2 Colo. Code Regs. § 404-1-429

Current through Register Vol. 47, No. 20, October 25, 2024

Section 2 CCR 404-1-429 - MEASUREMENT OF OIL

a.General Standards.

(1)Measurement and Recording. The volume of all oil production from a lease or a production unit will be measured and recorded prior to removal from the lease or production unit. The volume of production of oil will be computed in terms of Barrels of clean oil on the basis of properly calibrated meter measurements or Tank measurements of oil-level differences, made and recorded to the nearest 1/4 inch of 100% capacity tables, subject to the following corrections in Rules 429.b & c below.

(2)Incorporation by Reference. This Rule 429 will be used consistently with standards established by the ASTM International ("ASTM"), the American Petroleum Institute ("API") Manual of Petroleum Measurement Standards, the American Gas Association ("AGA"), GPA Midstream ("GPA"), or other applicable standards-setting organizations, and pursuant to contractual rights or obligations. Only those editions of standards in effect as of January 15, 2021 apply to this Rule, later amendments do not apply. All materials incorporated by reference in this Rule 429 are available for public inspection during normal business hours from the Public Room Administrator at the office of the Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado 80203. The materials may also be examined at any state publications depository library if the materials are not available online for free. In addition, these materials are available from the organizations at:

A. ASTM, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959; https://www.astm.org/.

B. API, 200 Massachusetts Avenue NW, Suite 1100, Washington, DC 20001-5571; https://www.api.org/.

C. AGA, 400 North Capitol Street, NW, Suite 450, Washington, DC 20001; https://www.aga.org/.

D. GPA, 6060 American Plaza, Suite 700, Tulsa, OK 74135, https://gpamidstream.org/.

b.Correction for Impurities. The percentage of impurities (water, sand, and other foreign substances not constituting a natural component part of the oil) will be determined to the satisfaction of the Director, and the observed gross volume of oil will be corrected to exclude the entire volume of such impurities.

c.Temperature Correction. The observed volume of oil corrected for impurities will be further corrected to the standard volume of sixty degrees Fahrenheit (60° F) pursuant to ASTM D1250-19e1, Standard Guide for Use of the Joint API and ASTM Adjunct for Temperature and Pressure Volume Correction Factors for Generalized Crude Oils, Refined Products, and Lubricating Oils (May 1, 2019), as incorporated by reference pursuant to Rule 429.a.(2) ("ASTM D1250"), or any close approximation thereof approved by the Director.

d.Gravity Determination. The gravity of oil at 60° F will be determined pursuant to Table 5 of ASTM D-1250, as incorporated by reference in Rule 429.c, or any close approximation thereof approved by the Director.

e.Tank Gauging. Measurement by Tank gauging will be completed pursuant to industry standards as specified in:

(1) API, Manual of Petroleum Measurement Standards, Chapter 3.1A: Standard Practice for the Manual Gauging of Petroleum and Petroleum Products (Third Edition, December 2018), as incorporated by reference pursuant to Rule 429.a.(2);

(2) API, Manual of Petroleum Measurement Standards, Chapter 3.1B: Standard Practice for the Manual Gauging of Petroleum and Petroleum Products (Third Edition, April 2018), as incorporated by reference pursuant to Rule 429.a.(2);

(3) API, Manual of Petroleum Measurement Standards, Chapter 18.1: Custody Transfer, Section 1: Measurement Procedures for Crude Oil Gathered from Small Tanks by Truck (Third Edition, May 2018), as incorporated by reference pursuant to Rule 429.a.(2); or

(4) API, Manual of Petroleum Measurement Standards, Chapter 18.2: Custody Transfer of Crude Oil from Lease Tanks Using Alternative Measurement Methods (First Edition, July 2016), as incorporated by reference pursuant to Rule 429.a.(2).

f.Metering Station. Measurement will be completed pursuant to industry standards as specified in the following chapters of the API Manual of Petroleum Measurement Standards, as incorporated by reference pursuant to Rule 429.a.(2):

(1) API, Manual of Petroleum Measurement Standards, Chapter 4: Proving Systems:

A. Chapter 4.2: Displacement Provers (Third Edition, September 2003, reaffirmed March 2011); and

B. Chapter 4.8: Operation of Proving Systems (Second Edition, September 2013);

(2) API, Manual of Petroleum Measurement Standards, Chapter 5: Metering:

A. Chapter 5.1: General Considerations for Measurement by Meters (Fourth Edition, September 2005, reaffirmed July 2016, including June 2008 and June 2011 errata);

B. Chapter 5.2: Measurement of Liquid Hydrocarbons by Displacement Meters (Third Edition, October 2005, reaffirmed July 2015);

