Energy Information Program – Glossary
For more terms relating to pipeline tolls and tariffs, see ‘Pipeline Tolls and Tariffs: A Compendium of Terms’.
Abandonment: Permanently ceasing the operation of a pipeline.
Alkylation: A secondary crude oil refining process which produces alkylate, a very-high octane component used for gasoline blending.
Alternative or Emerging Technologies: New or emerging technologies that are used as an alternative to existing methods of energy production. Alternative technologies include fuel cells and clean coal technologies, for example.
Amortization: The gradual writing-off of an asset or debt over a fixed period of time.
API gravity: The American Petroleum Institute gravity, or API gravity, express the gravity or density for liquid petroleum products. It is a measure of how heavy or light a petroleum liquid is compared to water: if its API gravity is greater than 10 degrees, it is lighter and floats on water; if less than 10, it is heavier and sinks. The lower the API gravity, the heavier and more viscous the bitumen. Most crude oils have a gravity below 45 degrees.
Apportionment: When shippers nominate more oil, or oil product, in a given month than the pipeline is able to transport, shipper volumes are apportioned (reduced) based on the tariff in effect. Apportionment can be driven by several factors, including growing oil supply, increased oil demand, and reduced pipeline capacity.
Atlantic Basin: Refers to countries residing beside or within the Atlantic Ocean and its related waters.
Atmospheric Distillation: The first processing unit in practically all refineries. The atmospheric unit separates (fractionates) crude oil into intermediate products (or fractions) based on boiling point. These products (naphtha, gasoil, and long residue) are further processed at other refinery units.
Asphalt Production: Asphalt is produced using the heaviest product (residual or short residue) sourced from the bottom of a vacuum distillation tower. Asphalt is used primarily for road construction and roofing.
Basis Point: One-hundredth of a percentage point. It is used in reference to interest rates or rates of return on equity.
Battery: With respect to electricity a battery is a container consisting of one or more cells, in which chemical energy is converted into electricity and used as a source of power. In the oil and gas industry, a battery refers to a system of tanks or surface equipment that receives natural gas or oil from one or more wells prior to delivery to downstream pipelines or other disposition. A battery may include equipment for separating, measuring or storing oil, gas and water.
Bi-directional pipeline: Gas or liquids pipeline systems that are capable of flowing product in both directions. Bi-directional pipelines offer more flexibility than traditional uni-directional pipelines that only flow product in one direction, and are becoming more common in regions where gas flows are changing rapidly.
Bid floor: The minimum bid a shipper can make for interruptible transportation service, short-term or other biddable services.
Bioenergy: Is energy, usually in form of heat or electricity, derived from the conversion of biomass where biomass may be used directly as fuel, or processed into liquids and gases.
Biogas: The gaseous emissions from anaerobic degradation of organic matter (from plants or animals) by a consortium of bacteria. It is composed primarily of methane.
Biomass: Organic material such as wood, crop waste, municipal solid waste, hog fuel or pulping liquor, processed for energy production.
Biodiesel: A diesel fuel substitute manufactured from oils such as vegetable oil or recycled cooking oil and animal fats.
Bitumen or crude bitumen: A thick, sticky form of crude oil that is heavy and viscous so that it will not flow unless it is heated or diluted with lighter hydrocarbons. Bitumen looks much like molasses at room temperature.
Bituminous coal: A dense coal used primarily as fuel in steam-electric power generation, with substantial quantities also used for heat and power applications in manufacturing and to make coke. It has a higher heat content than lignite or sub-bituminous coal.
Brent: A key global crude oil benchmark price. It is a light sweet grade extracted from the North Sea.
Butane: Is a hydrocarbon with the molecular formula C4H10. Butane is a gas at room temperature and pressure, but condenses into a liquid when pressurized, such as when stored in bottle or cylinder.
Capacity (Electricity): The maximum amount of power that a device can generate, use, or transfer; usually expressed in megawatts.
Capacity (Pipelines): The maximum amount of hydrocarbons that a pipeline can transport over a period of time. For a natural gas pipeline, daily capacity will vary depending on ambient temperature. For an oil pipeline, capacity will vary depending upon the specific grade of oil being transported.
Cap and Trade Programs: A cap-and-trade system limits the total level of specified pollutants that can be emitted in a given jurisdiction. Emissions allowances are allocated by various means to polluters which are required to hold permits for their emissions. A market for emission permits is established and market forces act to determine a price for those permits. The benefit of such a system is those that can reduce their emissions at a cost that is lower than the permit price will choose to do so. Those for whom it is more expensive to reduce emissions will prefer to purchase a permit, meaning emission reductions are achieved in an economically efficient manner.
Capital: The total funds invested in a company by lenders (debt capital) and by owners (equity capital).
Carbon capture and storage (CCS) or carbon capture and sequestration: A method of capturing and storing CO2 so that it is not released into the atmosphere, thereby reducing GHG emissions. The CO2is compressed into a transportable form, moved by pipeline or tanker, and stored in some medium, such as a deep geological formation.
