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Glossary of Terms
In the energy industry, a barrel is 42 U.S. gallons. One barrel of crude oil has an energy content of 5.6 million British thermal units (Btu). One barrel of oil will make enough gasoline to drive an average car from Los Angeles to San Francisco and back (a 700-mile round trip at 18 miles per gallon).
BOE, Barrel of Oil Equivalent
A unit of measurement that allows oil, natural gas and other hydrocarbons to be measured on the same scale. A barrel of oil contains about 5.6 million Btu's of energy; 1,000 cubic feet of natural gas usually contains about a million Btu's; therefore 5.6 million Btu's of natural gas are equivalent to one barrel of oil.
Natural gas used as a fuel for the generation of steam or electricity, including the use of natural gas in gas turbines for the generation of electricity.
Btu, British Thermal Unit(s)
The current standard measure of heat energy. It takes one Btu to raise the temperature of one pound of water by one degree Fahrenheit at sea level. For example, it takes about 2,000 BTUs to make a pot of coffee.
Note: The Btu is being phased-out, and will soon be replaced by the "joule." See joule.
A term that refers to the ultimate point of consumption of natural gas, which is usually the flame end of an attachment to a burner for a specific application.
Recovered from natural gas and handled as a liquid under moderate pressure. Its principal uses are to provide needed volatility to gasoline motor fuel; as LP-gas fuel, either alone or in mixtures with propane; and as a feedstock for the manufacture of ethylene and butadiene, key ingredient of synthetic rubber.
Currently the most common unit for measuring heat but soon to be replaced by the joule -- one calorie is equivalent to 4.185 joules. A calorie is the amount of energy required to raise the temperature of one cubic centimetre of water one degree Celsius (formerly called centigrade.)
Natural gas produced with oil from underground reservoirs
The point-of-sale where a local natural gas distribution company receives and measures natural gas from a transmission pipeline.
Natural gas is compressed during transportation and storage to save space. Pipelines have compressing stations installed along the line (one about every 100 miles) to ensure that the gas pressure is maintained while being transported.
CNG, Compressed Natural Gas
Natural gas that has been compressed under high pressure, typically between 2,000 and 3,600 pounds per square inch, and held in a container. The gas expands when released for use as a fuel. Natural gas stored in this manner can be used to fuel motor vehicles.
(also called Lease Condensate)
A liquid mixture consisting primarily of butane, propane, pentane and heavier hydrocarbons fractions, with little or no ethane or methane. Condensate is recovered as a liquid from natural gas. Also called Casinghead gasoline and white oil.
Oil removed from the ground before it is processed
A unit of measurement equal to 10 therms or one million Btu.
Natural gas that can be developed for commercial use, and which is found mixed with oil in naturally occurring underground formations.
The act or process of distributing natural gas from the City Gate to end-users.
Describes the business segment that manufactures, distributes and markets refined products from crude oil. Also, any point in the direction of flow of a liquid or gas from the reference point. See Midstream, Upstream.
An exploration or development well, which is incapable of producing commercial quantities of hydrocarbons.
A hydrocarbon separated out of oil or gas. It exists as a liquid only under very high pressures (800 psi) or at extremely low temperatures (-135°F) and is recovered and transported in either the liquid or gaseous state principally for use as feedstock for ethylene, the most important basic petrochemical produced today.
The reduction in volume and energy content of natural gas resulting from the removal of natural gas liquid constituents.
Gas used as a raw material for its chemical properties to make an end product, such as plastics or fertilizers.
A roughly contiguous grouping of oil and/or gas wells in an identified area.
Refers to a sedimentary bed or series of beds sufficiently alike or distinctive to form an identifiable geological unit.
