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Measurement Canada Sector Review Downstream Petroleum Consultation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Upper Level Sub-Sector MeetingPDF Version [31 Kb]
Downstream Petroleum
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Organization's and Contact's Name | Confirmed | Attended | |
Barber Engineering | Harold Lillis | ||
Canadian Energy Pipeline Association | Jake Abes | ||
Daniel Industries | Martin Schlebach | ||
Enbridge Pipelines Inc. | Don Metcalfe | ||
Flow Tech Meter services Ltd. | David Martin |
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GATX Rail Canada | Al Frederiksen | ||
Gulf Canada Resources | Bernie Brunsch | ||
Husky Oil Marketing Company | H. (Heinz) Nagel | ||
Imperial Oil | John Cihal | ||
ITS Caleb Brett | Ron Martin | ||
Mettron Proving | Ron Seekings | ||
National Energy Board | Franci Jeglic | ||
Parkland Industries Group | Sim Koopmans | ||
Procor Limited | John S. McKechnie | ||
Petro-Canada | Brian Kenny | ||
Shell Canada | Andy Znotins | ||
Total Meter Services Inc. | Dennis Swanek | ||
Transport Canada | Stephane Garneau | ||
Trillium Measurement & Control | Alan Coone | ||
Trans Mountain Pipeline Company | Colin Brown | ||
Observers From Measurement Canada | |||
MC | Luciano Burtini | ||
MC | Mike Klepatz | ||
Members of the Measurement Canada DPRS Team | |||
MC | Ted Kingsbury | ||
MC | Terry Reid | ||
MC | Renald Marceau |
2. Purpose of the meeting
This consultation meeting of interested stakeholders in the Upper Level Sub-Sector of the Downstream Petroleum industry in Canada was the final step in a consultation process to determine an appropriate level of intervention for Measurement Canada in this trade sector. Pre-consultation with numerous stakeholders over the past year in the sector identified a proposed level of intervention in a discussion paper that was published in May of this year.
The primary purpose of this final consultation meeting was to: establish Measurement Canada's level of intervention in the Downstream Petroleum Sector and in the Upper Level Sub-Sector in particular; to define criteria for an acceptable alternate service delivery mechanism(s) in those areas where intervention through inspection programs and services are deemed necessary; to define the type and level of reporting and monitoring mechanisms necessary for the sector; and to determine an appropriate sector review period.
3. Criteria for making decisions at the meeting
4. Record of decisions and recommendations from the meeting participants
Please consult the Upper Level section and Appendix
D of the Discussion Paper on Establishing an Appropriate
Level of Measurement Canada Intervention in the Downstream Petroleum
Sector for more information regarding the levels of intervention
originally proposed.
Physical Standards (Pipe provers, open provers,
pressure gauges, thermometers, master meters, master scales, etc.)
Stakeholders recommended that Measurement Canada provide for the
adoption of legislation requiring that any physical standard used for
testing and calibrating trade devices (custody transfer), whether or
not they are used by a Measurement Canada inspector, third party
service technician or petroleum company technician, is traceable,
calibrated and certified at proper intervals. The legislation would
establish requirements for the standards' design, composition and
construction; accuracy requirement; usage and frequency of
re-calibration. The requirements would apply to physical standards
used to test pipeline meters, loading rack meters, vehicle mounted
metering equipment, metering systems used to load and unload railcars,
tanker trucks, and ships. This requirement would not apply to testing
equipment used by independent testing firms, such as SGS and Caleb
Brett, for the determination of product quality and quantity in marine
transportation, ship or large tank gauging or strapping.
The following was agreed.:
The same rules would apply to Level 2 open reference measures (provers) that are designed for the calibration of working standards or water draw calibrations of pipe provers, although there may be more tighter standards for these types of measures.
Pipe Provers and Pressure/Temperature Instruments etc.Pipe provers are used extensively for this sub-sector and consist of fixed in-line provers permanently installed with the metering system intended to prove, and portable pipe provers intending to prove a wide range of meters on various products.