Carbon pricing: Carbon pricing is a means of attaching a cost to the right to emit one tonne of carbon dioxide equivalent into the atmosphere. There are two main types of carbon pricing: a carbon tax applied to the carbon content of fossil fuels and a cap-and-trade system. Carbon pricing improves the relative competitiveness of renewable energy sources compared to fossil fuel sources.
Catalytic Cracking: A secondary crude oil refining process where a catalytic agent is used to break down larger heavier, less valuable hydrocarbons such as vacuum gas oil or resid into lighter, higher-value products (gasoline and diesel). It is one of the most important conversion processes in a refinery, allowing it to increase the production of light products at refineries.
Catalytic Reforming: A refining process involving heat, pressure and catalysts in order to convert low octane naphtha from crude oil distillation into high-octane reformate, a premium component for gasoline blending and petrochemical feedstocks. High purity hydrogen is produced as a by-product which can be used for other refinery processes.
CO2 flooding: CO2 flooding is a process of enhanced oil recovery, in which carbon dioxide is injected into oil-bearing reservoirs increasing the amount of oil that can be extracted.
Coalbed methane (CBM): Natural gas that is trapped within coal seams. CBM production is considered unconventional because the gas is adsorbed within the coal (i.e., the gas is stuck to the sides of coal’s pore spaces and fractures) and can only be desorbed and flow into a well by first lowering pressures.
Cogeneration: Production of electricity and another form of useful thermal energy, such as heat or steam, from the same energy source. The byproduct heat from industrial processes can either be used to power an electrical generator, or can be used for industrial purposes.
Coke: A carbon-rich solid that is created when heavy crude oil (including bitumen) is heated to high temperatures to crack it into lighter oils and natural gas liquids. Also, a carbon-rich solid that is created when coal is heated to high temperatures in an airless oven to drive off any water, gas, and coal tar inside the coal. Coke is largely burned in blast furnaces during the smelting of steel.
Coker: Takes the lowest value bottoms material from the petroleum refining process and cracks it to the point where the remaining yielding consists of only lighter fractions and solid carbon.
Coking: When high temperatures are applied to heavy crude oil (including bitumen) to crack it into lighter oils and natural gas liquids while also creating a solid, carbon-rich byproduct called coke. Also, when coal is baked in an airless oven at high temperatures so that the any water, gas, and coal tar inside the coal is driven off and a solid, carbon-rich product called coke remains.
Condensate: A liquid like a very light oil, but is extracted from natural gas production. Condensate can be produced at gas wells and at natural gas processing plants (where it is also known as pentanes plus).
Conventional crude oil: Crude oil that can flow into a well at commercial rates without the extensive use of technology after the well is drilled, and without altering the natural viscosity of the oil.
Conventional natural gas: Natural gas that can flow into a well at commercial rates without the extensive use of technology after the well is drilled.
Conversion or Cracking Refineries: Includes the processes in a Hydroskimming Refinery plus catalytic cracking and/or hydrocracking units. These conversion processes transform heavy products from distillation (mostly heavy gas oil) into lighter products, suitable for gasoline, jet fuel, and diesel fuel production and petrochemical feedstock. Conversion refineries are able to increase the yield of light, high-value products from the crude oil processed at the refinery.
Cooling Degree Days (CDD): CDD is an index that represents cooling demand for homes, businesses, etc. CDD is the cumulative number of days in a year for which the mean temperature is above a base temperature. In Canada, Environment Canada uses 18 degrees Celsius and others use 15.4 or 15.4 degrees Celsius as a benchmark. In the US, the base temperature is often 60 or 65 degrees Fahrenheit (16 or 18 degrees Celsius respectively).
Cost of Service: The total cost of providing service, including operating and maintenance expenses, depreciation, amortization, taxes, and return on rate base. For cost of service pipelines, it is approximately the same as its revenue requirement – see Revenue Requirement.
Cost Reduction Policies: Policies which reduce the cost of renewable projects. Such programs include government loan guarantees which reduce finance costs by mitigating risk to the lender as well as tax breaks for renewable projects.
Crown corporation: An enterprise that is wholly owned by the federal or provincial government, and ultimately by the Sovereign of Canada. Crown corporations are established by an act of legislation. Crown corporations can operate at arm’s length, or partially independently, from the government.
Crude oil: A mixture of liquid hydrocarbons in underground reservoirs that remains liquid at atmospheric pressure and temperature. Crude oil may contain small amounts of sulphur and other non-hydrocarbons, but it does not include liquids obtained from the processing of natural gas. It is refined into a variety of petroleum products including gasoline, diesel, jet fuel and petrochemicals which are used to make many consumer and industrial products.
