It is common to lump propane gas and natural gas together as being the same type of gas, but there are marked differences. First, natural gas is made entirely of methane, whereas propane is distilled from either natural gas or oil. There are also many other differences between the two types of gas.
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Natural gas is lighter than propane because it is pure methane without any additives. This means that more natural gas can be stored in a tank than propane, since most tanks go by actual weight than volume. Propane, on the other hand works as a liquid and a vapor, and does not compress as easily. Most homes that use propane use the liquid form of propane known as LP.
The cost of natural gas is slightly less than that of propane since it does not need to be refined and added to like propane does. It is also slightly more efficient than propane so heating a home with natural gas is typically cheaper. Estimates put heating a normal sized home at $1,890 a year with natural gas, while propane to heat the same amount of space would cost on average $3,000 or more, at the time of publication. Prices fluctuate throughout the year in the same manner gasoline does.
In cities, natural gas is more readily available than propane. Most city homes that are hooked up to gas lines run on natural gas, not on propane. While there are some exceptions, it is typically a rule that city customers use natural gas, where rural customers use propane. Propane for rural customers is stored in large tanks sized between 500 and 1,000 gallons instead of being fed directly into their homes through pipelines like natural gas is in a city.
Because propane and natural gas are so similar, converting from one type to the other is simple and does not require any additional equipment. For example, if you have a water heater that runs on natural gas, and want to switch to propane, it typically requires a regulator added to the line that feeds into the water heater gas line. The water heater itself will not need to be converted.