Natural Gas Production and Delivery
Natural gas is found underground in layers of rock. Energy companies such as BP-Amoco,
ExxonMobil and Chevron-Texaco drill into the earth to bring the gas to the surface much
in the way they drill for oil. Most of the natural gas used in the United States comes from
domestic sources (83%). Some is imported from Canada and Mexico (15%), and a small
amount is imported from overseas as liquefied natural gas (2%).*

Natural gas is a commodity that is traded on the New York Mercantile Exchange. While
We Energies cannot control the cost, we use several financial tools to purchase natural gas
at the best possible price. Once the natural gas is purchased, We Energies passes the cost
of natural gas on to customers without any markup.

*Source: Energy Information Administration 2003 annual data.

Roll your mouse over the different icons for natural gas production and delivery to learn more.

  1. Liquefied natural gas (LNG) is natural gas that has been condensed into a liquid by
    applying pressures of 20 to 150 pounds per square inch and temperatures between -180
    and -280 degrees Fahrenheit. Liquefying the gas increases its density, which allows it to
    be shipped in refrigerated ships and stored in special facilities that adjust temperature and
    pressure before the gas is added to the pipeline transmission system.
  2. Natural gas wells on land or on platforms in the sea drill into porous rock to pipe gas
    to the surface. In most wells, the pressure of the gas is enough to force it to the surface
    into gathering lines, which link the wells to a central collection point where impurities
    are removed. This collection point is linked to the pipeline transmission system.
  3. The U.S. natural gas pipeline transmission system transports natural gas throughout
    the United States. It is composed of 280,000 miles of 20- to 42-inch steel pipe. The system
    uses pressure to move the gas from production regions to local distribution companies, such
    as We Energies.
  4. Local distribution companies, such as We Energies, take the natural gas from the
    pipeline transmission system at gate stations, where the pressure is reduced before
    distribution through smaller pipes to homes and businesses. Local distribution companies
    also add an odorant at the gate stations to help detect leaks, which keeps customers safe.
  5. Underground storage is used by local distribution companies to ensure natural gas
    availability during times of peak demand. Such storage also is used for economic reasons,
    allowing distribution companies to buy and store gas when prices are low and then use it at
    times when market prices are high. About 20 percent of the natural gas used in the United
    States each winter comes from underground storage facilities.


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