Cyclic steam stimulation (CSS): A thermal process to produce in-situ bitumen. Steam is injected into the reservoir through a well over a period of several months, decreasing the bitumen’s viscosity. Later, the steam is turned off and the emulsion of water and bitumen flows back into the well over a period of several months. The process is repeated for the economic life of the well.
Deep-Cut facilities: A gas plant upstream of major gas-pipeline systems that extracts ethane and other natural gas liquids using turbo-expander or absorption technologies. It can extract more ethane than a shallow-cut gas plant, but less ethane than a straddle plant.
Deep Conversion or Coking Refineries: A more advanced conversion refinery which includes catalytic cracking and/or hydrocracking units, as well as coking units. A coker is able to convert the heaviest byproducts of crude distillation (resid) into lighter product streams. These streams can be further processed by catalytic cracking and catalytic reforming units to produce higher-value end-products.
Deliverability: Deliverability is the estimated amount of supply available from a given area based on historical production and individual well declines, as well as projected activity. Production may be less than deliverability due to a number of factors, such as weather-related supply interruptions, and shut-in production due to insufficient demand, strategic considerations or economics.
Delivery Area: A geographic area within a toll zone that is comprised of multiple delivery points where shippers receive delivery of their natural gas.
Delivery Point: The point specified in a service agreement where a pipeline delivers gas to, or for the account of, a shipper.
Demand-side management: Actions taken by a utility resulting in a sustained reduction in energy demand by its customers. This can reduce or delay new capital investments in power plants, pipelines, or other infrastructure and improve overall system efficiency.
Depreciation: A non-cash expense charged against earnings which allows the owner of an asset to recover its capital cost over its estimated useful life.
Distance of haul: The distance the product is scheduled to be moved.
Distillates: Hydrocarbon solvents produced from crude oil, which include kerosene, naphtha, and Stoddard solvent.
Diluent: Any lighter hydrocarbon (usually pentanes plus) added to heavy crude oil or bitumen to decrease its viscosity for transport in crude oil pipelines or in rail cars.
Discovered conventional petroleum: Oil, gas, and natural gas liquids that have been determined to exist in a pool by the drilling of one or more wells.
Distribution pipelines: A system of relatively small diameter pipes that deliver products to individual homes or businesses, usually within a city.
Edmonton Par Crude: A light, sweet blend of conventionally produced crude oils in western Canada. It is typically priced at Edmonton, Alberta and is also referred to as Mixed Sweet Blend (MSW) – see Mixed Sweet Blend.
Emerging Technologies: See Alternative or Emerging Technologies.
Energy efficiency: Technologies and measures that reduce the amount of energy and/or fuel required for the same amount of work.
Energy intensity: The amount of energy used per unit of activity. Two common ways energy intensity is measured are, energy use per capita, and energy use per unit of GDP.
Enhanced oil recovery (EOR): Crude oil extracted from reservoirs once pressures are depleted to a point where natural production is no longer economically possible, even with artificial lifts like pump jacks. This includes additional recovery processes such as pressure maintenance, cycling, water flooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids.
Ethane: Is a hydrocarbon gas with the molecular formula C2H6. Ethane is mostly used to make ethylene, which is used to make plastics.
Feed-In Tariffs (FITs): Usually offer standardized long-term contracts and administratively set payments, often specific to a particular technology. Standard terms make it easier for small projects and new entrants to qualify.
Feedstock: Natural gas or other hydrocarbons used to create another product, such as petrochemicals (e.g., ethane is the feedstock to produce ethylene).
Field gas plant: A natural gas processing facility that separates a stream of raw natural gas into methane (sales gas or marketable gas) and natural gas liquids, and removes impurities such as water, sulphur, and carbon dioxide. See also marketable natural gas, field production (of natural gas liquids), deep-cut facilities, and shallow-cut facilities.
Field production: Natural gas liquids produced at natural gas processing plants. Natural gas processing plants remove byproducts and impurities in a stream of raw natural gas. These byproducts are primarily NGLs, while impurities include water, carbon dioxide, and sulphur. Natural gas at the outlet of the plant is known as “sales gas” and is primarily methane.
Financial Risk: The risk inherent in a company's capital structure. Financial risk increases as the proportion of debt increases in relation to shareholders' equity.
Firm Transportation (FT) Service: A firm (non-interruptible) gas transportation service which provides for the delivery of gas up to a specific maximum daily quantity. The shipper must pay a monthly demand charge regardless of the quantities transported and a commodity charge for the quantities actually transported.
Fixed Assets: Assets such as land, building, equipment, and machinery which are acquired for use in the operation of a business.
Fixed Costs: Costs that remain, at least in the short run, relatively constant and do not vary with throughput. Examples are interest expense, depreciation charges, and property taxes – see Variable costs.
Fixed Toll: A toll which does not vary with changes in throughput or expense variances. Fixed tolls are usually based on forecasts of costs and throughput for a test year – see Variable cost-of-service toll.
Fossil fuel: Hydrocarbon-based fuel sources such as coal, natural gas, natural gas liquids and crude oil extracted from geological formations.
