This section provides basic information to municipal elected officials concerning natural gas as it relates to a municipal gas system or local distribution customer (LDC). It is not intended to be an all-inclusive detailed discussion on natural gas. There are a significant number of natural gas topics not discussed in this section.
Natural gas is an energy source used by a large number of Tennessee residents. Natural gas in its refined form is almost 100 percent methane (CH4). In this refined state, the gas is odorless and colorless with a high energy output when it is burned. It is an excellent energy source that burns cleaner than most other fossil fuels.
Providing natural gas to a city is an involved process and, as a result, most small- and medium-size cities rely upon others to assist them in the venture. The process of delivering natural gas to homes begins with natural gas producers withdrawing the gas from the Earth, processors refining the gas, interstate and intrastate pipelines transporting the gas, gas suppliers marketing the gas, financial institutions funding the ventures, companies acting as agents, federal and state regulations controlling the process, and local gas distribution employees maintaining reliable and safe natural gas delivery to end users.
Natural gas is traded on the NYMEX as an energy commodity. Its price has been volatile since deregulation in the late 1980s.