Custody Measurements:

Meeting Industry and

Regulatory Requirement
Patrick Truesdale
Senior Solution Consultant
Emerson Process Management
 Presenter
z Patrick Truesdale, PE
Emerson Process Management
Industry Solutions Group
z BSEE - NCSU
z 40 Years experience in petroleum (upstream and downstream), petrochemicals, and
chemicals industries
z Previous work experience: duPont, Bonner and Moore, SETPOINT, AspenTech,
Comcept
z Expertise:, Blending and Offsites, APC & Optimization, Terminal and Pipeline
Management, Operations Planning and Scheduling, Supply Chain Optimization,
Production Accounting and Data Reconciliation, and Maintenance Management

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 Presentation Objectives

• Industry Challenges
• Regulations
• Measurement Standards
• What to do?
• Risks/Rewards (Current and Future)
• Wrap-up and Questions

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 Introduction
z Accurate measurements are essential part of a
petroleum supply chain
z Measurement technology has dramatically
improved in past 25 years
z Environmental, safety, and fiscal regulations
demand increased measurement accuracy
z Compliance can be achieved while providing
significant benefits!

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 Understanding Petroleum Supply Chain
Production & Supply Manufacturing Supply & Marketing Retail/Consumers

Transportation Transportation

The Terminals
i.e “The Cash Register”

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 Measurement Technology Timeline

C r ud e Pr ice Pr o f ile ( C ushing W T I Sp o t F OB )

150

130
US$/Bbl

110

90

70

50

30

10
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 Flow meter Technology Installed Base
Other
Target
Optical
Sonar

Open Channel
Vortex
Ultrasonic 40 yr
Variable Area Refining is 150+ year old industry
Thermal

Positive Displacement
Turbine
Coriolis 30 yr
Magnetic 50 yr
Differential Pressure 100 yr

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

251 Respondents

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 New Regulation Challenges
National Technology Transfer and Advancement (NTTA) Act of 1995
requires U.S. federal agencies (EPA, FDA, OSHA, etc.) to recognize
existing consensus industry standards (ASTM, API, ISO, etc.)

Code of Federal Regulations Standard Incorporated by Reference

FTZ – “Commercial Gauger”
Title 19 – Customs Duties
Drawback (FET)- Spill Tax
Product definitions
Title 26 – IRS
Imposition of Taxes
Title 27 – ATF Alcohol (Denaturant recipe and quantity)
OSHA (tank overfill protection)
Title 29 – Labor
??
Fugitive emissions, leaks, Spills
Title 40 - Environment Protection
GHG, RFS-2,

Title 46 – Shipping MARPOL, Vessel Tank construction, etc

Title 49 – Transportation Mobile Meter Provers

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 Consensus Industry Standards
z Tanks Measurements:
– API MPMS Chapter 2 Tank Calibration
– API MPMS Chapter 3 Tank Gauging (Storage, Tank Cars, Marine Vessels)
– OIML R85, Automatic Level Gauges
z Flow Measurements
– API MPMS Chapter 4, Proving Systems
– API MPMS Chapter 5, Metering (PD, Turbine, Coriolis, Ultrasonic)
– API MPMS Chapter 6, Metering Assemblies
z Quality Measurements
– API MPMS Chapter 7, Temperature Determination
– API MPMS Chapter 9, Density Determination
– API MPMS Chapter 11, Physical Properties Data (CTPL)
– ASTM D4311, Asphalt Volume Correction to Base Temperature
z Legal Metrology Calculations and Metering Systems
– API MPMS Chapter 12, Calculation of Petroleum Quantities
– API MPMS Chapter 21, Flow Measurement using Electronic Metering Systems
– OIML R117 Hydrocarbon Liquid Metering

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 Custody Transfers
z Points where ownership and risk changes hands
– Metering systems – measurements, certification, & witnessing
– Documentation – BOL, COQ, Customs, LC, Insurance, etc
– Orders and Invoicing
z Measurement Types
– Mass and Flow Meters
– Automatic Tank Gauges (ATG)
– Marine Vessel Gauging
– Manual Gauging
– Truck and Rail Car Outages
– Weigh Scales
– L. A. C. T. (Leased Automatic Custody Transfer)
– Surveys

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 Custody Liquid Flow Measurements
“The API Committee on Petroleum
Measurement's purpose is to provide
leadership in developing and maintaining
cost effective, state of the art,
hydrocarbon measurement standards and
programs based on sound technical
principles consistent with current
measurement technology, recognized
business accounting and engineering
practices, and industry consensus. ”
– API does not approve flow meters for custody
transfer.
– API does not define an accuracy requirement
for custody transfer.

They are performance based

specification not prescriptive.

