Well, yes they're running on natural gas. A medium duty CNG (compressed natural gas) or LNG (liquified natural gas) engine can be expected to produce something of the order of 10% of the PM and CO, and around 50% NOx as compared with an equivalent Diesel engine.
No, it's not completely clean, and they do have their disadvantages (fuel storage and availability, durability, power density...), but I like them for urban public transport because they're quieter and aren't as smoky as an old clattery Diesel.
The gas is a mixture of gaseous hydrocarbons, but mostly methane (it will also contain fractions of propane, butane, hydrogen, nitrogen, water vapour and probably some hydrogen sulphide). It generally comes from the top of oil fields, but more and more landfill sites and sewage works are capturing the emitted methane to produce electric power; environmental benefits here are from reduction in greenhouse gas emissions, and it's effectively free.
Some forms of personal transport (ie cars and vans) are available with 'dual fuel' systems, and aftermarket kits are available; a CNG or LNG tank in the boot which the driver can switch over to using once the car is running and warm. A main disadvantage is the lower energy density from the fuel, resulting in lower power density of engines. Petroleum and Diesel are incredibly calorific, they're pretty hard to beat, especially with recent advances in Diesel engines yielding fuel economies upward of 60mpg, and with far lower pollution levels as compared with 10-20 years ago. A consequence of the lack of popularity of CNG and LNG is a lack of infrastructure needed to refill automobiles (although in the UK and across Europe this is improving); the scarcity of the fuel on a commercial basis is a negative selling point as far as the average motorist is concerned.