Fractionation: The process of separating a stream of natural gas liquids into individual components, or fractions. See Fractionator.
Fractionation Spread (frac spread): A 'fractionation spread', or 'frac spread', is the NGL price minus the natural gas price on an energy-equivalent basis. This indicates the potential profit received by gas processors for removing NGL from the gas stream.
Fractionator: A natural gas liquids processing facility that separates a stream of natural gas liquids into its individual components, or fractions (for example, ethane, propane, butanes, and pentanes plus).
Freehold Land: Land with its petroleum rights owned by its surface owners.
Frontier areas: Generally, the northern and offshore areas of Canada.
Gathering pipelines: A system of mid-sized pipes that deliver products from individual sources of supply, such as well, to storage or processing facilities.
Generation (electricity): The process of producing electric energy by transforming other forms of energy. Also, the amount of energy produced.
Geothermal energy: The use of geothermal heat from the earth’s molten core to generate electricity. Also used to describe ground-source heating and cooling (also known as geoexchange or ground-source heat pump).
Global Adjustment: See Hourly Ontario Energy Price.
Gravity-based structure: An offshore oil production platform that is held in place by gravity (as opposed to a floating platform). The Hibernia and Hebron oil platforms in offshore Newfoundland and Labrador are examples of gravity-based structures.
Greenhouse gas (GHG): A gas such as carbon dioxide, methane, or nitrogen oxide, which actively contributes to the atmospheric greenhouse effect. Greenhouse gases also include gases generated through industrial processes, such as hydroflurocarbons, perflurocarbons and sulphur hexafluoride.
Grid Parity: Occurs when an alternative energy source can generate electricity at a cost that is less than, or equal to, the cost of traditional technologies.
Gross Domestic Product (GDP): GDP is a measure of economic activity within a country. It is the market value of all goods and services produced within Canada’s borders, normally within a specific time period (e.g., annual).
Group 1 Company: In general, Group 1 companies regulated by the NEB are those with more extensive systems and as such are subject to a greater degree of regulatory oversight than Group 2 companies.
Group 2 Company: Group 2 companies regulated by the NEB tend to be smaller, have fewer shippers and are subject to a lighter degree of regulatory oversight since they are regulated on a complaints basis.
Heat content (natural gas): The amount of energy per volume of the natural gas stream. Natural gas produced from oil and gas wells primarily consists of methane but can also contain natural gas liquids (NGLs) like ethane, propane, and butane. Because NGLs burn hotter than methane on a per volume basis, gas that is “rich” in NGLs has higher heat content than “lean” gas.
Heating Degree Days (HDD): HDD is an index that indicates heating demand for homes, businesses, etc. HDD is the cumulative number of days in a year for which the mean temperature falls below a base temperature. In Canada, Environment Canada uses 18 degrees Celsius and others use 15.4 or 15.4 degrees Celsius as a benchmark. In the US, the base temperature is often 60 or 65 degrees Fahrenheit (16 or 18 degrees Celsius respectively).
Heavy crude oil: Generally, a crude oil that is very viscous and has a density greater than 900 kg/m³, or an API gravity below 25.
Hedge (or Financial hedge): A hedge is an investment position intended to offset price fluctuations or price risk in the future sale or purchase of a commodity or security.
Henry Hub (price): Henry Hub is the pricing point for natural gas futures traded on the New York Mercantile Exchange. The hub is located in Louisiana at the interconnection of numerous natural gas pipelines.
Heritage assets: Existing generation (and/or transmission) equipment and facilities which were built well in the past and are largely paid for.
Hourly Ontario Energy Price (HOEP): Ontario electricity prices are influenced by two major components: the HOEP and the Global Adjustment. Ontario generators sell electricity in the wholesale market where the HOEP is determined. However, most of the generators are covered by contracts and regulations that guarantee specific rates for the electricity they produce. The Global Adjustment is the difference between the HOEP and those guaranteed rates. When the HOEP is lower than the contracted or regulated rates, the Global Adjustment is positive and represents a payment from consumers to generators. When the HOEP is higher than the guaranteed rates, the Global Adjustment is negative and represents a payment from generators back to consumers.
Hydraulic Fracturing: Occurs when fluids are pumped down a well and into a formation at very high pressures until the formation cracks, creating fractures through which oil and gas in the formation can flow into the well. Sometimes done in multiple stages – see Multi-stage hydraulic fracturing.
Hydrodesulphurization: A refining process which uses hydrogen in presence of a catalyst to remove sulfur from natural gas and refined petroleum products, such as gasoline, jet fuel and diesel. Removing sulfur reduces harmful sulfur dioxide emissions resulting from the combustion of refined products.
Hydroelectric generation: A form of renewable energy that harnesses the energy in flowing water to generate electricity. This includes large or reservoir hydro and small or run-of-river hydro.
