Interestingly, propane is a component of natural gas (along with butane, ethane and mostly methane). Propane is extracted from natural gas and converted into an independent source of energy stored as a liquid. Natural gas is stored as a liquefied natural gas, a compressed natural gas and in its uncompressed form. Both propane and natural gas are used for domestic appliances like cooking, heating water, central heating, etc.
The natural gas pipes network
Natural gas is convenient for people connected to a natural gas pipes network. If your home is close to a natural gas main line, you might be required by local authorities to use natural gas rather than propane. On the other hand, propane is convenient for people not connected to a natural gas pipes network. Another advantage is that unlike natural gas, propane is stored in bulk directly on your property.
Measuring propane and natural gas
Propane is measured in gallons while natural gas is measured in cubic feet. If we stick to cubic feet (which we can use to measure propane in its gas form) and convert them into British Thermal Units (BTUs – used to measure the power delivered by a propane appliance) we find that propane delivers 2.44 times as much energy per cubic foot. Indeed, one cubic foot of propane amounts to 2,516 BTU and one cubic foot of natural gas delivers 1,030 BTU. Concretely, this means that your typical 200,000 BTU/hr furnace uses 194 cubic feet of natural gas per hour, whereas the same appliance will use 79 cubic feet of propane.
Propane is more expensive than natural gas
However, in terms of cost, the US Energy Information Agency prices propane at $24.16 per million BTU and natural gas at $10.65 per million BTU (residential, nominal dollars, 2012). This means that propane is more expensive than natural gas. For example, in December 2011, residential propane prices stood at $2.856 per gallon and natural gas at $9.84 per thousand cubic feet. This means the 200,000 BTU/hr furnace mentioned above would cost you, for an hour, $1.90 to run on natural gas and $6.30 to run on propane.
Natural gas and the environment
Both propane and natural gas are environmentally friendly fuels (they both release very few carbon emissions). Having said this, natural gas is considered a greenhouse gas when released into the atmosphere, which is not the case for propane.