The process of physically cracking the rock layers of a formation to allow better flow of oil and natural gas into a well. Hydraulic fracturing involves injecting fluids under high pressure into a formation to crack the rock formation that holds the petroleum. A "propping" agent, usually sand or glass beads, is added to the fluid so when the pressure is decreased, the sand or glass beads will "prop" open the fractures. This allows increased flow within a given formation. Hydraulic fracturing can be used on almost any kind of formation
Fuel and Shrinkage
The difference between the amount if gas produced at the wellhead and the gas that enters a pipeline. The losses include those from the separation process and field uses, including fuel, flare gas and plant liquids extraction.
An electrochemical engine with no moving parts that relies on the chemical interaction of hydrogen or natural gas with certain other metals, such as platinum, gold and other electrolytes, to produce electricity. The only by-product of a fuel cell's operation is water.
GRI, Gas Research Institute
An organization sponsored by a number of U.S. gas companies to investigate new sources of supply and new uses (applications) for natural gas for the benefit of gas consumers and general public.
Pipelines and pumping units used to bring oil or gas from production leases by separate lines to a central point, such as a tank farm or a trunk pipeline.
Located in Erath, LA, the Henry Hub is a pipeline interchange and the delivery point for the New York Mercantile Exchange (NYMEX) active natural gas futures contracts. Natural gas from the Gulf of Mexico moves through the Henry Hub onto interstate pipelines serving the Midwest and the Northeast. See Hub, Spot Market.
In addition to the vertical shaft in an oil or gas well, special equipment allows producers to extend horizontal shafts into areas that could not otherwise
A location where several pipelines connect near sources of gas. Also known as a market centre. See Henry Hub, Spot Market.
An extensive group of chemicals that always include the elements hydrogen and carbon. Coal, natural gas, oil, sugar, starches, and plastics are all composed of hydrocarbons.
An energy company, usually in the exploration and production segment of the industry, with no marketing, transportation or refining operations.
A pipeline that transports natural gas across state lines and is subject to both state and federal regulations.
A pipeline that transports gas within one state's boundaries, subject to that state's regulations.
The chemical isomer of butane, it is fractionated from "field grade" butanes or derived by Isomerization (below) of normal butane and produced as a separate product, principally for the manufacture of alkylate, a vital ingredient of high-octane motor gasoline. It has become an increasingly important product used in the production of MTBE (methyl tertiary butyl ether) for use as a high octane oxygenate ingredient in reformulated motor gasoline.
Changing the chemical or physical properties of a compound with a catalyst, while retaining the same percentage composition and molecular weight of the original compound. For example: Isobutane (above) is the liquid form of butane at atmospheric pressure and temperature, conditions where normal butane would turn into a gas vapour.
Named in honor of 19th century British physicist James P. Joule. A joule is now the internationally-preferred unit for measuring all forms of energy. As the transition from the English system of energy measurement to the "SI" international system of units picks up momentum, all energy measurements will be expressed in kilojoules (Kj) and mega joules (Mj). One calorie = 4.187 joules
Gases that have been or can be changed into liquid form. These include butane, butylenes, ethane, ethylene, propane and propylene. See NGL.
LNG, Liquefied Natural Gas
Natural gas reduced to minus 260 degrees Fahrenheit, where it becomes a liquid and its volume is reduced 600 times.
LPG, Liquefied Petroleum Gas
Ethane, ethylene, propane, propylene, normal butane, butylenes and Isobutane produced at refineries or natural gas processing plants, including plants that further fractionate natural gas liquids. LPG or propane is commonly used as a fuel for rural homes for space and water heating, as a fuel for barbecues and recreational vehicles, and as a transportation fuel.
LDC, Local Distribution Company
A state-regulated utility that distributes natural gas to residential, commercial and industrial customers.
One thousand cubic feet of natural gas, having an approximate energy value of one million Btu (MMBtu). A typical home might use six Mcf of natural gas in a month.
Million barrels of oil.
One million British thermal units
Million cubic feet. Often used to describe a well's production per day as MMcf/d.
