US Onshore Oil and Gas Fiscal Measurement Regulatory Updates

Emerson’s Marc Buttler joined two oil & gas professionals in a 2018 Emerson Exchange conference presentation, US Onshore Regulatory Compliance & Measurement Standards Update. Their abstract:

Regulatory compliance, perfect execution, cost of ownership, and industry acceptance are important topics to upstream and midstream operators in the United States. The development and implementation of new technology has led to the update, and new creation, of standards within the regulatory compliance and standards writing agencies. In 2017 the Bureau of Land Management [BLM] released updates to Onshore Orders #3, #4, and #5. These updates have been incorporated into the Code of Federal Regulations and include multiple changes to upstream and midstream operators. The American Petroleum Institute [API] and American Gas Association [AGA] are regularly reviewing and updating the standards they regulate as well. Updates to these standards will be provided in this short course.

Marc serves on the committee of liquid measurement of the American Petroleum Institute (API). The agenda for the presentation is to focus on the BLM updates as well as updates to the API and AGA standards.

Four new BLM rules include 43 CFR Part 3170: Onshore Oil and Gas Production; 43 CFR 3173: Requirements for Site Security and Production Handling; 43 CFR Part 3174: Measurement of Oil; 43 CFR Part 3175: Measurement of Gas. Two others include Facility Measurement Point (FMP) and Production Measurement Team (PMT).

For Part 3170 which has almost been released. PMT and Gas Analysis Reporting and Verification System (GARVS) will give guidance on gas reporting. It shows standards for Coriolis meters and automatic tank gauging systems. Coriolis meters have proven to be a better solution positive displacement (PD) and turbine meters for lease automatic custody transfer (LACT) systems. The prior regulations written decades ago did not cite Coriolis meters, so a variance was required to use. The updated regulations cite this technology as an approved flow measurement option.

For regulations 3173, 3174, 3175 have been effective since early 2017. A Federal Executive Order requires the BLM to review regulations and has delayed enforcement. This past August, the current U.S administration instructed the PMT to re-examine these regulations. Collaboration is sought with industry participants to make sure the regulations are workable.

The most misunderstand point is Facility Measurement Point (FMP). It is a location where oil and/or gas is measured, not necessarily where the custody transfer point if a different location. It includes a meter or measurement facility used to determine the volume or quality of oil and gas produced. It’s a measurement facility that affects the calculation of the volume or quality of production which royalty is owed whether not the BLM has approved it or assigned it a FMP number.

The significance of FMPs is this is where 3173,3174 and 3175 primarily apply. PMT is a central advisory body to ensure that oil and gas produced from Federal and Indian leases is accurately measured and properly reported through the review of new measurement technology, equipment and processes. The PMT makes recommendations for the BLM approval of those technologies.

The PMT has been developing test protocols for measurement equipment such as Coriolis meters. They have reached out to testing organizations such as OIML and ISO to see what existing test protocols are in place that can be incorporated. When a recommendation to the BLM is approved, everyone can use the technology without asking for variances.

Devices to be tested include automatic tank gauging systems, Coriolis flow measurement devices, PD meters, LACT systems, transducers and more.

The bottom line of these changes is greater collaboration between regulatory bodies, suppliers, industry members and special interest groups in coming up with modern regulations that provide more accurate and reliable fiscal measurements.

Posted Wednesday, October 3rd, 2018 under Flow, Oil & Gas.