Oil producers: These are the companies that extract crude oil and gas from the ground. The largest are integrated—that is, they extract the oil, and they refine it into usable fuels. But most are so-called independent – like Chesapeake Energy Corp.
Refineries: These facilities take crude oil and convert it into gasoline, diesel, heating oil, jet fuel and other products. The largest refining hub in the U.S. is located in the Texas-Louisiana coast, but there are smaller hubs all over the country.
Barrels: The barrel is the basic measuring unit for the global oil trade. It’s equivalent to about 42 gallons. A company or a field’s production, or a refinery’s processing capacity, is usually measured in barrels per day.
Cubic feet: That’s the basic measurement for natural gas production. The U.S. produces about 70 billion cubic feet of natural gas every day. A typical home can use 10,000 cubic feet per month during the winter.
Fracking: Short for hydraulic fracturing. A technique that consists in injecting large quantities of high-pressure water and chemicals into porous rock, in order to release the oil or gas trapped within. It’s normally combined with horizontal drilling, a recently developed technique that allows oil producers to extend a drilling pipe horizontally after reaching a certain depth. This combination has unleashed an energy revolution in onshore North America, but has stoked fears about potential contamination of aquifers near drilling sites.
Deepwater drilling: Drilling at water depths beyond 500 feet. This process is usually conducted by a drillship (a large vessel equipped with a very long drill pipe) or by a drilling rig (a platform-like structure.) The drilling rig is not to be confused with an oil platform, which is stationary and is used to produce and process oil and gas.
Royalties: The amount of money that land owners receive from the resources extracted in their land. In the U.S., oil companies lease land from landowners – which can include the federal government – in order to develop oil and gas fields.
LNG (Liquefied natural gas:) Natural gas, in its normal, gaseous state, can be moved via pipeline. But it takes too much space to be profitably moved by ship if needed in another continent. The solution: to turn in into a liquid, by chilling it at unbelievably low temperatures. There are liquefaction terminals – which turn gas into liquid – and regasification terminals, which reheat the liquid back into its original form. In the U.S., most terminals are regasification terminals, but with the natural gas bounty unlocked by fracking, some companies are seeking to built liquefaction facilities.
Oil futures: A contract to deliver a certain quantity of oil at a given time in the future.
Spot crude market: The actual, “physical” purchase of crude by a refinery or trader.
West Texas Intermediate: The benchmark for crude oil futures traded in the U.S.; it’s a type of light, sweet crude delivered at Cushing, Oklahoma, in the heart of the U.S. oil patch.
Brent: A type of light, sweet crude delivered in the U.K. North Sea. It acts as the global benchmark; most global crude contracts are priced in relation to the Brent.
Grid: The infrastructure that delivers electricity from its point of generation to its many points of consumption. The transmission network connects power plants to local distribution centers; the distribution network links these distribution centers to residences and factories. A smart grid is a computer-assisted network theoretically capable of channeling excess power to where it’s needed
Biofuels: Fuels made out of (recently) living organisms—such as plants and animals. Traditional biofuels are ethanol made out of sugar cane or corn, and biodiesel made of soy, animal fat or palm oil. Cellulosic biofuels are the next generation: produced en masse from vegetable waste.