Butane is a gaseous component of natural gas, much like gasoline is a component of crude oil. While petroleum products like gasoline are refined, natural gas products like butane are extracted. Butane can also be produced from crude oil, but in much smaller quantities. Butane is often added to regular gasoline to boost performance without creating a highly volatile product. Other common uses for butane include refrigeration, heating and fuel for cigarette lighters.

But first, a quick chemistry lesson may be helpful. Butane's chemical formula is C4H10, which means the butane molecule consists of four carbon atoms surrounded by ten hydrogen atoms to form a straight line. Imagine a four-segment carbon caterpillar with ten hydrogen legs to get a visual idea of a butane chain. This form of the colorless gas is technically called n-butane (the n stands for 'normal'). N-butane has a relative called isobutane, which is used primarily as a replacement for the refrigerant freon in refrigerator systems.

Butane is one of dozens of gases derived from raw natural gas. It is often combined with propane to form a new product called LPG, or Liquid Propane Gas. This is the bottled gas sold for use in camping stoves and outdoor gas-powered grills. Propane may deliver more energy than butane, but butane has a certain property that makes it ideal for containment. When butane is compressed, it becomes a liquid very quickly. Once it is released into the air, however, it reacts with an ignition source to become a highly flammable gas. Unlike some other natural gas derivatives, butane only releases carbon dioxide as a waste product, not carbon monoxide.

If you take a close look at a transparent cigarette lighter, you should see evidence of butane in its liquid state. Once the holder depresses a valve, the liquid butane loses its pressure and becomes gaseous again. The flame is similar to a burning candle, because butane is considered a 'paraffin' gas. The liquid form of butane remaining in the lighter is slowly expelled, much like the candle wick only draws enough liquid wax to maintain the flame.