Hydroprocessing: Any of several chemical engineering processes including hydrogenation, hydrocracking and hydrotreating, especially as part of oil refining. Hydroprocessing is necessary to remove pollutants like sulfur, nitrogen and heavy metals from fuel oils, as well as in the process of catalytic hydrocracking, where large hydrocarbon molecules are cracked into shorter ones that can be used as fuel oils.
Hydroskimming Refineries: Includes crude distillation and support services as well as secondary processes such as catalytic reforming, hydro-treating and product blending. These refineries have the advantage over topping refineries that they can manufacture low sulphur diesel and heating oil and high-octane gasoline, but they may produce up to half of their output as fuel oil.
Incremental Tolls: Tolls resulting from a toll design methodology that assigns capital and operating costs of new facilities to their own cost pool, separate from the costs of the existing facilities. Tolls are designed so existing shippers pay a toll reflecting the cost of service associated with existing facilities; "new" shippers pay a toll reflecting the cost of service associated with new facilities.
Immiscible displacement fluids: Two or more liquids incapable of being mixed to form a homogeneous substance.
In situ recovery: When bitumen is recovered through wells, generally because the reservoir is too deep to permit surface mining. In situ typically uses steam or solvents such as propane or butane to reduce the bitumen’s viscosity so that it can be recovered.
Integrated mining/upgrading plant: A combined mining and upgrading operation where oil sands are mined from open pits. The bitumen is then separated from the sand and upgraded by coking or hydroprocessing.
Initial production rate (IP rate): Generally, the highest monthly production rate for an oil or gas well, often near the start of its production. More specifically, the NEB typically uses an average of the first three months of production to determine a well’s IP rate.
Interruptible Transportation Service (IT): Gas transportation service provided only when capacity is available. The shipper only pays a toll for the quantities actually transported.
Isomerization: A chemical reaction in which a lineal molecule is transformed into a molecule with the same atoms in a different arrangement (branched). Isomerization units are used at refineries to transform normal butane into isobutane, a feedstock for alkylation units.
Laterals: Pipelines that tie into a trunk line, generally part of either a gathering or distribution system – see Trunk lines.
Light crude oil: Generally, crude oil with low viscosity which flows freely at room temperature. There are varying thresholds for the line between light and medium crude oils. Also a collective term used to refer to conventional light crude oil, upgraded heavy crude oil and pentanes plus.
Light Emitting Diode (LED): A device that emits light when conducting current used in electronic displays, indoor and outdoor lighting, etc. LEDs transform most of the energy that they consume into visible light rather than heat. Because of this, LEDs reduce electricity consumption by 85 per cent compared to incandescent lights and 40 per cent compared to fluorescent lamps.
Lignite: A type of coal with a heat content lower than bituminous or sub-bituminous coal. It is often referred to as brown coal and is used almost exclusively as fuel for steam-electric power generation.
Liquefied natural gas (LNG): Liquefied natural gas is natural gas cooled below -162 degrees Celsius (-260 degrees Fahrenheit) so that it condenses into a liquid. This reduces the volume of gas by more than 600 times, allowing for efficient transport via LNG tanker or trucks.
Market-based rate: Pipeline tolls based on market conditions rather than on the pipeline’s costs - see Cost of service.
Market Risk: The business risk that stems from the overall size of the market and the market share that a pipeline is able to capture.
Marketable natural gas: The volume of gas that can be sold to the market after impurities are removed and volumes used to power surface facilities are subtracted.
Metallurgical coal: Anthracite or high-grade bituminous coal primarily used in the steelmaking industry because of its hig h heat content.
Middle Distillates: Range of medium weight refined petroleum products that include gasoline, diesel, and jet fuel.
Miscible displacement fluids: Two or more liquids that will mix together to form a homogeneous substance.
Mining, extraction, and upgrading plant: A combined mining and upgrading operation where oil sands are mined from open pits. The bitumen is then separated from the sand and upgraded by coking or hydroprocessing.
Mixed Sweet Blend (MSW): A light, sweet blend of conventionally produced crude oils in western Canada with an API gravity of around 40 degrees. It is typically priced at Edmonton, Alberta and is often called Edmonton Par Crude – see Edmonton Par Crude.
Multi-stage hydraulic fracturing: When a formation is hydraulically fractured over multiple places in a well to create a long zone of reservoir – see Hydraulic fracturing.
Naphtha: A liquid like a very light oil that is produced at refineries and is also known as pentanes plus.
Natural gas liquids (NGLs): Hydrocarbons recovered from natural gas or condensate as liquids when they are under slightly higher pressures and slightly lower temperatures. These liquids include, but are not limited to, ethane, propane, butanes and pentanes plus.
Natural Gas Reserves: Natural gas reserves are defined as the total amount of remaining marketable gas in discovered pools that can be extracted in current economic conditions.
Negotiated Settlement: An agreement between a pipeline company, its shippers and other interested parties concerning issues related to the company's revenue requirement, tolls, tariffs, and operational matters.
