The meeting agenda was distributed to those in attendance.

Data to Date – Mr. Aaron Dillard of Conoco reported on the sampling and testing program through early April. The Sweet stream shows less variability in the gravity and sulfur parameters now that there are specifications in place. However, there are still outlyers. Each outlyer is analyzed and, when feasible, the carrier is contacted to determine what the problem is and possible solutions.

The Basin Sour common stream crude is currently somewhat consistent in sulfur, although there has been a definite upward trend. The proposed standard, set at a statistical two standard deviations, is 2.1, but the current Upper Control Limit, also calculated on two standard deviations, is 2.39. Should standards for Sour be pursued, the sulfur limit requested would most likely be 2.3 rather than 2.1.

Please note that only 1999 and 2000 data are used to calculate the control limits shown on the attachment.

Testing Limits – At the last meeting, the Subcommittee requested that testing be limited to 30 samples per month. Clifford Mills of Conoco was to instruct ITS Caleb Brett which samples to run. For the April samples, he looked at how many samples from each location were available to be tested, how long since a location had been was tested and if the carrier appeared to be stable. At least one sample from each location was included in the testing. He’ll follow the same scenario for May samples.

Sampling and Handling Procedures - The samples are composite from each batch and the sampler is periodically tested to ensure proper working order. Duplicate samples had been kept in the past but are currently not being taken. ITS Caleb Brett traveled to the Midland area in April to pick up the samples Equilon pipeline personnel had gathered. ITS Caleb Brett then packaged and shipped the samples for testing. In April, 62 samples were prepared for shipping at a total cost of $850, which is incremental to the per-sample testing fee. In May, the cost was $1450 for 77 samples as additional time was necessary. Only 30 of the samples for each month will actually be tested.

Enforcement Implementation – Ms. Patti Edens of Equilon Pipeline informed the group that the sulfur and gravity specifications for Sweet and Super Sweet common streams on the Basin Pipeline system were put into effect on February 1. Of the seven connecting carriers that deliver Domestic Sweet to Basin, only four deliver significant volumes. All four had violations in the first three months of implementation and two of the four were over the "five strikes, you’re out" limit, please see Attachment 4AEnforcement has been suspended for 60 days while Equilon meets with the carriers and determines a revised approach. The connecting carriers are trying to implement the 0.42% sulfur specification, but are still taking all batches delivered to them. The carriers have most likely not gone all the way back to the producers with the 0.42% limit. That is probably the next necessary step.

Oversight Committee and Path Forward – Mr. Aaron Dillard of Conoco informed the group that he, Don Hamilton of Gary-Williams and Pat Quinn of Cooperative Refining met with Equilon Pipeline to discuss the possibility of additional specifications. The general consensus was that all connecting carriers need to adopt the current specifications before additional parameters are considered. Equilon Pipeline alone cannot guarantee even the gravity and sulfur limits.

The question was then raised to the Subcommittee members specifically and to the group at large as to whether there was significant benefit in retaining the sampling and testing program. All of the Subcommittee members present (Conoco, Cooperative Refining, Marathon Ashland and Williams) voted to discontinue sampling and testing. The only member not present, Sinclair, will be contacted by Aaron with the group’s decision. It was agreed to run the samples that ITS Caleb Brett currently had on hand (May) but to not collect any more.

Equilon Pipeline will, of course, maintain their testing program in conjunction with the specification implementation. They agreed to discuss internally making available their testing information to the shippers. Equilon only does gravity and sulfur, but the suggestion was made to consider consolidating a number of samples to do a full battery of tests on a periodic (monthly?) basis.

Pipeline Summit and Other Initiatives - Since it is so critical for all connecting carriers to understand the importance of the specifications and of quality in general, the group discussed the possibility of holding a "Pipeline Summit". All connecting carriers (upstream of Basin and at Cushing) would be invited for a meeting to discuss the common streams and how best to implement quality. The idea was met with enthusiastic approval. Don Hamilton of Gary-Williams and Harry Giles of the COQA will pursue this meeting.

The suggestion of a Quality Bank on each stream was brought up. This is certainly an idea to look into although it may not be possible to make the penalty for bringing in high sulfur crude large enough to offset potential benefits.

The Mid-Continent Subcommittee members all agreed that involving other area refiners is a good idea. To start, Pat Quinn volunteered to contact Tosco about their newly purchased Wood River Refinery and their quality concerns.

Open Discussion – The Mid-Continent Subcommittee will continue to meet as a group. Even without data to present, there are several open issues to discuss.

Harry Giles, COQA Facilitator