utility.

According to the New York Mercantile Exchange (NYMEX), natural gas prices tend to be lower in March and April, making spring an optimal time to consider enrolling in a natural gas plan with a secure and locked in rate. You can check out price plans in your area here.

Who supplies my natural gas?

Depending on where you live, your natural gas is supplied by a utility. In deregulated states, such as Ohio, you have the freedom to shop around for a supplier, like AEP Energy, who can give you the most competitive price. The utility will still provide the same natural gas, reliable service, read your meter, and maintain your lines without any type of interruption. You are simply able to select from a variety of price plans which offer secure fixed rates.

Check out our website to find a price plan that’s right for you! Enroll with AEP Energy and start earning Reward Dollars to redeem in our online AEP Energy Reward Store^SM where you can shop for a host of energy efficient products.

Resources:

https://www.energy.gov/natural-gas

https://www.eia.gov/energyexplained/natural-gas/

https://www.aga.org/natural-gas/renewable/

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