Natural gas is a commodity used as an energy source. It can be used to heat homes, and to power some vehicles.
Natural gas is priced by the 1000 cubic ft (mcf). The heating value of natural gas sold in interstate pipelines is required to be a minimun of 1000 btu/cu ft. Hence, 1 million btu's is considered the equivalent of an mcf for most purposes. However, when converted to the measured energy content of a given lot of gas, the resulting number is a therm. Hence, if the measured heat of combustion of the gas is 1090 btu/cu ft, the 1 mcf becomes 1.09 therms.
The major ingredient in natural gas is methane. Its heat of combustion is slightly below the 1000 btu/cu ft requirement. Hence, natural gas sold in interstate commerce normally contains traces of ethane or sometimes propane to meet energy minimums.
Natural gas as it comes from the well is a colorless, odorless gas. Impurities such as carbon dioxide, sulfides or sometimes nitrogen must be removed to make the gas marketable. Helium is commonly recovered from selected natural gas wells. An odorant, typically methyl mercaptan, a sulfur compound, is added to natural gas to make leaks detectable.
Natural Gas Trading Options
- Natural gas futures on the New York Mercantile Exchange (NYMEX). The price of these futures can be tracked on the NYMEX website.
- Stocks whose businesses is to harvest, ship, or sell natural gas
- Natural gas exchange traded funds such as United States Natural Gas Fund
Related Fool Links
More detailed production maps including coalbed methane and shale gas plays found on the Department of Energy website.
- Natural Gas 2008 Year in Review
- Weekly Natural Gas Storage Report - Typically released 10am every Thursday, this report is the supply side of natural gas equation.