Energy in the United States: 1635-2000
	Natural Gas
	Natural gas is mostly a mixture of methane, ethane, and propane, with methane making up 73 to 95 percent of the total. Often encountered when drilling for oil, natural gas was once considered mainly a nuisance. When either uses or--more likely today--accessible markets were lacking, it was simply flared (burned off) at the wellhead. Major flaring sites were sometimes the brightest areas visible in nighttime satellite images. Today, however, the gas is mostly reinjected for later use and to enhance oil production.
	The first practical use of natural gas dates to 200 BCE and is attributed, like so many technical developments, to the Chinese. They used it to make salt from brine in gas-fired evaporators, boring shallow wells and conveying the gas to the evaporators via bamboo pipes. Natural gas was used extensively in Europe and North America in the 19th century as a lighting fuel, until the rapid development of electricity beginning in the 1890s ended that era. The development of steel pipelines and related equipment, which allowed large volumes of gas to be easily and safely transported over many miles, launched the modern natural gas industry. The first all-welded pipeline over 200 miles in length was built in 1925, from Louisiana to Texas. U.S. demand for natural gas grew rapidly thereafter, especially following World War II. Residential demand grew fifty-fold between 1906 and 1970.
	The United States had large natural-gas reserves and was essentially self-sufficient in natural gas until the late 1980s, when consumption began to significantly outpace production (Figure 17). Imports rose to make up the difference, nearly all coming by pipeline from Canada, although small volumes were brought by tanker in liquefied form from Algeria and, in recent years, from a few other countries as well. Net imports as a share of consumption more than tripled from 1986 to 2000 (Figure 18).
	Figure 17. Natural Gas Overview
	Figure 18. Net Imports as Share of Consumption
	U.S. natural gas production in 2000 was 19.2 trillion cubic feet, well below the record-high 21.7 trillion cubic feet produced in 1973. Gas well productivity peaked at 435 thousand cubic feet per well per day in 1971, then fell steeply through the mid-1980s before stabilizing. Productivity in 2000 was 150 thousand cubic feet per well per day (Figure 19).
	Figure 19. Natural Gas Well Productivity
	Three States (Texas, Louisiana, and Oklahoma) account for over half of all natural gas produced in the United States. Texas alone produced 6.9 trillion cubic feet in 2000. Advancing drilling technology has made offshore sites more important, and over the last 2 decades about one-fifth of all U.S. production has come from offshore sites.
	For decades, the industrial sector of the economy has been the heaviest user of natural gas (Figure 20). In 2000 industrial entities (including most electric power producers other than utilities) accounted for nearly half of all natural gas consumption, followed by the residential sector, which used another fifth of the total. In recent years, very small amounts of natural gas (about 6 billion cubic feet in 1999) have been reported for use in vehicles.
	Figure 20. Natural Gas Consumption by Sector
	NPP1 = nonutility power producers
	The price of natural gas at the wellhead (i.e., where the gas is produced) was $3.37 per thousand cubic feet in 2000, in real terms (chained 1996 dollars), up 63 percent over the previous year's price but well below the historical high of $3.76 per thousand cubic feet in 1983. In nominal dollars, the 2000 wellhead price was $3.60 per thousand cubic feet.