It was recommended that American Petroleum Institute (API) rules for the design, composition and construction of pipe provers are used. For other standards such as open provers and measures, the current Measurement Canada specifications are acceptable to stakeholders. There was a concern that any legal reference to API standards would have to remain current as the API standards are review periodically and change from time to time.
The frequency of re-calibration/re-certification should be determined through a technical work group. One possible avenue would be the MC Volumetric Standing Committee and industry through the Canadian Forum for Trade Measurement (CFTM).
Trans Mountain Pipe Line expressed concern that their company-owned fixed pipe provers would be subject to the same rules as third party provers, such as having to be certified every time a water draw was performed, as MC or an authorized ASD would always have to be present. To ease this logistical concern, it was explained that an individual within any company could be authorized by MC to perform certification. Trans Mountain does not agree with having their own people designated as being able to perform a water draw calibration as this would require additional resources to implement. In spite of this comment, the major oil companies, who represent the buyers and sellers of products in the pipeline, did not oppose the idea. The final recommendation for this topic will be determined from input in all sub-sectors where pipeline measurements take place. It was also mentioned that the availability of personnel to witness a water draw calibration is an on-going issue in the sector.
Measurement Canada would provide calibration and certification services ensuring traceability. Calibration and certification services through accredited third party laboratories would also be acceptable. The following was agreed by the participants:
Marine and Tank Strapping
It was agreed by the participants that there is no need for MC to be
involved in this area as it is adequately addressed by private testing
companies. The testing equipment used by these companies will not be
subject to MC requirements.
Master Meters, Master Scales and Associated Equipment
(thermometers) for Calibrating Railway Tank Cars
There was an assumption made that all product is either metered in
and out of the rail cars or the rail cars are weighed, for this
sub-sector. It was confirmed that there are many sites which rely only
on the stencilled volume on the rail car along with the markers and
strapping tables to determine the volume. The subject of rail tank car
calibration and measurement by tank cars/gauges should be further
investigated and looked at from a North American context. It was
recognized that the impact of adopting regulations in Canada only
would have a very low impact on the marketplace as rail cars
manufactured and calibrated in Canada by Procor represent only 2% of
the North American market. Measurement Canada, Transport Canada, North
American rail car manufacturers such as Procor, the Association of
America Railroads, and the petroleum Industry should form a working
group to review all measurement related issues in this sector to
determine the extent of any measurement problems.
It was recommended that:
Trade Devices (Measuring Devices used for Custody
Transfer of Products)Pipeline meters
Custody transfer of petroleum products by pipeline is done under
contract between two parties. These contracts specify all necessary
details regarding the measurement accuracy requirements and the
dispute resolution mechanisms to be used. Products are measured in and
out of the pipeline; and the transactions are witnessed by all
interested parties as necessary. Most pipeline meters are tested on a
quarterly basis. Industry standards already exist; there is no need
for additional MC regulations. The level of trust amongst the trading
parties appears to be high. Stakeholders of the Upper Level
Sub-Sector concluded that Measurement Canada does not need to
intervene to ensure equity and accuracy in pipeline trade
transactions. Stakeholders do not see the need for device approvals,
device initial inspection, pre-installation assessment or mandatory
periodic inspection/re-certification by Measurement Canada. All
parties trading at the Upper Level Sub-Sector reference API
documentation and standards.
Stakeholders agreed to retain current written standards found in the Weights and Measures Regulations (device limits of error, etc.) that can be used in case of measurement disputes.
Railroad Tank Cars - Tank Gauges
According to the participants, transportation of petroleum products
by rail tank cars is used for custody transfer applications. There is
no desire from the stakeholders for increased Measurement Canada
intervention in this area at this time. This issue is to be addressed
in the future under a North American context.
Marine Transportation - Measurement by Tank and Ship Gauging
Large volumes of petroleum products are transported by marine.
Usually, products are metered in and out of the ship. In the opinion
of the participants, firms specialized in quantity and quality
assessment, such as SGS and Caleb Brett, provide reliable services to
the satisfaction of stakeholders. Current industry guidelines for
practices and measurement appear to be adequate. Stakeholders do not
see the need for any further Measurement Canada involvement in this
area.