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 API Standard: Coriolis Meters
„ Covers crude oil and hydrocarbon
products, plus “dense phase fluids” like
LPG, LNG, NGL, and ethylene
„ API Chapter 5.6 contains:
– System Description
– Safety
– Operations/Performance
– Proving
– Auditing and Reporting
– Principle of Operation
– Factory Calibration
– Proving Forms
– Calculations
„ Supporting Standards: Chapter 4
(Proving); Chapter 12 (Calculation of
Petroleum Quantities)

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 Basis for Custody Measurements

API MPMS Chapter 5.6, Section 6.3:

“… describes the methods of obtaining mass and volume
measurements of fluids using Coriolis meters.
Those intending to apply Coriolis meters for custody transfer metering
should satisfy themselves that
1. the meter,
2. its application, and
3. proving facilities
can reliably and consistently meet the accuracy criteria of all parties
engaged in the transaction.

The Measurement System!

Same applies to other meter types!

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 API Chapter 5.x – Section 6
““System
System Design Consideration ”
Consideration”
API 5.6

API 5.8

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 Recommended Flow Conditioning

5 Pipe
10 Pipe Diameters Diameters

Straightening
Vanes

Upstream Meter Downstream

Pipe Section Pipe Section

Coriolis meters do not require straight runs of pipe.

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 Recommended Temperature Sensor

„ API Chapter 7 requirements

– The temperature sensor must be positioned within the flowing
liquid stream to ensure fast response and accuracy.
– The immersion length of the thermowell should be sufficient to
put the sensor element within the center one-third of the pipe’s
diameter.
– Accuracy requirement for temperature measurement is ± 0.5 °F.
(stated as the “minimum discrimination level”)
– Temperature sensors should be checked against a NIST certified
thermometer

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 API Chapter 5.6 ““Proving
Proving Methods”
Methods”
1. Direct Mass z Fluid volume in prover (reference quantity)
is determined either by:
2. Inferred Mass – Conventional Pipe Prover,
– Small Volume Prover,
3. Volumetric – Volumetric Master Meter Prover,
– Volumetric Tank Prover,
– Gravimetric Tank Prover, or
– Mass Master Meter (volume mode)
z Prover volume then compared to meter’s
indicated volume to generate meter factor.

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 Number of Runs/Frequency for Proving
1. Typical Number of Proving Runs
(to be within 0.05% repeatability)

Conventional Pipe Prover 5 consecutive runs *

Small Volume Prover 2 to 5 runs of multiple passes each
Tank Prover 2 consecutive runs
Master Meter 2 consecutive runs

*run defined as round trip for bi-directional prover

2. “….primarily a function of regulatory and contractual

requirements.”

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 Acceptable Provings and Correction
z Meter Factor Shift
– Between provings – with same flow conditions
• Less than ±0.0025 shift in factor between provings
(i.e change from 1.0025 to 1.0075 is not satisfactory)
– Between provings - different flow rates or gravity
• Within meter’s linearity.
(i.e. if linearity is ± 0.25%, then factor should shift less than
0.0050 between provings)

z Changing the K-Factor and meter factor in

the accessory equipment is preferred
because of audit trail capability.

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 Custody Tank Volume Measurements
z Calculation of transfer quantity
tank gauging system requires:
– Level, at start and end of transfer
– Average product temperature, at start
and end of transfer
– Density (or API gravity), at start and end of
transfer.
– Base Sediment & Water
– Tank Design (Strapping Table, etc)
– Volume correction factors

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 ATG Level Measurement Accuracy

1 API ± 3/16" (4 mm)

2 PTB, Germany
3 NMi, Netherlands
4 OIML, International
5 TankRadar

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 ATT – Installation & Accuracy
Spot:
- 36” insertion length
- 36” off the floor

Multi-Point:
- 1 point every 10’
- First point 36” off the floor
- Probe should be 36” off the shell

Lab Installed

API Chapter 7 ±0.25 °C/0.5°F ±0.5 °C/1.0°F

ISO 4266 part 4 ±0.25 °C/0.5°F ±0.5 °C/1.0°F

OIML R85* N/A N/A

ATT= Automatic Tank Thermometer

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 Strapping Table – Volume Accuracy
z Depends on method used and when last strapped.
z Re-strapping a tank is not a high cost, and may be
motivated if strapping tables are old. The cost for a re-
strapping can be earned on one single transfer.
– Saybolt/ Kalibra states that an uncertainty of 0.03 % – 0.05 %
can be achieved with Laser Theodolite method today
– Old methods often states an uncertainty from 0.08 % - 0.10 %
– The accuracy figure refers to inventory accuracy.
For transfers some errors are cancelled out, and for small transfers
accuracy in strapping table is far better than the above figure

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 Flow meters or ATG ’s ?
ATG’s
z ATG’s may not perform well if:
– Small batches
– TCT are old or badly strapped
– Tanks are deformed or mechanically instable

z Meters may not perform well if:

– Large batches
– Lack of proper calibration possibilities
– Products contains abrasive material (sediment) which
tears mechanics

Note: Viscous products like bitumen, lube oil, waxy

crude may have special commercial
requirements.

