Pipeliners Podcast


In this edition of the Pipeliners Podcast, host Russel Treat provides an in-depth recap of the 2018 ASGMT School in Houston, Texas.

The first half of the episode focuses on the new and emerging technology in the market to support more accurate and efficient measurement of natural gas.

The second half of the episode focuses on the new BLM Onshore Order and the concerns raised by operators. Included is a big update from Russel on the timing of when rules will be enforced, which rules are in the process of being re-written, and what operators can expect in the coming years.

2018 ASGMT Recap: Show Notes, Links, and Insider Terms

  • ASGMT (American School of Gas Measurement Technology) is the largest gas measurement school in the United States that is devoted to natural gas measurement, pressure regulation, flow control, and other measurement-related arenas.
  • An eight-path ultrasonic meter provides more accuracy and stability than other measurement methods to measure natural gas. The result is a more accurate measurement to create greater confidence.
  • A laser methane detector is used to detect the presence of a leak from a safe distance. The detector is typically mounted to a drone to perform an aerial test.
  • KEPServerEX from PTC enables users to connect, manage, monitor, and control diverse automation devices and software applications through a single-server interface.
  • The Bureau of Land Management (BLM) is responsible for administering, maintaining, and preserving more than 247 million acres of public land across the U.S.
  • The Royalty Policy Committee (RPC) is a division of the U.S. Department of the Interior that brings together the BLM, other federal agencies, non-federal agencies, industry representatives, and the general public to discuss royalty issues on federal or Indian land.
  • The Bureau of Safety and Environmental Enforcement (BSEE) assesses, inspects, and regulates the latest technology used in offshore facilities.
  • A LACT (Lease Automatic Custody Transfer) unit provides for automatic measurement, sampling, and transfer of oil from a leased location into a pipeline.
  • API 14.1 is a standard for natural gas sampling. The standard was revised in June 2001 to identify sample distortion sources.
  • GPA 2166 is a standard for how to obtain a natural gas sample using the gas chromatography process.

2018 ASGMT Recap: Full Episode Transcript

Russel Treat:  Welcome to the Pipeliners Podcast, episode 42.

[background music]

Announcer:  The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations.

Now your host, Russel Treat.

Russel:  Thanks for listening to the Pipeliners Podcast. We appreciate you taking the time. To show that appreciation, we’re giving away a customized YETI tumbler to one listener each episode.

This week, our winner is Steve Hosman with Jayhawk Pipeline. Congratulations, Steve, your YETI is on its way. To learn how you can win this signature prize pack, stick around ‘til the end of the episode.

This week, once again, you have me as the guest. I’m going to be doing a recap of the American School of Gas Measurement Technology. In particular, I’m going to talk about the Bureau of Land Management panel about the BLM measurement rule.

I thought I might give you a little background, so that you can know a little bit more about me, as the host of the Pipeliners Podcast, and how I got into the pipelining business.

I actually became involved with the American School of Gas Measurement Technology back in 1993, shortly after I joined a company called BMP Energy Systems. BMP Energy Systems was headquartered in Canada.

They had the largest chart measurement service bureau in Canada at that time. They had a really cool technology. Some of you guys that are younger may get a kick out of this.

They had taken a chart integrator, a chart being the circular piece of paper that you put on a meter. It turned and had pins that would paint lines that represented my temperature pressure and differential.

I would pull those charts, send them back to an office. A technician would set those on a machine called an integrator. They would spin them and trace the lines. From that, they’d be able to calculate a volume.

For those of you that worked with planimeters in high school and tried to get the area of a strange shape, you might recall the technology, the mechanical technology, about how we integrated charts.

Anyways, BMP had a PC based integrator that would capture the information and calculate a volume and back print the chart with a volume, which in 1993 was really cool, forward-thinking technology. Obviously, the world’s come a long way since then.

At that time, I was the market manager for BMP in the U.S. I was marketing this integrator. Because of that, I started going to all the measurement schools. I will tell you that I really enjoyed it. One of the reasons I am in pipelining today is because I made a decision at that time that that was the business I wanted to retire in.

From that, in 2005, I was asked to join the board for the Gulf Coast Gas Measurement Society, which is a group here in Houston that meets once a month, and invites in speakers for a luncheon to talk about various measurement topics over lunch.

Because of the relationship between the Gulf Coast Gas Measurement Society and the American School of Gas Measurement Technology, the Gulf Coast Gas Measurement Society being the group that founded ASGMT back in the ’60s, I had the privilege of joining the ASGMT board.

