The potential environmental and health problems from the coal burning in Chinese cities like Beijing and Chongqing prompted these cities to turn to natural gas for domestic use. The rationality of using the natural gas from environmental, economic and technical perspective is reviewed. From the case study of Beijing and Chongqing, a cost-benefit analysis of natural gas substitution is described. Economic and system obstacles to natural gas penetration are examined. A natural gas penetration incentive policy is proposed.