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 Foreign Trade Zone Requirements

CFR Title 19: Customs Duties - Part 151:

EXAMINATION, SAMPLING, AND TESTING OF
MERCHANDISE
§ 151.13 Approval of commercial gaugers.
– (a) What is a “Customs-approved gauger”? “Commercial gaugers”
are individuals and commercial organizations that measure, gauge,
or sample merchandise …. A “Customs-approved gauger” …has
demonstrated,… the capability to perform certain gauging and
measurement procedures …..
– …
– (c) What are the approved measurement procedures? Customs-
approved gaugers must comply with appropriate procedures
published by such professional organizations as the American
Society for Testing and Materials (ASTM) and the American
Petroleum Institute (API), ...

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 Mitigate Incidents and Risks (Example)

z NTTA requires U.S. federal agencies (i.e., EPA, OSHA,

etc.) to recognize consensus industry standards.
z These agencies must accept … and abide by the
standard’s requirements.
z As example, to protect against loss … an overfill
prevention system … independent from the tank gauging
system meets …. IEC 61511(ANSI/ISA-84.01-2004 in the
U.S.)
z …IEC 61511 represents “good engineering practices” as
defined under OSHA 1910; does not protect from OSHA
General Duty clause.
z If ignored and an incident occurs, must prove the
engineering methodology in use was equivalent to the
consensus standards.

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 Global Warming: Fact or Fiction?

1. Greenhouse dates to Fourier (1824)

2. CO2 is not a pollutant but a plant food; halting all
combustion will not measurably affect atmospheric CO21
3. 40 CFR Parts 98 et al. “Mandatory Reporting of
Greenhouse Gases; Final Rule” has ca. 275,780 words (ca.
4.5 kg of 1.75 MT CO2e/ton paper2)
4. ASTM and API standards are referenced ca 195 and 20
times, respectively.
5. A $1 gasoline price increase would reduce obesity and
save 16,000 lives and $17 billion/year3
Interesting points for debate BUT reality is that:
1. Custody accounting is the “cash register”
2. Loss Control, Asset Utilization, and Energy Efficiency
projects are TRIPLE WINNERS!!! Reduce Costs, Improve
Safety, and Aid in Regulatory Compliance

1. Pierre R . Latour PhD. PE 3rd Industry Forum, Hydrocarbon Processing, Houston, Dec. 3, 2009
2. Jim Ford, “Carbon Neutral Paper – Fact of Fiction?” Climate for Ideas and Environmental Paper Network, 2009
3. Charles Courtemanche, Washington University, St. Louis, Sept. 10, 2007
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 Improving Accuracy: The Big Benefit

Loss Category Measured %1 Reality %

y r!
0.4 M/
M
1. Custody transfer (receipt, shipments) 0.5 to 0.6
3 . 8
d $1
2. Flare, evaporation, spills/leaks, FCC
a n
r to 0.5
coke make calculation, carbon
/ y0.4 0.3
dioxide, other
C O 2e
M T
0 0oil loss but
3. Fuel and H2 internal consumption
understated – not0real
. 4 , 1.1 to 1.5 0.7
c a
affects overall balances!
2 =
lu e
Va
Total 2.0 to 2.6 1.4

Note:
1. Mass Basis converted from volume data.
2. 100,000 BPD; 5.8MM BTU/Bbl; $7 MMBTU; Tier 1 Calc; No CO2 trading credits
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 Future Risk/Rewards
Source: EPA preliminary analysis of Waxman-Markey

$100
$90
or i ng
it
$80
d Mon
a n
$70
or ting
$60 Re p
GHG
e
$50
rif iabl
Ve
$40
d f or
$30
he N ee
s t
$20
Dr ive
$10
$0
2015 2020 2030 2040 2050
• Small Facility (25,000 tpy) $1,250,000 Value at Risk
• Large Facility (1,000,000 tpy) $50,000,000 Value at Risk
Projected cost of carbon allowances (in 2005 constant dollars)

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 Summary
z Large incentives exist from increasing asset utilization and
energy efficiency with reduced hydrocarbon losses and
operating costs.
z Significant technological improvement in measurement systems
has occurred - Smart Instruments and Wireless technology
opens additional benefits for the future,
z Focus on big picture and longer term vision with “low hanging
fruit”,
z Leverage existing industry standards,
z Establish and monitor correct KPI’s to achieve continuous
improvement that sustains benefits,
z The solution provides significant benefits in three areas –
reduced operating costs, safety, and compliance.

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 Wrap -up
Wrap-up

z Questions/Comments?
z Thank You.

Contact details:
Tele: +1 (713) 419 1238
eMail: Patrick.Truesdale@Emerson.com

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