Crude Oil Quality Association
(COQA)

As has been discussed at various industry meetings and detailed in Turner, Mason & Company’s recent blog “Suspicious Minds- Quality Challenges and Crude Oil Exports”, WTI quality and quality specifications vary depending on location and transportation mode and route.  

On June 23, 2020, Platts issued a proposal note, proposing specifications for WTI pipeline and cargo assessments. Their specifications address “direct-from- Permian” supply.
Their release is available for viewing here.

On May 11, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) blocked an effort by the state of Washington to tighten vapor pressure restrictions on the transportation of crude oil by rail. Washington had imposed tighter vapor pressure regulations, seeking to reduce the perceived risk of moving Bakken crude by rail. “The Washington State vapor pressure requirement, if allowed to persist, would set an alarming precedent,” PHMSA chief counsel Paul Roberti wrote in his order. PHMSA said Washington’s requirement, requiring rail cargoes to have vapor pressure lower than 9 psi, would not reduce accidents and did not conform to U.S. Hazardous Materials Regulations.  North Dakota Senator Kevin Cramer had called the Washington law a “de-facto ban on Bakken crude oil” in the Pacific Northwest, where several oil refineries are located.

Over the past several years, crude oil vapor pressure has been a significant topic of discussion at COQA meetings. Most recently, the October 2019 meeting in Dallas featured a presentation by Dr. David Lord and Dr. Anay Luketa of Sandia National Laboratories summarizing their work on their combustion experiments of various crude oils. Details of their presentation are in the Archives section on the COQA web page.

Turner, Mason & Company publishes a weekly blog series titled “Turning Point” that covers various topics regarding the petroleum industry. The blog published July 16, 2019 titled “Suspicious Minds- Quality Challenges and Crude Oil Exports” highlights the growing US crude oil exports and looks at some of the quality challenges for new buyers and traders of these US export grades. The article addresses the differing quality specs on WTI, two recent worldwide quality incidents, and concludes with discussion on avenues to reduce suspicion and build a better path forward. The complete article is available HERE.

The mid year 2019 COQA meeting was held in Oklahoma City, OK May 30 at the downtown Skirvin Hotel, with a featured tour of the Cushing, OK terminal facility preceeding the meeting.  Approximately 75 people participated in the Cushing tour, with over 115 present for the program.

Recent heavy rains did not dampen the spirits of the group as tour hosts Enterprise, Enbridge, and Plains offered an excellent overview of the activities and growth planned for Cushing that could bring total storage capacity to 100 million barrels, while Intertek hosted a barbeque lunch for the group.  Bloomberg’s Sheela Tobben’s June 4 article titled “Building Boom Shows Cushing Oil Hub Hasn’t Lost its Allure”  provides a detailed look at the storage and pipeline projects planned for Cushing.  

A blend of technical talks and broader, more commercial presentations having a mid-Continent emphasis highlighted the program.  David Braziel (RBN Energy) addressed the effects of US exports and showed the largest projected production growth in the next 5 years coming from the Permian, Eagle Ford, and Bakken, while Europe and Asia have had the biggest gains in receiving US crude.  Dan Brusstar of CME Group updated the group on the recently implemented WTI specs emphasizing that all refiners, both domestic and foreign, benefit from stable and certain quality.  Josh Baskett of Continental Resources, the #1 producer of Bakken crude, discussed the future of marketed barrels, including some of the concerns expressed by foreign buyers of US crude.  In particular, international buyers have been leery of US barrels due to some receipts being poorer quality than expected, and concerns of inconsistent quality.  Chris Baltimore’s (Argus) article on the meeting titled “Survey: Quality is King” emphasized the WTI specs and noted COQA’s role in developing them.  

Complete details of the presentations are available under the “Meeting Archives” tab on the top of the page.

On July 25, the first ever European Crude Quality Forum was hosted by Intertek at their research and laboratory facility in Aberdeen, Scotland.  Coordinated by Dr. Frederick Stubbins of Intertek, the program included a buffet lunch followed by a half day of technical presentations including:

• Andrew Duncan, Intertek- Asset Integrity Management
• Duncan Baillie, LUX Assure- What’s In Your Crude?
• Frederick Stubbins, Intertek- Total Quality Assurance from Well Stream to Forecourt
• Dennis Sutton, COQA- Introduction to the COQA; An overview of North American Crude Oil Quality
• Katharine Fogg, Essar Oil UK- Opportunity Oil Processing in European Refineries
• Ruth Downie, Infineum- Wax and Asphaltenes

Over 40 attendees participated in the event and provided lively, open discussion.