Net available for export: Total domestic production of a commodity that would be available for export less its domestic demand. The remainder equals the net available for export.
Net exports: Actual exports minus imports of a commodity.
Netback Price: The value producers receive for crude oil and natural gas, usually determined by the market price less transportation costs.
Net-metering: These programs don’t offer long-term contracts but allow end-users to generate their own electricity and either sell their excess production to the grid, or use it to offset purchased power.
NIT (Nova Inventory Transfer): The Nova Inventory Transfer, or NIT, is the pricing point used for natural gas sourced from the Western Canadian Sedimentary Basin (WCSB). As the natural gas trading hub located in Alberta, NIT is the commercial mechanism that overlays the Nova Gas Transmission Ltd. (NGTL) pipeline network, and is connected to several export markets and storage.
NIT-HH Differential: The difference in price between natural gas sold in Alberta and Louisiana.
Ocean energy: Includes all forms of energy derived from the sea including tidal energy, wave energy, ocean current energy, salinity gradient energy and ocean thermal gradient energy.
Olefins: A group of petrochemicals which are key in the production of plastics. Olefins are typically produced at crude oil refineries or by steam cracking NGLs at petrochemical facilities. Examples of olefins include ethylene, propylene, butylene and isobutylene.
Oil-in-place (OIP): Is the volume of oil estimated to exist in a reservoir.
Oil sands: Naturally occurring, loosely consolidated sandstones whose pore spaces are largely filled with bitumen.
Oil sands off-gas: A mixture of hydrogen and light hydrocarbon gases produced when bitumen is upgraded to synthetic crude oil.
Open Season: A process in which a pipeline company offers either existing or new capacity to the market and receives bids for that capacity from market participants.
Operated oil production: Operated production refers to crude oil production, including bitumen, assigned to the company responsible for operating the well or mine.
Operating Risk or Operational Risk: The risk to the income-earning capability of the assets that arises from technical and operational factors.
Pacific Basin: Refers to countries residing beside or within the Pacific Ocean and its related waters.
Peak demand: The maximum load consumed during a specified period of time.
Pentanes plus: A liquid like a very light oil that is extracted from natural gas at gas-processing plants and is also produced at refineries.
Petroleum product: A wide range of products refined from crude oil, such as gasoline, diesel, heating oil, and jet fuel, among others – see Refined Petroleum Product.
Photovoltaic (PV) Solar: Technology that converts sunlight into electricity at the atomic level with solar PV cells.
Primary energy demand: Primary demand is the total energy used in Canada, including energy to generate electricity.
Propane: Is a hydrocarbon with the molecular formula C3H8. Propane is a gas at room temperature and pressure, but condenses into a liquid when pressurized, such as when stored in a propane tank.
Rate Base: The amount of investment (for example, in a pipeline system) on which the company is authorized to earn a return. It typically includes net plant in service plus an allowance for working capital.
Real or constant dollar: Because of inflation, the purchasing power of the dollar changes over time. So that dollar values from one year can be compared to those of another year, they are converted from current (also called nominal or actual) dollars to constant (or real) dollars. This is done by dividing the current dollar data by a price index that measures changes in the prices of goods and services over time. In this way, the impact of inflation is eliminated when comparing data.
Receipt Point: The point specified in a service agreement where gas is delivered to the pipeline by or for the account of a shipper.
Refined petroleum product: A wide range of products refined from crude oil, such as gasoline, diesel, heating oil, and jet fuel, among others – see Petroleum product.
Regulatory Risk: The risk to the income-earning capability of the assets that arises due to the method of regulation of the company.
Regulatory Targets or Renewable Portfolio Standards (RPS): Adopted by many Canadian jurisdictions, mandate that a certain percentage of electricity should be generated from renewable sources by a certain date.
Reliability (electricity): The relative performance of any part of an electricity system, which results in electricity being delivered to customers within acceptable standards, in the amount desired, when required. Reliability can be measured by frequency, duration, or magnitude of adverse effects on electricity supply.
Renewable Natural Gas: Carbon neutral methane that is produced from the decay of organic matter in farms and landfills.
Requests for Proposals (RFPs): Used to solicit proposals for projects. For renewable energy projects, they are typically up to specified capacity targets. RFPs may specify stringent requirements which must be met by the developer.
Reserve Margin: Reserve margin, or reserve capacity, is a measure of available capacity over and above the capacity needed to meet peak demand.
Reserves: Reserves are the remaining marketable quantities of oil and natural gas expected to be recoverable from known accumulations as based on: analyses of drilling, geological, geophysical, and engineering data; and the use of established technologies; in foreseeable economic conditions.
Reserves – Proven: Proved reserves are those reserves expected to be recoverable with a high degree of certainty. It is likely that the actual remaining quantities recovered will exceed the proved reserves.
Residual Oil: Oil remains that are left over after the removal of valuable distillates during the refinement process.
