Meeting Archives

2014 Summer: Denver, CO, June 5

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Proceedings of Crude Oil Quality Association (COQA) Meeting
5 June 2014
Denver, CO 


The midyear 2014 COQA general meetings were held  June 5, 2014 at the Magnolia Hotel in downtown Denver, CO with about 110 in attendance.

Again, a reminder that Dennis Sutton has succeeded Harry Giles as Executive Director of the COQA, and all COQA correspondence should be directed to him at coqasutton@gmail.com.

The COQA wishes to thank Randy Segato and Suncor for providing a tour of their Commerce City, CO refinery, Colorado’s only refinery,  on Wednesday morning, prior to other COQA activities.  Refinery personnel provided a talk prior to the tour, making the tour even more meaningful.

We are especially appreciative of our event sponsors!  These include:

  • Ametek- sponsors of the Magnolia Bar B Q buffet lunch
  • Intertek- sponsors of our breaks

Dennis gave a quick update on the WTI Specifications, indicating that NYMEX has taken no formal action on the acceptance of the COQA recommended specs.

Joe Leto, of EAI, Inc. (Energy Analysts International) delivered our initial talk on “D-J and Niobrara Activity and Outlooks: Production, Logistics and Refinery Market Options”.  EAI, Inc. is a provider of consulting services since 1981.  He focused on the “North American Central Fairway” that extends from Alberta, through the Bakken, Colorado, Oklahoma and Texas, and referred to this area as being petroleum rich and logistics limited.  He concluded by looking at the overall naphtha/condensate supply and demand outlook.  The naphtha fraction of these growing light crudes is high compared to traditional crudes such as WTI, and also more paraffinic.  These factors will affect refinery operations and product prices.

 

Nancy Thonen, Suncor, provided a look at Suncor Energy operations, and in particular their Commerce City facility.  The typical crude slate there is about 40% Colorado crudes, 35% Wyoming grades, 10% other US crudes, and 15% Canadian crudes.

 

Chris McGowne, gave an energetic “Overview of Colorado’s Oil and Gas Industry”.  Colorado is the 7th highest state in total energy production in the US, 9th in crude oil production, and while there is growing benefit from the increased production in the Niobrara, the political theater is attracting a great deal of attention.  Recent national campaigns have targeted Colorado and a number of communities have sought local bans on hydraulic fracturing.

 

Randy Segato, Vice President of the Canadian Crude Quality Technical Association (CCQTA), gave a brief update on the CCQTA projects. Together with Bob Falkiner, they discussed the two test methods that have been submitted to ASTM for approval.  These methods are for the determination of vapor pressure in crude oil, and the determination of light hydrocarbons and hydrocarbon boiling point distribution and cut point intervals in live crude oils and condensates via gas chromatography.  All of the CCQTA projects will be discussed in much greater detail at the upcoming joint COQA/CCQTA meeting in San Francisco, October 30 & 31.

 

Paula Watkins of API updated the group on the work of her task force to develop “API RP 3000 Classifying and Loading of Crude Oil into Rail Tank Cars”.   The draft of this recommended practice was published on June 27, 2014.  This document provides guidance on the material classification, and quantity measurement of petroleum crude oil, using both laboratory and field testing techniques, for the loading of rail cars.  To support this work, 6 API committees were established:

  • Crude Oil Physical Properties Ad Hoc Group (AHG)
  • Crude Oil Classification Task Group
  • Crude Oil Quantity Measurement Task Group
  • Classification & Loading of Crude Oil Work Group
  • Rail Standards Committee
  • Rail Policy Subcommittee

The Crude Oil Physical Properties AHG concluded:

  • RVP is not a good indicator of volatility/flammability
  • Bakken essentially identical to WTI
  • RVP not really applicable for estimating bubble point temp at relief pressure
  • Water has some effect, but results preliminary and 1 vol% is max and conservative
  • Modeling crude oil as one or even two components has limitations- once initial bubble point is hit and a few lights are released BubPt curve will change (lower) significantly

During lunch, we were pleased to have Thomas Fesing of the Denver Mint give a very interesting presentation on the history and activity of the Denver Mint.  While the mint is quite different from the petroleum refining industry, both are tasked with turning raw materials into on-spec finished commodities, that everyone is very familiar with.  There was much discussion about whether the US should continue to product pennies and whether our country will do away with one dollar bills.

Dr. Hossein Kazemi of Colorado School of Mines gave a talk on “Liquid rich Shale Reservoirs”, providing a look at the upstream sector of our industry.  It was insightful to learn that these tight oil reservoirs have such low porosity and permeability that water flooding is be possible.

Derek Fraser, Maxxam Analytics, presented a talk on “Crude Oil by Rail”, focusing particularly on the movement of Canadian crude by rail.  In January 2014, Maxxam formally joined the Bureau Veritas (BV) group of companies that includes Inspectorate Americas.

Transport Canada issued Protective Direction 31 on October 17, 2013, requiring all crude oil moving by rail to be classified as Class 3, Packing Group I, unless supported by a current safety data sheet.  Then, on January 31, 2014 Transport Canada released recommendations for Crude Oil Testing and Classification through a Canadian Association of Petroleum Producers (CAPP) Working Group.


Kari Cutting of the North Dakota Petroleum Council (NDPC) presented “What’s going on in North Dakota with the Bakken?”,and the answer is MUCH! In the last 8 years, North Dakota crude oil production has grown nearly 10 fold, from 109,000 b/d to 1,000,000 b/d.  North Dakota has moved from #24 in state economic ranking to #1, and their per capita income has risen from #40 in the nation to #2. 

She then discussed two current topics- Flaring and Crude by Rail.  Then NDPC contracted with Turner, Mason & Co. and SGS in early 2014 to conduct a comprehensive study on Bakken crude quality.  While the final report was not complete the work included testing 15 well and 7 rail facilities for a slate that included:

  • API Gravity
  • Flash Point by ASTM D3278
  • Initial Boiling Point (IBP) by ASTM D86
  • Vapor Pressure by ASTM D6377 at 100°F
  • Light Ends Analyses by IP 344
  • High Temperature Simulated Distillation (HTSD) by ASTM D7169

The report concludes that Bakken crude oil is correctly classified as a Class 3 Flammable Liquid, Packing Group I or II.  The data highlighted some of the shortcomings of using D86 for determining IBP.


Stephen Weinzapfel, Plains All American Pipeline, L.P., presented a talk on “Crude by Rail & Emerging Quality Issues”.  Stephen provided slides showing that US & Canadian production growth is expected to continue with the majority of the increase being light/medium sweet & condensate but variations in crude quality & economics due to differentials and well costs will impact regional supply.  Stephen’s slides showed a timeline of recent crude by rail incidents subsequent DOT emergency orders.  Plains is a top provider of flexible midstream assets in substantially all major North American crude oil resource plays.

 

Matthew Goitia concluded the day with an update of the Crude by Rail subcommittee work.  Basically, much is happening regarding crude by rail, and there is a great deal of personnel overlap between the COQA subcommittee and the API committees.

Our next meeting will be the joint COQA/CCQTA international meeting in San Francisco at the Hyatt Fisherman’s Wharf on October 30 & 31. Because of it being a joint meeting, the Crude by Rail Subcommittee, Advisory and Executive Boards will meet on Wednesday, October 29, followed by two days of general meetings, Thursday, October 30 and Friday, October 31.

The early 2015 meeting will be in Houston, TX.  Details are forthcoming.

Dennis L. Sutton
Executive Director COQA