C. Chapter 5.3: Measurement of Liquid Hydrocarbons by Turbine Meters (Fifth Edition, September 2005, reaffirmed August 2014, including July 2009 Addendum 1);

D. Chapter 5.4: Accessory Equipment for Liquid Meters (Fourth Edition, September 2005, reaffirmed August 2015, including May 2015 errata);

E. Chapter 5.5: Fidelity and Security of Flow Measurement Pulsed-Data Transmission Systems (Second Edition, July 2005, reaffirmed August 2015); and

F. Chapter 5.6: Measurement of Liquid Hydrocarbons by Coriolis Meters (First Edition, October 2002, reaffirmed November 2013);

(3) API, Manual of Petroleum Measurement Standards, Chapter 7: Temperature Determination:

A. Chapter 7.1: Liquid-in-Glass Thermometers (Second edition, August 2017);

B. Chapter 7.2: Portable Electronic Thermometers (Third edition, May 2018);

C. Chapter 7.3: Fixed Automatic Tank Temperature Systems (Second edition, October 2011, reaffirmed December 2016); and

D. Chapter 7.4: Dynamic Temperature Measurement (Third edition, January 2018);

(4) API, Manual of Petroleum Measurement Standards, Chapter 8: Sampling:

A. Chapter 8.1: Standard Practice for Manual Sampling of Petroleum and Petroleum Products (Fifth Edition, September 2019); and

B. Chapter 8.2: Standard Practice for Automatic Sampling of Petroleum and Petroleum Productions (Fourth Edition, November 2016); and

(5) API, Manual of Petroleum Measurement Standards, Chapter 12, Calculation of Petroleum Quantities:

A. Chapter 12.1.1: Calculation of Static Petroleum Quantities, Part 1-Upright Cylindrical Tanks and Marine Vessels (Fourth Edition, February 2019).

g.LACT Meters. Measurement utilizing LACT units will be pursuant to industry specifications or standards as specified in API, Manual of Petroleum Measurement Standards, Chapter 6.1, Lease Automatic Custody Transfer (LACT) Systems (Second Edition, May 1991, reaffirmed December 2017), as incorporated by reference pursuant to Rule 429.a.(2).

h.Sales Reconciliation. In order to facilitate the resolution of questions regarding the payment of proceeds or sales reconciliation from a Well, a payee may submit a Form 37, Payment of Proceeds - Sales Volume Reconciliation Payer Contact Form to the payer requesting additional information concerning the payee's interest in the Well, price of the oil sold, taxes applied to the sale of oil, differences in Well production and Well sales, and other information as described in § 34-60-118.5, C.R.S. The payer will return the completed form to the payee within 60 days of receipt. Submittal of this form to the payer will fulfill the requirement for "written request" described in § 34-60-118.5 (2.5), C.R.S., and is a prerequisite to filing a complaint with the Commission. The payer will use its best efforts to consult in good faith with the payee to resolve disputes regarding payment of proceeds or sales reconciliation.

i. A Form 37 requesting information concerning payment of proceeds or sales volume reconciliation may be submitted by the payee at any time. The Commission may act to prohibit or terminate any abuse of the reconciliation process.

j.Meter Calibration.

(1) Meters will be calibrated annually unless more frequent calibration is required by contractual obligations or by the Director. All calibration reports will be created, maintained, and made available as operation records pursuant to Rule 206. In the event two consecutive meter calibrations exceed a 2% error, the Operator will report the test results to the Director who may require the Operator to show cause why the meter should not be replaced.

(2) The Operator will conspicuously post and maintain the date of the last meter calibration in a legible condition at each meter at all times.

2 CCR 404-1-429

37 CR 16, August 25, 2014, effective 9/30/2014

38 CR 01, January 10, 2015, effective 2/14/2015

38 CR 03, February 10, 2015, effective 3/2/2015

38 CR 07, April 10, 2015, effective 4/30/2015

38 CR 16, August 25, 2015, effective 9/14/2015

39 CR 04, February 25, 2016, effective 3/16/2016

41 CR 05, March 10, 2018, effective 4/1/2018

41 CR 06, March 25, 2018, effective 5/1/2018

41 CR 23, December 10, 2018, effective 12/30/2018

42 CR 02, January 25, 2019, effective 2/14/2019

42 CR 17, September 10, 2019, effective 9/30/2019

42 CR 24, December 25, 2019, effective 1/14/2020

43 CR 17, September 10, 2020, effective 9/30/2020

43 CR 13, July 10, 2020, effective 11/2/2020

43 CR 24, December 25, 2020, effective 1/15/2021

45 CR 07, April 10, 2022, effective 4/30/2022

45 CR 09, May 10, 2022, effective 5/30/2022

45 CR 13, July 10, 2022, effective 7/30/2022