Energy Sector Commodities: Natural Gas - dummies

Energy Sector Commodities: Natural Gas

By Amine Bouchentouf

If crude oil is the king of commodities, natural gas is sometimes said to be the queen. Although crude oil accounts for about 40 percent of total energy consumed in the United States (the biggest energy market in the world), approximately 25 percent of energy consumption comes from natural gas.

Natural gas is therefore an important source of energy both in the United States and around the world, and it can offer tremendous moneymaking opportunities.

Similar to crude oil and coal, natural gas is a nonrenewable fossil fuel found in large deposits within the earth. As a matter of fact, natural gas is sometimes found not too far away from crude oil deposits. Crude oil is the liquid fossil fuel, coal is the solid one, and natural gas is the gaseous fossil fuel.

People are sometimes confused by the term natural gas because they think (incorrectly) that it refers to the gas (gasoline) they use to fill their tanks. Although natural gas is sometimes used as a transportation fuel, the gasoline you buy at the gas station and natural gas have nothing to do with each other.

The gasoline your car consumes is a product of crude oil, whereas natural gas is an entirely different member of the fossil fuel family, used primarily for heating, cooling, and cooking purposes.

Because of its importance as a source of energy, natural gas makes for a good investment. It’s an important commodity with many applications.