Loading Rack Metering Systems, Vehicle Mounted Metering Systems, Rail
Car Loading and Unloading Metering Systems, Vehicle Scales
The trade devices for this part of the sub-sector was deemed to
warrant a higher degree of MC intervention. Primary, secondary, and
tertiary devices would be required to undergo approval, initial
certification, and to re-introduce a periodic certification.
Measurement Canada should maintain the mandatory approval and initial certification programs for devices of this group as well as the applicable existing written standards. Recognizing l'Organization internationale de métrologie légale (OIML) or other countries' device approvals is acceptable to stakeholders as long as it does not result in the recognition of lower standards. Industry guidelines: status quo. Some concern was expressed regarding the turn around time for Measurement Canada to approve devices using new technology; and also the new design of secondary devices such as RTDs.
Metering systems at refineries and major terminals are usually tested on a periodic basis by third party service providers. During the discussion about current device compliance rates, it was established that some meters may not be tested as frequently as they should and would warrant a re-introduction of a periodic re-certification frequency set at a maximum window. This window was suggested to be 2 years. Some stakeholder had concerns about secondary devices having to be done by MC or ASD as "in-house" expertise exists within large oil companies and could have a "mini-accreditation" or recognition process for this to enable monthly checks of RTDs, for example, in order for these types of devices to be re-sealed. This was discussed again in more detail under the agenda topic of service providers.
Concerns were expressed about the fact that this mandatory periodic inspection would have to be in addition to the quarterly test they already perform and it would have to be done by another third party which represents increased costs. It was clarified that periodic re-certification may coincide with scheduled maintenance as long as it is performed by a service provider recognized by MC and the entire inspection procedure is performed.
Participants support the concept of an informal/voluntary pre-assessment of any new metering installation on paper by Measurement Canada to ensure that it meets the requirements. Further, the idea of providing standard templates for installation is recommended and turn-around time for assessment should not be more than a month.
The following was agreed to;
Products and Services (Pre-packaged and Bulk)
Stakeholders do not see the need for written standards and programs
for products transported by pipeline. The industry is well organized
and capable of handling any dispute on their own. However,
stakeholders are not opposed to maintaining the current requirements
(tolerances and net quantity declaration) for products to assist
Measurement Canada in the resolution of disputes, if ever required.
For marine and railroad transportation, stakeholders are not opposed to maintaining the current requirements for products and services to assist Measurement Canada in resolving disputes. There is a very low need for Measurement Canada's services in this area from the Upper Level perspective.
Stakeholders recommend to maintain the current Measurement Canada regulatory requirements (tolerances and net quantity declaration) for products measured in bulk by loading rack metering systems, vehicle mounted metering systems, rail car loading and unloading metering systems, and vehicle scales. Reactive enforcement of the requirements is sufficient as identified by level C2 in the discussion paper.
Alternate Service Delivery (ASD) Mechanisms and Requirements
for Service Providers
ASD for the delivery of Measurement Canada's services
and programs
In accordance with Measurement Canada's strategic direction, the
initial inspection and periodic mandatory re-inspection of trade
measuring systems will be performed by third party organizations unto
which Measurement Canada will delegate the necessary inspection
authorities.
Participants, including primary stakeholders and service providers, recommended that Measurement Canada design and implement an ASD mechanism that is simpler and less costly that the current Measurement Canada Accreditation Program. They felt that the quality assurance component (ISO 9002 model) of the current accreditation program is unnecessary and too costly. Rather, they recommended a registration or certification program that would focus on knowledge and proper enforcement of applicable legislation and other Measurement Canada requirements, and use inspection procedures. In order to be recognized or certified, an organization would basically be required to use traceable and certified physical standards; would have to be trained and assessed periodically by Measurement Canada; would have to enforce the legislation as required, and apply prescribed inspection procedures; and would have to issue inspection certificates and report the results of their inspection as prescribed. Measurement Canada would assess competencies, perform audits and product audits to ensure compliance.