Resources (Oil and Natural Gas): The remaining total volume of recoverable oil and natural gas thought to exist. Resources include deposits not economic to extract at current oil and gas prices, but may become economic as prices rise. Resources also include an undiscovered component, which may have been bypassed in current wells or have yet to be found. Resources can also include an additional amount of oil and gas that may be recovered as technology improves beyond current capabilities.
Resources - Marketable: The volume of oil or natural gas recoverable under foreseeable economic and technological conditions and in condition to be used by the market.
Resources – Ultimate Potential: An estimate of all the resources that may become recoverable or marketable when considering geological prospects and anticipated technology.
Return on Rate Base: The return which a regulated company earns on its approved rate base.
Revenue Requirement: The revenue required by a pipeline to cover the cost of providing service, including operating and maintenance expenses, depreciation, amortization, taxes, and return on rate base - see Cost of Service.
Revenue support policies (Renewables): Policies which increase projects’ revenue or provide revenue certainty, often through long-term contracts. Long-term contracts or Power Purchase Agreements (PPAs) are a method of support and they underpin the construction of most renewable projects in Canada. Contracts can be awarded through different mechanisms which vary in terms of objectives, level of support and overall design. See Requests for Proposals, Feed-in tariffs, Standard offer programs or Net-metering.
Rolled-in Tolls: Tolls resulting from a toll design methodology in which the capital and operating costs of new facilities are added to those of the existing facilities; i.e. there is one cost pool for all facilities. Tolls are designed to recover the annual cost of providing service. All shippers who receive the same service pay the same toll. Tolls only vary according to such factors as volumes and distance.
Secondary Energy Use: Energy used by final consumers for residential, agricultural, commercial, industrial and transportation purposes. It excludes the energy used to generate electricity, which is included under primary demand – see Primary energy demand.
Service Wells: Wells drilled to support oil and gas activity that do not produce oil or gas themselves.
Shale gas: A form of unconventional gas trapped within shale; a sedimentary rock originally deposited as clay and dead plankton, characterized by extremely low permeability. The majority of gas is found as free gas in the shale’s pore spaces or as adsorbed gas, stuck to the shale’s organic material.
Shale Oil: A form of unconventional oil trapped within shale; a sedimentary rock originally deposited as clay and dead plankton, characterized by extremely low permeability.
Shallow-Cut Facilities: A gas plant next to, or within, gas field plants or gas pipelines that can extract propane or heavier natural gas liquids (butanes and condensate) using refrigeration technologies.
Solar energy: Includes active and passive solar heat collection systems and photovoltaics.
Solution gas (associated gas): Natural gas produced along with oil from oil wells.
Spring Breakup: Drilling activity in western Canada drops sharply during the spring when the ground melts and provinces enforce road bans, making it difficult for rigs to get into the field.
Standard offer programs (SOPs) (Renewables): Offer long-term contracts with fixed standard rates agreed upon at the start of the program. SOPs typically offer the same rates for all renewable energy technologies.
Stand-Alone Tolls: Tolls that would be paid by only those shippers utilizing specific facilities or assets that are physically distinguishable from the existing facilities. They would be based on a revenue requirement independent of that calculated for the rest of the system – see Incremental tolls and Rolled-in tolls.
Steam assisted gravity drainage (SAGD): SAGD uses pairs of horizontal wells to produce bitumen in the oil sands. Steam is injected into an upper well to heat the bitumen, which then drains by gravity into a lower well and is pumped to the surface.
Steam oil ratio (SOR): The volume of steam required to produce one unit of oil.
Straddle plant: A reprocessing plant located on a gas pipeline. It extracts remaining natural gas liquids from previously processed gas.
Stranded asset: An asset that is not fully depreciated but no longer useful and the regulated owner is no longer able to recover its capital investment.
Sub-bituminous: A coal whose properties range from those of lignite to those of bituminous coal. Used primarily as fuel for steam-electric power generation. It has a lower heat content than lignite or bituminous coal.
Supply cost: The estimated cost at which a unit of energy can be produced over a project’s economic life. It includes capital costs associated with exploration, development, and production, as well as operating costs, taxes, royalties and producer rate of return.
Supply Risk: The business risk to the income-earning capability of the assets that arises due to the physical availability of supply.
Synthetic crude oil: Synthetic crude oil is made by upgrading crude bitumen, or diluting heavy crude oil into a lighter blend. See Upgrading (bitumen).
Take-or-Pay: A contract provision whereby a purchaser agrees to pay for a specified volume of a petroleum product during a period whether or not the contract deliveries are taken.
Tariff: The terms and conditions under which the service of a pipeline are offered or provided, including the tolls, the rules and regulations, and the practices relating to specific services.
Throughput: The amount of product moved through a pipeline.
Tidal power: Is a subset of ocean energy. Most of the present activities and discussions on ocean energy around the world are related to harnessing power from tides, tidal currents and waves.
