I am using natural gas to heat my gas hot water heater. Can I convert to using propane like from a propane tank used for bbq's?
You may start using propane on your hot water heater. Propane is cheap and efficient compared to to gases. It can also be stored in portable tanks to be used in places beyond gas mains. For more information, visit http://www.propanecouncil.org/council/what-is-propane/.
Yes. You just have to purchase a propane adapter kit for the hot water heater.
I don't think that doing that sort of thing is something that I would advise. You would be much safer to call an expert in heating. However, it can be done by changing the orifice in the heater element.