A chemical odorant injected into natural gas distribution pipelines and natural gas liquids intended for sale to consumers as a safety measure to give natural gas vapours a distinctive odor and help detect leaks.
Merchant Power Plant
A non-utility electric generation plant, built with no energy sales contracts in place, which will compete in the deregulated electricity market to generate low cost power for sale to a local power grid.
The simplest of hydrocarbons, pure methane is an odorless, flammable and invisible gas and the primary ingredient of natural gas.
The energy business segment that gathers oil and gas production from individual wells (upstream), then treats or processes that production for sale to gas pipeline transportation companies or (downstream) refiners and petrochemical plants.
MTBE, Methyl Tertiary Butyl Ether
An additive that adds oxygen molecules to gasoline for more complete combustion resulting in lower tailpipe emissions. MTBE is used in unleaded gasoline up to a level of 15 percent. It is one of the primary ingredients in reformulated gasoline (RFG). See RFG.
Zones within a well at different depths, with each zone isolated and perforated to increase the rate of production or the amount of recoverable petroleum.
A mixture of hydrocarbon compounds and small quantities of various non-hydrocarbons. It exists in the gaseous phase or in solution with crude oil in natural underground reservoirs. The principal hydrocarbon is methane with varying quantities of ethane, propane, butanes and natural gasoline.
Gas that contains very low amounts of natural gas liquids
Gas found in its natural state, containing such large amounts of Sulfur as to make it impractical to use without purifying, because of its corrosive effect on piping and equipment and its threat to human and animal health.
Gas found in its natural state containing such small amounts of Sulfur that it could be used without purifying, with any deleterious effect on piping and equipment.
Unprocessed natural gas or partially processed natural gas produced from geological strata containing condensable hydrocarbons. Also gas rich in natural gas liquids.
A liquid mixture of pentanes and heavier hydrocarbons, with small amounts of butane and Isobutane. It is principally for use as a motor fuel component suitable for blending with ordinary oil-derived gasoline.
NGL, Natural Gas Liquids
Those gas stream hydrocarbons, which are separated and recovered at a natural gas processing plant or cycling plant. Generally, natural gas liquids include ethane, propane, butane, or natural gasoline’s (a mix of pentane and heavier hydrocarbons). Approximately 85% of total U.S. natural gas liquids production is consumed in three major uses: petrochemical feedstock’s; motor gasoline manufacture; and residential and commercial heating. The remainder is used in a wide variety of applications, including engine fuels, industrial fuels, utility peak shaving, crop drying, and other agricultural and process fuel applications. Natural gas liquids provide about 70 percent of the feedstock’s for production of ethylene, the most important basic petrochemical produced. In addition, approximately 10 percent of U.S. motor gasoline additives are derived from natural gas liquids.
A rating scale used to grade gasoline's antiknock properties. A colour less liquid found in petroleum.
A chemical compound, typically a mixture of mercaptans and methyl sulphates, injected into local distribution systems as a safety measure to give natural gas a distinctive odor and help detect leaks. See Mercaptan.
A term used in the petroleum industry to denote octane components containing hydrogen, carbon and oxygen in their molecular structure. Oxygenates include ethers such as MTBE and ETBE and alcohols such as ethanol or methanol. The oxygenate is a prime ingredient in reformulated gasoline where its increased oxygen content promotes more complete combustion, thereby reducing tailpipe emissions.
A colourless, flammable natural gas liquid. Normal (liquid) pentane is used as an anaesthetic and cleaning fluid. Isopentane (liquid) is a solvent, also used to make polystyrene foam. Neopentane gas is used in the manufacture of synthetic rubber.
Parts per million.
A facility generally located at the terminus of a gathering system and designed to recover natural gas liquids from a stream of natural gas. NGLs such as propane, butane, ethane and natural gasoline are commonly extracted from the gas stream. Another function of natural gas processing is to control the quality of the processed natural gas stream.