Tight gas: Gas produced from organic-rich shales or from low permeability sandstone, siltstone, limestone or dolostone reservoirs. Tight gas reservoirs typically require the combination of horizontal drilling and multi-stage hydraulic fracturing to achieve economic rates of production.
Tight oil: Oil produced from organic-rich shales or from low permeability sandstone, siltstone, limestone or dolostone reservoirs. Tight oil reservoirs typically require the combination of horizontal drilling and multi-stage hydraulic fracturing to achieve economic rates of production.
Time-of-use pricing: Introduces different pricing levels depending on when it is used. Higher prices are charged at peak periods to encourage consumers to shift usage to lower demand hours.
Toll: The price charged by a pipeline company for transportation and other services.
Topping Refineries: Include only crude distillation plus basic support operations (tankage, recovery facilities for gases and light hydrocarbons, water treatment, power and steam). These refineries can only separate crude oil into various products by boiling point, and have no capability to alter the natural yield from this process. It is the simplest refinery configuration.
Transmission pipelines: A system of relatively large diameter pipes that deliver products over long distances, usually from sources of supply, to different markets.
Trunk Lines: The main transportation lines of a pipeline system – see Laterals.
Unconventional crude oil: Crude oil in geological reservoirs that cannot be produced without mining; the extensive use of technology; or without altering the natural viscosity of the oil. For comparison, see Conventional crude oil.
Unconventional natural gas: Natural gas that can be produced at commercial rates only after the extensive use of technology. It may be that the gas is held by the matrix material such as coal, ice, or shale; or where the reservoir has an unusually low amount of porosity and permeability. Examples of are: coalbed methane, shale gas and gas hydrates. For comparison, see Conventional natural gas.
Vacuum Distillation: The process of further distilling the heavy products (long residue) left over from atmospheric distillation. Vacuum distillation occurs at a very low pressure, reducing the boiling temperature for heavy compounds. Products from vacuum distillation (vacuum gas oil and residual or resid) are further processed by other refinery units. Residual is used at refineries for asphalt or heavy fuel oil production or as feedstock for coking units.
Variable Costs: Costs that vary with throughput, such as compressor fuel costs for gas pipelines and power costs for oil pipelines – see Fixed costs.
Variable Cost-of-Service Toll: A toll which varies from month to month to reflect actual costs and throughput. Rules prescribed by the regulator specify which costs can be recovered, the accounting principles to be followed in determining the costs, the rate of return allowed on the investment in rate base, depreciation rates, and other parameters – see Fixed toll.
Variable Renewable Electricity (VRE): Non-dispatchable electricity that is generated from intermittent sources such as solar and wind energy.
Viscosity Reduction: A refinery process that reduces the viscosity of a residual or heavy crude oil. Viscosity reduction is achieved either by partially cracking the residual in a furnace (visbreaking) or by adding a diluent (light oil, naphtha, kerosene or other distillates).
Waste heat: Energy lost during the operation of a piece of equipment or machinery. Various processes, such as cogeneration or combined heat and power (CHP) exist to capture and reuse waste heat.
West Texas Intermediate (WTI): A key North American benchmark crude oil price, it’s a light sweet grade of crude oil produced in western Texas with an API gravity of 40 degrees. It is priced at Cushing, Oklahoma and is the deliverable grade for the New York Mercantile Exchange’s oil futures contract.
Western Canada Sedimentary Basin (WCSB): The Western Canada Sedimentary Basin (WCSB) is an ancient sedimentary basin 1.4 million square kilometres in size that formed over southwest Manitoba, southern Saskatchewan, almost all of Alberta, eastern and northeastern British Columbia, and the southern Yukon and Northwest Territories. It is the major oil and gas producing region of Canada.
Western Canadian Select (WCS): A blend of Canadian heavy and bitumen sour crude oils mixed with sweet synthetic and condensates with an API gravity of about 21 degrees. It is priced at Hardisty, Alberta and is often used as a representative price for Canadian heavy crude oils.
Wind power: Energy produced when wind moves the propeller or fan style blades and rotates the turbine. This spins the shaft which is connected to a generator. Horizontal axis wind turbines are the most common type.
Working Capital: For regulatory purposes, capital employed by the utility to finance its ongoing operations, in addition to the investment in Plant in Service. An allowance for working capital is included in the rate base and consists of items such as cash working capital and materials and supplies inventory.
Write Off: The elimination of the recorded amount of an asset or liability for reasons other than the occurrence of a transaction.
WTI-WCS Differential: The WTI-WCS differential is the price difference between sweet, light crude oil priced at the Cushing, Oklahoma, price hub (WTI) and heavy blends priced at Hardisty, Alberta (WCS). It reflects a quality difference between the heavy-sour WCS and the light-sweet WTI as well as the cost of transportation. Changes in the WTI-WCS differential can arise for a number of reasons including relative changes in refinery demand for heavy crude or a change in the cost of transportation between the two markets.
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