Natural Gas

Have you ever wondered where natural gas comes from? Is it the same as the gas which powers your BBQ? Find out here with Savvy

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on July 27th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Natural gas

Natural gas is a versatile and widely used energy source that plays a crucial role in our everyday lives. From powering our homes and businesses, to fuelling vehicles and generating electricity, natural gas has become an integral part of our modern society. Find out all about it here with Savvy.

What is natural gas, and where does it come from?

Natural gas is a fossil fuel that primarily consists of methane (CH4) along with small amounts of other hydrocarbon compounds. It is formed deep within the Earth's crust over millions of years through the decomposition of organic matter, such as plants and animals, under high pressure and heat.

Once extracted from underground, natural gas is cleaned of impurities and then transported through pipelines to where it can be stored. It is stored in massive tanks or underground storage facilities. It is then distributed to residential, commercial and industrial consumers for use in many ways, including heating, cooking, electricity generation, and as a fuel for vehicles.

Natural gas is not the same as LPG, which is a liquid form of propane and butane gas. However, gas appliances which were made to burn natural gas can also be used with LPG.

How is natural gas extracted from the ground?

There are several ways that natural gas is extracted from underground:

Natural gas fields

There are underground reservoirs of gas trapped in porous rock formations which are known as natural gas fields. Geologists and geophysicists study rock formations and seismic data to identify potential gas reservoirs. Once a suitable site is identified, drilling operations begin. A drill rig is used to bore a hole deep into the ground until it reaches the targeted gas reservoir. Steel casing is inserted to prevent the well from collapsing, and cement is pumped around the casing to secure it in place. Once the well is completed, often the natural pressure of the gas reservoir below is sufficient to bring the gas to the surface.

Shale gas:

Shale gas is gas that is trapped within sedimentary rock consisting of fine particles of clay, silt and dead organic matter. Over millions of years the dead plants and animals accumulate in layers, where they are heated and pressurised, creating pockets of gas within the crumbly shale rock. This gas is extracted through a process known as hydraulic fracturing or ‘fracking,’ which involves injecting a mixture of water, sand and chemicals down into the rock at high pressure. This process creates fractures or cracks, which allows the gas to escape.

Coal seams:

Methane gas can also be found in coal seams, and it is extracted during the coal mining process. A deep well is drilled into the coal seam, and through this well any water laying on top of the coal seam is extracted. Once the pressure of the water is reduced, the gas naturally seeps out through the coal and is collected by the gas rig. It is then cleaned to remove any impurities (such as water vapour) and transported through pipelines to storage facilities.

Is natural gas a renewable or non-renewable resource?

Natural gas is not a renewable resource. It is considered a non-renewable resource because it cannot be replaced once it is used up. Natural gas is formed over millions of years from the remains of plants and animals buried deep underground. Once we extract and use natural gas, it cannot quickly be replenished.

However, while natural gas is not renewable, it is considered cleaner than other fossil fuels like coal and oil. Compared to coal, natural gas produces significantly less carbon dioxide (CO2) emissions when burned for energy generation. On average, natural gas emits about half the amount of CO2 per unit of energy produced compared to coal. This is because natural gas primarily consists of methane, which has a higher energy content and burns more efficiently than coal.

What is renewable ‘clean’ gas?

Renewable or green gas may sound like an oxymoron, or a contradiction in terms, since natural gas is not a renewable resource. However, there are ways of manufacturing natural gas which have far less impact on the environment and produce far less carbon dioxide, which is the main culprit for global warming.

The two most promising methods of producing green gas are:

Renewable hydrogen

Hydrogen, the simplest and most abundant element in the universe, can be separated from water molecules to produce renewable hydrogen gas. It shares similar characteristics with LPG and natural gas, being colourless and odorless in its normal state. Renewable hydrogen is highly flammable like other form of gas, and can be used for cooking, heating homes, powering vehicles, and generating electricity. When burned, it only produces water vapor and heat energy, without any carbon emissions. Blending renewable gas with natural gas is an initial step in reducing carbon emissions, and the cost of producing renewable hydrogen is decreasing as more hydrogen plants come online.


