COMPLIANCE – STANDARDS & BEST PRACTICES TRACK

MONDAY, JUNE 12 | 2:20 P.M. – 3:15 P.M.

API 2350: What to Expect from the Updated Standard

During 2017, the American Petroleum Institute (API) will release the fifth edition of API Recommended Practice 2350: Overfill Protection for Storage Tanks in Petroleum Facilities (API 2350) for review and comment by industry stakeholders. Earl Crochet, Kinder Morgan, current co-Chair of the API 2350 Tank Overfill Committee, will review proposed changes to API 2350 that could impact terminal operations, including updates to the scope, risk assessment and technology provisions in the existing standard. Crochet will also examine how industry standards are developed and approved and discuss opportunities for terminal companies to participate in the process.

ABOUT THE SPEAKER Earl Crochet is the Director of Engineering and Operational Optimization for Kinder Morgan Terminals and has almost 29 years of experience in the liquid pipelines and terminals industry. Previously, he served as General Manager for Kinder Morgan Terminals in the Gulf Region, the largest liquid terminals complex in North America, and Director of Field Operations for Plantation Pipe Line, a 3,300 mile products pipeline in 8 southern states. He has been a Certified API 653 Aboveground Storage Tank Inspector since 1993. He has been a member of the API Subcommittee of Aboveground Storage Tanks (SCAST) since 1994, (including serving as past Chairman and Vice-Chairman) and currently co-chairs the API 2350 Tank Overfill Committee. He has also been a member of the API 2611 Facility Piping Committee and the Storage Tank Task Force. He was a member of the ILTA Board of Directors from 2009-2015 and served as Chairman of the Board in 2014 and Chairman Emeritus in 2015. Crochet is a registered Professional Engineer in three states and earned a Bachelor of Science degree in Mechanical Engineering and a Master of Business Administration, both from Louisiana State University.

API 2350: What May Be Expected in the Updated Standard

Earl J. Crochet, P.E.Kinder Morgan Terminals

Disclaimer• The views, opinions, and conclusions

expressed today are those of the presenter and do not necessarily reflect those of the International Liquid Terminals Association, American Petroleum Institute or Kinder Morgan Inc. and its related companies.

Who exactly is Kinder Morgan?• KM Natural Gas• KM Liquid Pipelines• KM CO2• KM Canada• KM Terminals

Kinder Morgan System Map: www.kindermorgan.com

First, a few things you need to know about me…

• I am passionate (and talk a lot) about my wife and family.

• I am fanatical (and talk a lot) about LSU, especially FOOTBALL.– (Only 82 more days until kickoff!!!)

• I have strong opinions about many things, including the energy industry.

• (I am more than willing to share those opinions; just ask me later.)

So, where are we going?

What are we going to talk about?• Brief explanation of how the API

Standards process works• Talk about some of the major changes of

the current (4th Edition) from the previous (3rd Edition) of API 2350.

• Discuss the status of the future (5th

Edition) of API 2350– Some parts that might (I repeat might) change– Some parts that won’t change

• Answer any questions I can

API Standards Creation 101• (Or everything you always wanted to know

about creating API Standards but were afraid to ask!)

API Standards Creation 101• From the API Procedures for Standards

Development:• 5.2.1 Openness• Participation in API standards activities is

open to all parties (persons and organizations) that have a direct and material interest in the subject of a standard. Consideration shall be given to the written views and objections of all participants and the right to appeal shall be made available to adversely affected parties (see 5.8).

API Standards Creation 101• 5.2.2 Balance• 5.2.2.1 Overview• API seeks broad input to its standardization activities

including the participation of all parties representing interest categories appropriate to the nature of the standard, and allows for open attendance at standards meetings (see 5.10.1). API strives for balanced representation (for example, targeting one-third representation for the traditional model of the three interest categories of operator-user, manufacturer-service supplier, and general interest) in an effort to avoid a majority of any one interest category. The criteria for balance are that a) no single interest category constitutes more than one-third of the membership of a consensus body dealing with safety-related standards or b) no single interest category constitutes a majority of the membership of a consensus body dealing with other than safety-related standards.

API Standards Creation 101• 5.2.2.2 Interest Categories• In defining the interest categories appropriate to API

standards activities, consideration shall be given to at least the following.

