The major difficulty in the use of natural gas is transportation and storage because of its low density. Natural gas pipelines are economical, but are impractical across oceans. Many existing pipelines in North America are close to reaching their capacity, prompting some politicians representing colder areas to speak publicly of potential shortages.

LNG carriers can be used to transport liquefied natural gas (LNG) across oceans, while tank trucks can carry liquefied or compressed natural gas (CNG) over shorter distances. They may transport natural gas directly to end-users, or to distribution points such as pipelines for further transport. These may have a higher cost, requiring additional facilities for liquefaction or compression at the production point, and then gasification or decompression at end-use facilities or into a pipeline.

In the past, the natural gas which was recovered in the course of recovering petroleum could not be profitably sold, and was simply burned at the oil field (known as flaring). This wasteful practice is now illegal in many countries. Additionally, companies now recognize that value for the gas may be achieved with LNG, CNG, or other transportation methods to end-users in the future. The gas is now re-injected back into the formation for later recovery. This also assists oil pumping by keeping underground pressures higher. In Saudi Arabia, in the late 1970s, a "Master Gas System" was created, ending the need for flaring. Satellite observation unfortunately shows that some large gas-producing countries still use flaring and venting routinely. The natural gas is used to generate electricity and heat for desalination. Similarly, some landfills that also discharge methane gases have been set up to capture the methane and generate electricity.

Natural gas is often stored in underground caverns formed inside depleted gas reservoirs from previous gas wells, salt domes, or in tanks as liquefied natural gas. The gas is injected during periods of low demand and extracted during periods of higher demand. Storage near the ultimate end-users helps to best meet volatile demands, but this may not always be practicable.

With 15 nations accounting for 84% of the world-wide production, access to natural gas has become a significant factor in international economics and politics. In this respect, control over the pipelines is a major strategic factor.

Residential Use

Natural gas is supplied to homes, where it is used for such purposes as cooking in natural gas-powered ranges and/or ovens, natural gas-heated clothes dryers, heating/cooling and central heating. Home or other building heating may include boilers, furnaces, and water heaters. CNG is used in rural homes without connections to piped-in public utility services, or with portable grills. However, due to CNG being less economical than LPG, LPG (Propane) is the dominant source of rural gas.