American Oil and Gas Reporter - August 2020 - 73

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SpecialReport: Measurement Standards
Gas Association functionality;
· The gas sampling reporting requirements in new BLM rules; and
· Notification and reporting for proving of crude operations.
Reviewing and revising SOPs and formulating a plan around the answers to
these questions provides a foundation to
make critical decisions that enhance a
company's ability to continue producing
accurate measurement at the most affordable price.
Gaps in any of these critical areas
could lead to measurement discrepancies
and inconsistencies. Additionally, these
gaps can create regulatory risk and generate
extra work when the precautions required
by the health crisis are limiting many
workers' productivity.
The Sarbanes-Oxley (SOX) Act of
2002 created legal standards for accurately reporting financial transactions.
Measurement is key to report accuracy.
SOX requires that operators be transparent
and forthcoming with measurement to
ensure all measurement is appropriate,
accurate and tied to financial reporting.
Measurement SOPs support these objectives by establishing procedures utilized consistently across the company
to report product measurement to accounting appropriately, thus ensuring
appropriate financial reporting.
SOPs that embody industry standards
and best practices will help alleviate concerns around the measurement function
and create the best path forward to satisfy
both BLM and SOX objectives.
BLM Requirements
The overall 43 CFR 3170 rule contains
an overview of the regulations governing
measurement of onshore oil and gas production on BLM royalty land. The subparts
within CFR 3170 capture industry standards and best practices to support accurate
measurement.
Subpart 3173 (Site Security & Production Handling) sets the standard for
properly handling product, preventing
loss, and creating accountability for who
is responsible for ensuring product is
measured accurately. It highlights the
need to include procedures for site security,
commingling and off-lease measurement.
3173 also conveys the need to establish
Facility Measurement Points (FMP),
which BLM defines as points where oil

or gas is produced from federal or Indian
lands and is measured, and where that
measurement affects royalty calculation.
Once a production or midstream operator establishes its BLM royalty points,
each royalty point requires both FMPs
and site facility drawings. Operators should
review subsection 3173.11 to ensure their
diagrams meet the requirements. Figure
1 shows an example diagram.
The BLM requires that royalty operators have 3173-compliant site drawings
available when a BLM authorized officer
arrives on-site to review activity. Once
a BLM FMP comes on line, the operator
has 30 days to submit the FMP so all
future records tie to the FMP number
regardless of measurement type (i.e.,
tank, LACT, EGM, or other measurement
device). FMPs are critical because all
BLM recordkeeping is associated with
FMP numbers.
For example, when strategizing system
commissioning, the only approved measurement systems are LACT measurement
stations consisting of positive displacement
or Coriolis meters, as per the API 21.2
industry standard.
Measuring Oil
Subpart 3174 (Measurement of Oil)
references dozens of API Manual of Petroleum Measurement Standards (MPMS)
to support the accurate measurement of
oil on BLM property. Consider the following five examples.
The final rule requires operators to
follow one of two industry standards for
sampling petroleum products: API MPMS
8.1 for manual sampling or API MPMS
8.2 for automatic sampling.
Operators must also accurately calibrate
each oil storage tank associated with an
approved FMP that has a tank-gauging
system, either under API MPMS 2.2A or
API MPMS RP 2556. Additionally, BLM
revised the final rule to incorporate API
MPMS 2.2A, 2.2B or 2.2C, and API MPMS
RP 2556 for calibrating sales tanks in accordance with API MPMS Chapter 2.
The rule gives operators more flexibility
to make temperature determinations, allowing alternate methods under API
MPMS Ch. 7 and API MPMS 7.3. Operators also have the option of using automatic tank gauge/hybrid tank measurement
systems to address safety concerns.
The rule references industry standards

for automatic sampling systems and for
mixing samples. It requires sampling and
sample mixing to comply with API MPMS
8.2 and 8.3, respectively.
The rule mandates that the net standard
volume be calculated following API MPMS
12.2.1 and 12.2.2. These guidelines replace
the more prescriptive language in the
original rule, which BLM cut because it
prefers to rely on industry standards wherever possible and appropriate.
Measuring Gas
Subpart 3175 (Measurement of Gas)
is focused on three key areas:
· Meter tube installation and inspection frequency;
· Electronic gas measurement (EGM)
commissioning, verification, and calibration
in alignment with API MPMS 21.1; and
· Gas sampling and related reporting
to BLM.
The meter tube installation requirements are outlined in CFR 3175.80. SOPs
for meter tube installation and inspection
should include a schedule for both basic
and detailed inspections, the Boroscope
or equivalent for meter tube internal inspection, and a checklist to ensure proper
recordkeeping if the BLM authorized officer does not attend the inspection.
Measurement SOPs for EGM must
comply with subsection 3175.30 that incorporates by reference API MPMS 21.1
for EGM system commissioning. SOPs
should reflect the EGM commissioning
procedure as per API MPMS 21.1; the
verification and calibration procedure;
the commissioning, verification, and calibration process; the policies for verification after installation or repair; and
procedures for how records will be created for volume corrections, equipment
certification schedules and EGM equipment displays.
SOPs for gas sampling and analysis
must satisfy subsection 3175.110. That
means supporting gas quality compliance
by capturing procedures for spot sampling,
gas measurement reporting, sample probe
installation and procedures in accordance
with API MPMS 14.1, insulation and/or
heat tracing installation, GARV (Gas
Analysis Reporting and Verification System) data collection for each FMP, online
gas chromatograph (GC) installation, operation, calibration and maintenance under
the requirements of GPA 2166-05 and
AUGUST 2020 73

American Oil and Gas Reporter - August 2020

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