Biomethane is another form of renewable gas which is obtained by capturing gas released during the natural decomposition process of organic waste in landfills, agricultural processes, and wastewater treatment facilities. This captured gas is cleaned to remove impurities, resulting in high-quality biomethane. It can be used as a substitute for natural gas in heating, cooking, electricity generation, and fuelling vehicles. Biomethane offers the advantage of using organic waste to produce a renewable fuel source.

Why does gas smell so awful?

Natural gas itself is odorless and colourless. However, a foul-smelling substance called ethyl mercaptan (or ethanethiol) is added to natural gas to give it a distinct, unpleasant smell. This substance is said to be one of the worst-smelling substances in the world. The purpose of adding this strong odorant is to ensure safety wherever gas is being transported or used.

The smell of natural gas is deliberately made to be strong and easily detectable simply because natural gas is highly flammable. If there is a gas leak, the odorant allows people to quickly notice and identify the presence of gas, even in minute quantities of as little as 25 parts per million. Dogs are highly sensitive to the smell of mercaptan, and can detect it in even smaller quantities. The strong smell of mercaptan is vitally important for the early detection of gas leaks so that prompt action can be taken to prevent potential catastrophes such as fires or explosions.

What should I do if I smell gas?

If you are at home, in a caravan or confined space:

  • Turn off all appliances, pilot lights, and any other sources of ignition immediately
  • If possible, shut off the gas at its source by closing the valve on the gas bottle or switching off the mains supply
  • Evacuate the enclosed space without delay and ensure that everyone else and all pets leave safely
  • Once the gas supply is turned off, ventilate the area by opening doors and windows
  • Do not re-enter your home or caravan until the gas odour has completely dissipated

What should I do if I smell gas outdoors?

If you smell gas in the street or outdoors, call 1800 GAS LEAK (1800 427 532) to report the leakage to the Australian Gas Network. The emergency operator you are connected to will give you instructions on what to do next.

Helpful energy guides

Barbeque LPG gas bottle

What Is LPG?

Find out all about the LPG which powers your BBQ or caravan cooking here with Savvy. In Australia white LPG gas bottles fuel hundreds...

Business Loans Banner - Business owners smiling at a tablet in their cafe after receiving a government loan

Small Business Gas Plans 

Compare small business gas plans then switch and save right here with Savvy. Compare energy plans 100% free & takes under 2 minutes Are...

Energy statistics Australia

Gas Plans 

Find and compare gas plans side-by-side using Savvy’s simple online comparison service today.  Compare energy plans 100% free & takes under 2 minutes Looking...

How Do Energy Discounts Work?

How To Reduce Your Gas Bill

Are you wondering how to reduce your gas bill and save money? Find out tips and tricks for reducing your gas consumption here with...

Energy Banner - Woman sitting on the couch with her dog comparing energy plans

Compare Energy Plans 

Compare energy plans from some of Australia’s leading providers all in one place here through Savvy.  Compare energy plans 100% free & takes under...

Types Of Gas

Find out about the different types of gas available for domestic use in Australia here with Savvy.  Many Aussie households rely on gas to...

Energy gas vs electricity

Gas vs Electricity Costs

Have you ever wondered about gas vs electricity costs? Find out which one of these energy sources is cheaper here with Savvy.  When it...

Energy Plans - Compare Energy Plans in Australia

Electricity And Gas Plans 

Compare electricity and gas plans online to potentially save money here through Savvy  Compare energy plans 100% free & takes under 2 minutes When...

Financial Stress

Why Is My Gas Bill So High?

Find out reasons why your gas bill may be so high, and what you can do to reduce the size of your power bills ...

Energy Banner - Young couple looks at their gas bills before switching providers

Switch Gas Providers

Looking to switch gas providers? Compare gas plans and save money here with Savvy today through our 100% free, instant online comparison service. Compare...

Compare energy plans

Whether it's electricity, gas or a solar plan you're after, Savvy can help you compare some of Australia's leading retail energy plans side-by-side. Get started here today! 


Savvy is partnered with Econnex Comparison (CIMET Sales Pty Ltd, ABN 72 620 395 726) to provide readers with a variety of energy plans to compare. We do not compare all retailers in the market, or all plans offered by all retailers. Savvy earns a commission from Econnex each time a customer buys an energy plan via our website. We don’t arrange for products to be purchased directly, as all purchases are conducted via Econnex.

Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an energy plan. For further information on the variety of energy plans compared by Econnex, or how their business works, you can visit their website.