As a result of that engagement, I got asked to join the General Committee. I’ve been involved with the American School of Gas Measurement Technology ever since.

That’s a little background about me. I hope you find that interesting. Frankly, measurement is a technology and a business I really love. It’s great people. It’s interesting technology.

The purpose of my episode this week is to give you some highlights of this year’s American Gas Measurement School, which actually occurred earlier this week. I’m doing this recording on a Friday afternoon.

Some interesting things about the school this year. First, we had record attendance, more attendees at the school than at any time in the past. That tends to tell me that the industry’s recovering and growing.

The other thing that was interesting about the school is — I don’t have specific numbers on this — just given conversations with many of the people involved, I think there was greater than half of the attendees were actually people who were attending the school for the first time.

Again, I think that’s a reflection of where we are with the industry. Lot of people entering the industry. Companies are beginning to invest in training again after the downturn. All of these, I think, are good leading indicators of where we’re headed.

Again, just giving some general overview. I was quite busy. I was a member of the Programs Committee this year. That kept me doing a lot of running around. I did present, personally, two presentations. One of those presentations was on control room management and its impact on measurement.

Basically, that presentation, we’re educating measurement technicians about control room management, what it is, what they’re doing in the control room, how they’re governed by regulatory requirements. I wrapped that presentation up by talking about how measurement is impacted by this rule.

Probably the primary impact is the need to do point-to-point verification, that being the verification that the value I’m reading at the field device is the value that I’m seeing in the control room and that alarming is happening in the proper way, should that be a requirement.

If you’re interested, we’ll link that up. We’ll link the paper up from the American School, so that you can go to the Pipeliners Podcast episode and grab that paper if you have an interest.

Also, I did a two-hour presentation on SCADA and gas transmission. You can consider that a fundamentals of SCADA presentation. I’ve done that thing many, many, many times in many, many different formats.

If you’re interested in the paper, we’ll link that up. Also, EnerSys has recently put up a YouTube channel. I did a very similar presentation a couple of years ago at ENTELEC. We captured that as a video. That is now available for download or viewing off of YouTube if you’re interested. Again, we’ll link that up in the show notes.

There were three other panels that I was involved with at the American School. One was the new products and flow measurement. There was some interesting technology presented.

The things that caught my attention was a new eight-path ultrasonic meter that adds a higher level of diagnostics and reliability, and because of the eight paths requires less in the way of links of straight pipe and flow conditioning. We’ll link up some information about that in the show notes.

Heath Consultants did a short presentation about what they’re doing with a laser methane detector that’s drone mounted, and was used in the aftermath of Hurricane Harvey where there were some flood areas where they were concerned they might have leaks. Also very interesting information.

Lastly, Kepware, which is part of PTC, presented some information about a soon to be released version of KEPServer that’s going to be able to run on Edge devices on the Linux chip.

To me, that’s very forward-thinking and potentially disruptive to the current way that we do SCADA. We’ll probably do some more conversation about that as that comes to market.

The biggest panel was the BLM panel. There was a BLM panel in 2017 at the American School. It was very well attended. There was a lot of interest. There was a lot of request that that be repeated, so we added that back in 2018.

Probably, what a lot of people may not know is that there is been a direction from the administrative branch to re-write many parts of the BLM rule. That happened in August of this year, so just last month.

Hopefully, I’ll be able to give you some information about that. I’m going to spend some time and walk you through what was discussed in the BLM panel. The way we did it, it was done in four segments with a Q&A after each segment.

We were scheduled for two hours. We actually went a little over two-and-a-half, until we got ran out of the room [laughs] by the next group that needed to use it. Again, there was a lot of interest in this topic.

The first segment was really an overview of the BLM and the rule and what’s going on. We largely addressed this with Ardis Bartle in Episode 33, when we talked about the BLM measurement rule and its impact on pipelining.

There were some new takeaways for me in this presentation. One is that this whole process around this BLM rule has been underway for quite some time. There’s been a lot of comment given to the BLM that’s been synthesized and worked into the rulemaking process.

The primary intent of all this is to standardize how the BLM requires action from operators of measurement on BLM managed lands. At present, there can be a lot of difference from operating area to operating area where the local BLM office drives a lot of the requirements.

Really, the intent here is to get it standardized. I think this is new. There is now pressure mounting from the administration to complete the rulemaking process and to get this rule implemented. That’s new, I would say.

