What natural gas is and where it comes from

Natural gas is mostly methane: one carbon atom, four hydrogen atoms, CH4. The stuff in the pipe also carries smaller amounts of ethane, propane and butane (the natural gas liquids), plus water vapor, carbon dioxide and sometimes nitrogen or hydrogen sulfide. Processing plants strip most of that out before the gas enters a long-distance pipeline. What reaches a power plant or your furnace is close to pure methane with a dash of odorant added by the local utility, because methane itself has no smell.

It formed the same way oil and coal did. Tiny marine organisms and plant matter piled up on sea floors and lake beds, got buried under silt and sand, and over millions to hundreds of millions of years, heat and pressure cooked them. Some became coal, some oil, some gas. EIA's plain summary of this is worth reading once, because people still sometimes claim that gas is "cleaner" in some way that has to do with its origin. It isn't. The origin is the same. The difference shows up at the smokestack and in the leaks, which later lessons cover.

Conventional, shale and tight gas

The gas molecule does not care what rock it sits in. Engineers care a great deal.

Conventional gas has migrated upward out of the source rock and gathered in porous rock (often sandstone or limestone) under a cap of something it cannot pass through. Drill into that trap and the gas flows to the surface on its own pressure. For most of the 20th century this was how the US got its gas.

Shale gas never left home. It is still in the fine-grained shale where it formed, held in pores so small and so poorly connected that a plain vertical well produces a trickle. Tight gas is similar but sits in low-permeability sandstone or limestone. EIA groups these as unconventional. Two other categories round it out: associated gas, which comes up with oil, and coalbed methane, which EIA puts at about 2% of production in 2022.

Type	Where the gas sits	How it is produced	Share of US output
Conventional	Open pores and traps under a seal	Vertical well, flows on its own pressure	Small and shrinking
Shale	Tiny pores in source rock	Horizontal well plus fracking	About 78% (2023, EIA)
Tight sandstone or carbonate	Low-permeability reservoir rock	Usually fracked, often horizontal	Counted with shale in many EIA charts
Coalbed methane	Adsorbed on coal surfaces	Dewater the coal seam, gas releases	About 2% (2022)
Offshore	Gulf of America reservoirs, mostly conventional	Platform wells	About 2.3% (2022)

Horizontal drilling and fracking, step by step

The shale boom came from putting two old techniques together. Neither was new. The combination, refined through the 1990s and 2000s in the Barnett Shale of north Texas, was.

1. Drill down. A rig drills a vertical hole, often 5,000 to 10,000 feet or more, lining it with steel casing cemented in place. The casing and cement are what keep gas and fluids out of shallow groundwater, which is why well integrity is the safety question that matters most here.
2. Turn. Near the target layer, the drill bit is steered in a gradual curve until it runs sideways through the shale.
3. Run the lateral. The horizontal section, called the lateral, can run from a few hundred feet to several miles, per EIA. A shale layer might be only 100 to 300 feet thick, so a vertical well touches very little of it. A two-mile lateral touches a lot.
4. Perforate. Charges punch holes through the casing in stages along the lateral.
5. Fracture. Crews pump water, sand and a small fraction of chemical additives at high pressure, stage by stage. The rock cracks. The sand (proppant) wedges the cracks open.
6. Flow back and produce. Pressure is released, some of the fluid returns to the surface along with briny water from the formation, and gas starts flowing up the well.

By 2016, EIA counted hydraulically fractured horizontal wells at 69% of all oil and gas wells drilled in the US and 83% of the footage. In 2023 shale formations produced about 78% of US dry gas, roughly 29 trillion cubic feet of the 37.65 trillion cubic feet produced. That is the whole reason the US went from planning LNG import terminals in the mid-2000s to being the world's largest LNG exporter in 2023.

Fracking has real local costs, and the evidence on them is better than either side's slogans. EIA, citing the US Geological Survey, notes that fracking itself can cause small earthquakes that are generally not a concern, while injecting large volumes of wastewater underground for disposal can trigger larger, damaging ones. Water use can be heavy in dry regions. Spills and bad well construction can contaminate land and water. The safety lesson later in this module covers well sites in more detail.

Where US gas comes from

Five states produced about 70% of US dry gas in 2022, per EIA:

State	Share of 2022 US production	Main formations
Texas	24.6%	Permian Basin (mostly associated gas from oil wells), Haynesville, Eagle Ford, Barnett
Pennsylvania	21.8%	Marcellus, Utica
Louisiana	9.9%	Haynesville
West Virginia	7.4%	Marcellus, Utica
Oklahoma	6.7%	Woodford, Anadarko Basin plays

The Marcellus, in the Appalachian Basin, is the single biggest shale gas source. The Permian in west Texas and southeast New Mexico is an oil play first, but so much gas comes up with the oil that it is a major gas supplier anyway. That detail matters for prices: Permian gas output depends on oil prices and oil drilling decisions, so gas can keep flowing even when gas prices are low. The Rocky Mountain basins (the Green River in Wyoming, the Piceance and the Uinta among them) feed western pipelines, including the ones that serve the Northwest. Lesson 2 traces that route.

Production trend

EIA's October 2026 Short-Term Energy Outlook gives these annual averages for US dry gas production:

Year	Dry gas production (Bcf/d)	Status
2022	99.33	Record at the time (EIA annual data)
2024	103.07	Actual
2025	107.64	Actual
2026	112.20	Forecast
2027	116.13	Forecast