Mandatory registration of service providers
Participants support the adoption of a legal requirement which would
allow only "licensed", "authorized" or
"registered" service organizations to service (repair, break
seals, adjust, test, calibrate) trade devices. The
"licensing" or "registration" program would have
to take the form of an ASD described in the previous paragraph:
mandatory use of certified standards, mandatory training, assessment
by Measurement Canada, monitoring and reporting mechanisms, etc. No
need for a costly, quality-based (ISO) system. Any added cost to the
industry for this requirement would be offset by the benefit of having
a MC recognized service provider which must meet certain criteria.
Under the current Weights and Measures Regulations, there is no control on the quality of work performed by service providers, nor for the testing equipment they use. Service providers present at the meeting view a registration system as an opportunity to create a level playing field, and an opportunity for Measurement Canada to implement measures that will contribute to enhanced device maintenance work. The rules or programs that would apply to service providers should also apply to internal maintenance staff of organizations.
Stakeholders suggested that the routine maintenance (non-metrological) work, that does not impact on accuracy of the device, performed on tertiary measurement components (ATC probes, pressure transmitters, etc.) by internal maintenance personnel, is not subject to this requirement. The current Measurement Canada reporting requirements would be maintained when seals are broken.
Stakeholders were asked to determine the need for MC intervention with respect to service providers. The four questions listed below were addressed:
The requirements for service providers to be registered should be mandatory not voluntary otherwise no change will take place. Incremental steps as far as implementation dated to be considered. It was suggested that registration and using certified standards be the first step then training and competency checks. Measurement Canada noted that implementing a mandatory licensing or registration program may require important changes to the legislation.
Disputes and Complaints
Measurement Canada will remain the last recourse in case of
complaints and disputes.
MC plays a very minor role in resolving measurement disputes in the Upper Level Sub-Sector. This sub-sector appears to present a low level of vulnerability between trading parties and appears to be capable of policing itself. Stakeholders agree that further Measurement Canada involvement in the resolution of disputes is unnecessary. All transactions are governed by contract. The status quo with regard to written standards and programs is recommended; binding compensation is not necessary.
Monitoring and Reporting
Equity and Accuracy: it appears to be generally understood
that the sub-sector strives to set and maintain measuring device
accuracy as close to zero as possible.
Stakeholders' need for monitoring and reporting mechanisms to assess on-going performance of the Upper Level Sub-Sector is minimal. Any mechanism would simply be to satisfy Measurement Canada's monitoring and reporting requirements for the sector.
Stakeholders recommended that a review of the Upper Level Sub-Sector be performed approximately 2-3 years following the implementation of the decisions regarding MC level of intervention; and between 3 to 5 years thereafter. Events that could trigger an earlier sector review at the request of industry might include a major change in device technology; a major turnaround of sector stakeholders; or possibly a drastic change in measuring device compliance rates.
The use of a stakeholder survey was acknowledged as a quick way to gauge sector comfort amongst trading parties.
The publishing of measuring device compliance rates must be done judicially. MC should consider the value and benefit of publishing sector compliance rates such retail gasoline dispenser rates compared to those of pipe line meters. The data must be qualified and readily explainable to those who question it.
It was suggested that the creation of a dedicated Industry Advisory group may be too time consuming and cumbersome. The use of the Measurement Canada CFTM venue could be amended to incorporate representation and feedback from the sector at the same time.
5. Conclusion
The above summarizes, in our opinion, the recommendations of the participants at the meeting. It is felt that consensus was reached in all cases and the recommendations received general support.
Certain proposals such as the registration of service providers will be carried over to future sub-sector meetings for discussion. A single decision will be applicable for all sub-sectors within the Downstream Petroleum sector.
The recommendations summarized in this document will be considered with the recommendations received at the other meetings of the Downstream Petroleumsector. The final report will determine the appropriate level of Measurement Canada intervention in the sector. This report is expected to be completed later in the fall.
Ottawa, August 2001
Created: 2003-07-08 Updated: 2004-09-16 |
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