In my experience in rulemaking, with many rules, there comes a time when the emphasis changes from the rulemaking process to getting the rule implemented. I believe that’s where we are. We’re in that transition with this BLM measurement rule.

The next segment was presented by Stephen Anson with Extraction Oil & Gas. His topic was the impact of the BLM rule on manufacturers. This impact’s pretty material. Primarily, when you look at the new BLM rule versus the historical version, more equipment is covered and is requiring approval.

There’s approval required for each make, model, and size. At present, the way the rule is written, a make is the manufacturer, the model, and the specific software version on that piece of equipment.

The BLM is requiring that every piece of equipment provide data around its performance and uncertainty. The BLM has to review and approve each piece of equipment for use on its properties. That’s a big deal.

The BLM has formed a group called the PMT. PMT stands for Production Measurement Team. It’s a group that’s been formed specifically to review and approve this equipment.

One of the challenges is the data submission process is not yet defined. Time is marching on. It’s anticipated that there’s going to be an open season coming soon, probably in the first quarter of next year.

At least that’s what the presenters agreed in consensus that the time frame would be. The first open season, open season being a period of time that people can submit, is going to be open only to manufacturers.

There’s a lot of big questions about this whole topic, related particularly to legacy equipment, so equipment that is installed in the field, but might no longer be supported by the original manufacturer. There’s a lot of that type of equipment on BMC lands. That was the nature of the second presentation.

The third segment was done by Stormy Phillips. Stormy’s a very interesting and knowledgeable gentleman. He’s with CEESI, the Colorado Engineering Experiment Station, and is working as a contractor to the BLM and as a member of the Production Measurement Team.

His insight was interesting. He went through the details of submission requirements and particularly submission requirements for new technology. Frankly, I have to say I didn’t follow all of it.

My key takeaway from this is that as of August 2018, the administration directed the PMT to review and re-write sections 3170, 3173, 3174, and 3175 specifically to evaluate the burden being placed on industry and to address concerns that were submitted by API and the RPC.

The RPC is the Royalty Policy Committee that oversees royalty payment policy for BLM lands. It’s part of the Department of the Interior. There were many things that were addressed, that specifically the industry considers onerous or impractical. I’m going to try and go through some of that.

The last presentation segment was with Dave Curtis from Anadarko. It was a presentation of proposed alterations. I’m going to go through this quickly. I’m certainly not an expert, but I think it’d be helpful for listeners to understand some of these changes, particularly if they’re involved in measurement.

Let me just race into that. In 2018, the BLM released two instruction memorandum. We’ll link these up. It’s IM 2018-069 and IM 2018-077 to assist operators with some of the provisions within the rule and to delay enforcement of other pieces of the rule.

This is related to the BLM not being timely in providing guidance. At least that’s my understanding of what was talked about. The BLM’s currently re-writing 3173, 74, and 75.

There was recently a workshop held in August between the BLM industry experts representing the RPC, the Royalty Policy Committee, to discuss the concerns of industry.

As with all regulatory rulemaking, the BLM made no representation that they would incorporate any of the recommendations, but the revised rules will be released for public comment prior to being placed in effect. That’s very standard, any kind of rulemaking.

Some of the topics in the workshop was a need to be more specific and complete about the adoption of industry standards, in particular because industry standards are written to provide guidance, but not instruction.

Reliance only on the industry standards could create confusion. They want to be very deliberate about how they rely on industry standards and what additional guidance might be provided beyond that. They talked about applying a minimum federal ownership requirement before applying the rules. This requires a legal review to determine if it’s even a possibility.

They talked about removal of the requirement for all equipment and software to be approved by the BLM. This is largely related to the difficulty in obtaining testing data for older equipment no longer supported by the manufacturer.

The industry requested that the requirement be applied on a go-forward basis only, meaning new construction, new wells, new equipment replacements, and on very high volume locations going retroactive. If you think about this, this would seem to be a reasonable request.

In the conversations and questions, one of the operators mentioned that they had 4,000 devices that would be subject to this requirement and that the economics of replacing 4,000 devices on the wells they were operating was prohibitive.

I’m languaging it a little differently. I’m sure you can imagine what the comment might have been.

If you think about it, if you’re talking about stripper wells with old equipment, what real value do you get by replacing that equipment, in terms of anything that’s meaningful to the operator and meaningful with regards to royalty payments?

There was also discussion of creating a volumetric tiering structure related to, particularly, oil measurement requirements. One of the requirements of the rules is the operator has to notify the BLM within 72 hours after discovery of a LACT system failure.