A widely-used natural gas liquid. Its principal uses include feedstock for production of ethylene and propylene, and as LP-gas for heating fuel, motor fuel and industrial fuel. Propane is present in most natural gas and is the first product refined from crude oil.
A company's working inventory of natural gas, oil, natural gas liquids or condensate that have already been discovered and are readily available for production and delivery. Proven reserve volumes are calculated after analysis of geologic and engineering data and reflect a reasonable certainty that these volumes are recoverable in future years from known reservoirs under existing economic and operating conditions.
Pounds per square inch
One quadrillion (1,000,000,000,000,000) British thermal units (Btu), roughly equivalent to one trillion cubic feet of natural gas (1 Tcf) or 170 million barrels of oil. Total U.S. consumption of all forms of energy is about 83 quads in an average year.
A cleaner-burning gasoline that has had its composition and/or characteristics altered to reduce vehicular emissions of pollutants. See MTBE, oxygenates.
Gas remaining after processing to remove water, impurities and natural gas liquids. Residue gas meets the pipeline industry's specifications for Btu content and physical properties required for transportation in pipelines and eventual sale to end-users.
A porous and permeable underground formation containing producible hydrocarbons (oil and/or gas). Reservoirs are considered proved if economic producibility is supported by actual production or conclusive formation tests, or if economic producibility is supported by other scientific measurements. The area of a gas or oil reservoir considered proved includes: that portion delineated by drilling and defined by gas-oil and/or gas-water contacts, if any; and the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data.
A strip of land, the use of which is acquired for the construction and operation of a pipeline or other facility. It may be owned outright or leased as an easement for a specific purpose.
The reduction in volume of natural gas due to the necessary removal of water vapour, carbon dioxide and natural gas liquids, or to its use as a fuel for pipeline compression engines.
Location-based commerce in the form of contract purchasing whereby commitments by the buyer and seller are of a short duration at a single volume price. The duration of these contracts is typically less than a month, and the complexity of the contracts is significantly less than their traditional market counterparts.
Also, the "Spot Market Price" is the average price of natural gas paid at the regional spot market receipt points or zones as reported by the Natural Gas Clearinghouse (NGC) in Houston, Texas.
A unit of measurement equal to one hundred thousand Btu, commonly used as a measure of the heat energy from burning natural gas (or methane).
3-D, Three Dimensional Seismic
Possibly the most important advancement in exploration technology, three dimensional seismic (3-D) images show the height, width and depth of underground formations which allow producers to look into the earth's crust for promising areas that may yield hydrocarbons. With highly advanced supercomputers, geologists and geophysicists process millions of pieces of data from 3-D surveys to generate a detailed, three-dimensional image of underground structures. They can rotate and slice these models for closer examination, searching for evidence of hydrocarbons.
3-D seismic, drilling has become more precise and the risk of costly dry holes has diminished. The fourth dimension of time (4-D) can be added by comparing separate 3-D surveys of the same area, acquired over a period of time, which may actually show the movement of hydrocarbons within a reservoir.
The total of natural gas transportation volumes and utility sales. Also, all gas volumes delivered.
Underground Gas Storage
The use of sub-surface facilities for storing gas that has been transferred from its original location. The facilities are usually hollowed-out salt domes, natural geological reservoirs (depleted oil or gas fields) or water-bearing sands topped by an impermeable cap rock. There are currently more than 400 underground storage facilities spread across 27 states and Canada, which together can hold more than 3 quads of gas.
The energy business segments that explore for, acquire lease acreage, develop, produce and market crude oil and natural gas.
WACOG, Weighted Average Cost of Gas
The average cost of gas purchased during a given time period, usually a month.
The net wellhead sales price, including the value of natural gas and liquids subsequently removed from the gas, less gathering and compression charges, state production or severance taxes, and/or similar charges.
Wells Development Well
A well producing or expected to produce from an oil or gas reservoir known to be productive
A well drilled in unproved or semi-proved territory.
The popular name for an exploratory well.