• There needs to be an industry standard so everyone is even and consistent
• The COQA could help by reaching a consensus among its members as to the necessity of contract language and communicating that consensus throughout the industry
• Currently, there is a "brick wall" when discussing quality upstream of the refinery. The COQA needs to issue an open invitation to dialogue to surmount that wall.
• Need to differentiate between refinery supply traders and "pure" trading
• Some companies already have specifications in their contracts but primarily for niche or specialty crudes
• New methodologies to analyze fuel and crudes are always cropping up. Easier identification of parameter results can make standards more acceptable by rendering them easier to enforce.
• We need a "universal language" for quality
• There is a disconnect between the physical pipeline for crude and its financial counterpart
• Search for contract language already in existence, on the web for example
• Maybe a quality amendment to existing contracts would be easier to implement than a new contract
• Refiners need to set goals and communicate them
• Don’t make the physical pipeline the universal "target" for quality problems
• There is a cost to crude with unexpected characteristics, especially if it means a refinery unit is underutilized for a time. That underutilization can never be made up; a real dollar cost that should be able to serve as an incentive to meet crude specifications.
• Crude oil, as with many things, is economy driven. Put some dollar value on quality
• Many different players are now involved in the crude oil supply business. It is not just a major producer supplying its own refinery through a subsidiary pipeline.
• An oversight program on common stream crude is necessary to ensure you get what you pay for
• The differences in "pay for" versus "receive" should be compensated through, for example, a quality bank
• Common stream crude is different than foreign batches of crude
• Do traders support pipeline specifications and quality? Should we generate an informal poll among our own (COQA member) traders?
• Need to quantify quality hits
• In addition to underutilization costs, there are lost opportunity costs that cannot be made up
• Stability for a refinery is invaluable
• There were a few comments on personal experience with standardization of the raw materials leading to vastly improved efficiency throughout the plant (not just a refinery)
• It should be obvious that refining losses more than offset any trading gains
• The refining industry knows less about its feedstock than any other industry
• Need to have a refining professional talk about those lost opportunities, instabilities, underutilization, etc. and what they can mean in dollars
• There needs to be a balance between the refiner and the producer. The trader is caught in the middle
• Too many refiners rely on assays that are old and not at refinery gate (for example – supplied by the producer). There should be a "variability" component built into any assay utilized for refinery modeling.
• To make producers interested in supplying a quality crude, we need to be willing to pay a premium for "better than average"
• LLS experience Indicates considerable tightening of the stream upon implementation of the specifications. Can we conclude specifications do work?

Several common issues surfaced during the discussion. The facilitator will group the comments to highlight the commonalties and assist in formulating our path forward. Additional comments and ideas are always welcomed.

Harry Giles
COQA Facilitator
TishBill@compuserve.com