The industry pointed out that the timing of doing that is difficult and leaves the operators open for non-compliance and accessibility fines. It’s a big issue. Certainly, there’s industry pushback looking for something that is more reasonable.

There was also discussion about extending the time between basic meter tube inspections, particularly when I do a meter tube inspection and the first one shows the tube is clean. That certainly makes sense. If I’ve got a meter that’s running clean, I shouldn’t need to inspect it as frequently.

Again, this is one of those ones that I think’s problematic. One of the requirements in the rule is what’s called multi-point liquid meter proving when operating conditions deviate more than 10 percent. I’m simplifying this a little bit.

If you think about if the flow rate changes by 10 percent or more, or pressure changes, or fluid density changes, then I need to do another multipoint proving. For some kinds of lines, that could be onerous, if not impossible to accomplish.

There was discussion from industry requesting allowing an initial multi-point proving to show linearity of a location, meaning this proving will work across a range of flow conditions, or I might do multiple proves and use those to apply them to various product conditions.

That, I’m certain, will have a lot more conversation. The other thing to note is that the API is currently developing a definition for normal conditions for liquid operations.

The rule also states that you can’t use membrane screens or filter in a sampling probe. The industry requested the rules follow the guidelines in API 14.1 and GPA 2166. I’m going to skip over some of these, because I feel like I’m getting a little bit technical and arcane for some of our listeners.

There are a number of different requests and requirements that are going on. Some of the interesting things are who’s responsible for keeping the records.

Ultimately, I think the thing that’s key to understand in all of this is ultimately the operator — the company that has the agreement with the BLM to operate a well — is responsible for meeting all these requirements.

The difficulty and the material consideration for the midstream operators is much of the measurement that’s operated for these BLM producers is actually midstream gathering and pipeline companies operating those facilities.

Certainly, there is a need for the operators and the midstream providers of gathering and processing services to collaborate in responding to the BLM rule.

I’m going to jump forward here a little bit. I’m going to talk about what we as pipeliners need to take away from this conversation. First off, it’s important to understand that the BLM’s relationship is with the operator.

Any notifications, changes, updates, submissions around the BLM rule are going to go to the operators and not to the midstream companies that are operating the measurement on behalf of those operators.

This really means as a midstream operator, I need to be clear about which of my partners are operating BLM lands and who I need to be communicating with, so that when formal communication comes from the BLM to the operator, I can be apprised and work with them to respond.

This also means that primarily the operator of the well is the person with standing to respond or comment. That’s an important subtlety of all of this and a heads up. Hey, pipeliners. Pay attention. You may want to know about this.

The important thing also to understand is there will probably be a notice of proposed rulemaking that comes out. I’m guessing it’ll be first quarter of 2019. Of course, you know that’s a guess.

Anybody that works with rulemaking knows that these things take time. Certainly, it’s clear that the BLM is pushing to get these things done and focusing on getting this rule into place.

I encourage everyone who has an interest in this to track what’s going on with the BLM, look for the advance notice, and then lastly, either respond directly or through an industry association such as the API.

Make sure that your commentary is incorporated. This is an opportunity for the industry to provide guidance such that the implementation of this rule is more practical and so that the relationship is productive and collaborative.

Finally, these rules really are of great benefit not only to the BLM, but also to the regulated community and to the public interest. To some degree, us working with the BLM to help them put something in place where we can perform well is important to our interest and our fiduciary responsibility to the public.

That’s enough of me being on my soapbox. As always, we will put together show notes and a transcript on the website and provide resources and links.

If you guys have any questions about what was presented or want to know more information about it, please feel free to reach out to me either through LinkedIn or through the Pipeliners Podcast website on the “Contact Us” page. I respond to all of those inquiries.

I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation and recap of the American School of Gas Measurement Technology and in particular the panel about the BLM order.

Just a reminder before you go. You should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinerspodcast.com/win to enter yourself in the drawing.

If you would like to support the show, the best way to do it is to leave us a review on the Podcast app on your Apple device or Google Play on your Android device.

If you have questions about how to do that, you can go to the pipelinerspodcast.com/submit-review and get instructions that will help you leave us a review.

Thank you so much for listening. If you have ideas, questions, or topics that you’d be interested in, please let us know on the “Contact Us” page at pipelinerspodcast.com, or you can reach out to me directly on LinkedIn. Thanks for listening. I’ll talk to you next week.

Transcription by CastingWords

Pipeliners Podcast © 2019