• a) Operator-User—the entity that is using the product specified in the standard or performing the operations or practices described in the standard.

• b) Manufacturer-Service Supplier—the entity that is fabricating a product specified in the standard or used in performing the operations or practices described in the standard or the entity that is providing a service in compliance with the standard.

• c) General Interest—an entity that is neither of the above but has a direct and material interest in the product, operation, or practice described in the standard. Typically this category includes consultants.

API Standards Creation 101• Other interest categories such as the

following may be established within a standards committee in order to insure adequate levels of representation.

• d) Government—Federal, state, or other regional regulatory body.

• e) Academia—College or university-affiliated expert.

• f) Association—Professional society or non-governmental authority.

• g) Non-Governmental Organization (NGO)—Labor, consumer interest.

API Standards Creation 101• 5.2.3 Consensus• API develops industry standards on the basis of

consensus. Consensus is established when substantial agreement has been reached by directly and materially affected interests. Substantial agreement means more than a simple majority but not necessarily unanimity. Consensus requires that all views and objections be considered, and that an effort be made toward their resolution. For purposes of these Procedures, consensus shall be defined as a majority of those eligible to vote shall have voted and approval by at least two-thirds of those voting, excluding abstentions.

API Standards Creation 101• 5.5 Membership on Standards Committees• Membership on standards committees is open to all parties having a direct

and material interest. Members shall be able to fully participate in the standards committee activities, and shall be capable of providing technical contributions or subject matter expertise; however, participation shall not be unreasonably restricted on the basis of technical qualifications. Membership in API is not a requirement for membership on standards developing committees; however, membership in API is required for membership on standards policy committees.

• Assignment of voting or non-voting status on a consensus body is determined by the chairman in consultation with API staff. All directly and materially affected parties in the subject of a standard shall be assigned a vote (with one vote per company: see 5.6.5.1), unless a party elects to be a non-voting member of the consensus body or adding a new voting member would cause the consensus body to become unbalanced (5.2.2).

• All voting members shall be active participants in standards committee activities: removal of voting rights from consensus body members may be employed in accordance with individual committee procedures. Criteria for removal should include failure to regularly participate in meetings and to return letter ballots.

API Standards Creation 101• 5.6.4 Ballot Format• A ballot shall concisely state the proposed action

being balloted. All ballots shall provide for four voting options:

• a) Affirmative;• b) Affirmative with comment;• c) Negative with reasons;• d) Abstain;• Negative votes are required to be accompanied by

comments related to the proposal and votes unaccompanied by such comments will be recorded as “invalid negatives” without further notice to the voter.

API Standards Creation 101• 5.6.6 Ballot Approval• For a proposed ballot action to be considered

approved, all comments shall be considered and in accordance with 5.2.3, both of the following conditions shall be satisfied:

• a) a majority of the members who are eligible to vote shall have voted; and

• b) at least two-thirds of the combined valid affirmative and valid negative votes (excluding abstentions) shall be affirmative.

API Standards Creation 101 • For more details:• http://mycommittees.api.org/standards/Ref

erence/API%20Procedures%20for%20Standards%20Development-2016.pdf

API 2350 4th Edition – How we got here

• 3rd edition published January 2005• Current (4th) edition published May 2012• Changed Overfill to Critical High (CH)• Changed Safe Fill to High-High (HH)• Changed Normal Fill to Maximum Working

(MW)

API 2350 3rd vs. 4th Edition• Main body was only 10 pages in 3rd; 30

pages in 4th

• 3 appendixes in 3rd; 5 in 4th

• Changed from 4 levels (Overfill, Safe Fill, Hi, Normal Fill) in 3rd to 3 levels (Critical High, High-High, Maximum Working) in 4th

• Introduced Tank Categories 1-3 in 4th

Where is the 5th Edition headed?

Possible changes to 5th edition• May add Category 0 – Tanks with no

gauges• May delete Management system• May allow wireless for AOPS• Expands on risk assessments• May remove 15/30/45 base case timelines

5th Edition is still being “debated”• First face to face meeting held in Houston

August 2016• Second face to face also held in Houston

March 2017• First draft version went out for comments

from committee members this Spring• 319 comments received!• Another face to face planned later this

year, probably in Houston