Fredonia, N.Y., was the site for the nation's first natural gas well in 1821.

Primarily methane, the most basic hydrocarbon, natural gas often is associated with oil in the same geologic formations under land or water. Its primary use has been as a clean-burning fuel or as a petrochemical feedstock necessary for some industrial processes.

When oil was discovered in the U.S. in 1859, large quantities of natural gas also were uncovered. But there was little market for gas at the time, and a lot of it was burned away until possible uses were discovered that led to a quick replacement of manufactured gas than in dominant use. Not until long-distance pipelines were built in the 1930s, however, did natural gas find a broader national market.

Gas was introduced in Washington by a Dayton inventor and businessman, James Crutchett. He moved here in 1846, purchased a house at North Capitol and C Streets, and began lighting his home with gas manufactured from pine wood and called "solar gas" because it produced light that resembled sunshine.

Crutchett convinced Congress to allow him to erect a huge gas lantern on top of the Capitol, which led former Washington Gas Light Co. chairman Donald S. Bittinger to quip several years ago, "This was the first time the gas industry tried to shed light on Congress."

But Crutchett "display a careless attitude toward business matters," Bittinger said in retelling his firm's history, and a group of area businessmen got together and formed the local gas company, the oldest public utility here and the oldest in the nation chartered by Congress.

The group of organizers was headed by Benjamin B. French, chief clerk of the House. In a business assocition that would be unthinkable today in terms of interlocks and separation of private and public interests, French was joined in starting Washington Gas Light in 1848 by the city's mayor and postmaster, William Bradley; a Treasury clerk and later a congressman, William English; a druggist, and a lawyer. The founder of Riggs National Bank was a Washington Gas president in subsequent years, as was John R. McLean, a former owner of The Washington Post.

in the company's early years, nearly all gas was used for lighting. At the turn of the century, a number of customers were cooking with gas, and gas-fired hot water and steam boilers were added about 1915. Gas heating didn't become widespread until the 1930s.

During the years that followed, Washington Gas and its investors prospered, and the utility gained a good reputation among its customers, partly because of quick response to customer problems by a large service department.

Through 1946, Washington Gas was selling a mix of natural and manufactured gas. For many years thereafter, the company sold only natural gas, a decision that skeptics said was foolish because of their expectations that there wasn't enough gas in the ground, Bittinger recalled.

Washington Gas continued to expand because of management's belief that adequate supplies existed. Use of cheap, clean natural gas was promoted, including installation for air conditioning.

That was the situation until 1972, when Washington Gas stopped accepting new customers. Ever since, the local utility's base of business operations has been dwindling gradually along with sources of new natural gas. Consumer rate increase requests have been frequent and most have been approved, to keep the firm viable in an era of declining gas sales and soaring inflation.

Now, in an unprecedented and unexpected development, "nonessential human needs" customers of Washington Gas have been told to cut back sharply on their consumption - at least through next Saturday morning.

Because the bulk of the local firm's sales are to residential and small commercial customers, Washington Gas officers had expected to come through event his bitter winter with adequate supplies, under federal allocation guidelines designed to channel gas in interstate markets to residences, hospitals, nursing homes and small commercial operations as among the top priorities.

That outlook was changed last Friday morning when Columbia Gas Transmission Corp., the principal supplier of natural gas to Washington Gas Light, notified all its customers (distributing utilities) that demand was too heavy throughout its system and that many users would have to reduce consumption.

In an interview conducted after 8 o'clock on a recent evening - evidence of busy days for people in the gas business today - WGL chairman and president Paul E. Reichardt said he sees "no alternative" but to increase federal authority on an emergency basis to "spread the grief" of shortages around the country. President Carter has aksed for such powers in legislation being rushed to the White House yesterday.

This winter's shortage of natural gas - really an absence of adequate gas for delivery int he interstate pipeline system after two decades of declining exploration for new gas - has emphasized what Reichardt labeled an industry credibility gap.

"We've been talking about inadequate supplies for three or four years, but people doubted us" during unusually warm winters when gas supplies were reduced from normal levels, and there was enough to serve all but the largest "interruptable" customers - companies and institutions with readily available alternate fuel sources.

"We've been crying wolf and now the wolf is at the door. Here he is," said the WGL executive.

LIke other leaders of the natural gas industry - which is segmented into producers, pipeline and distributing utilities such as Washington Gas - Reichcardt favors ending federal price controls as the best method of increasing the incentive for more gas exploration and drilling.

The price at the wellhead, recently tripled to $1.42 a thousand cubic feet for new gas by the federal Power Commission, amounts to about 20 per cent of overall consumer costs, Reichardt said. If price controls are lifted and the wellhead price increaed, the Utilmate impact on consumers' bills would be annual increases of between 6 and 7 per cent, reflecting a "mix" of new and old gas, Reichardt estimated.

If price controls are retained, supplies will decline and customers will have to start converting to other energy sources at $1,500 to $2,000 per residence, he added.

In recent years, Washington Gas has not been waiting for its pipeline suppliers to come up with new gas. On its own, the local utility has been drilling for gas in West Virginia, Louisiana and other states. Starting this week or next, the local firm will being receiving shipments of gas discovered in Louisiana, for example.