In general, oil makes transportation fuels and natural gas makes electricity. These two fossil fuels complement each other rather than compete. Likewise, alternative energy technologies fall broadly into one of two categories: transportation or power generation.
Coal is used principally for power generation and so competes directly with natural gas. It's a big decision when building a new power plant whether it will be coal-fired or natural gas-fired. More on this later.
Since both oil and gas are fossil fuels, they are both nonrenewable, and burning each discharges greenhouse gases. So, there really isn't a substantial long-term incentive to substitute one for another. This is the perhaps the biggest fallacy with electric cars: the cars don't burn gasoline, but they do require burning natural gas. Owners of electric cars mislead themselves that it's only "clean" energy coming from the electric outlet in their garages.
Still, oil and gas have substantial differences. And, all things considered, natural gas is cleaner and has more potential staying power. Natural gas is a legitimate medium-term solution to replacing crude oil. It's not the final answer, but it is a great bridging step.
