NASA tests a methane-powered engine:
Why is this promising? Glad you asked:
Methane (CH4), the principal component of natural gas, is abundant in the outer solar system. It can be harvested from Mars, Titan, Jupiter, and many other planets and moons. With fuel waiting at the destination, a rocket leaving Earth wouldn't have to carry so much propellant, reducing the cost of a mission.
Perhaps surprisingly, this flammable gas has never powered a spacecraft before. But now scientists and engineers at Marshall, the Glenn Research Center and the Johnson Space Center are developing LOX/methane engines as an option for the future. "Several efforts are underway, including a rival LOX/methane main engine design by KT Engineering," notes Tramel...
Consider the following: Liquid hydrogen fuel used by the space shuttle must be stored at a temperature of -252.9°C—only about 20 degrees above absolute zero! Liquid methane, on the other hand, can be stored at the much warmer and more convenient temperature of -161.6°C. That means methane fuel tanks wouldn't need as much insulation, making them lighter and thus cheaper to launch. The tanks could also be smaller, because liquid methane is denser than liquid hydrogen, again saving money and weight.