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CAODC Fits a Square Tank in a Round Hole

Tuesday, 29 Apr 2014

[Published in The 2014 Saskatchewan Oil Report and in the 2014 Manitoba Oil & Gas Review] The rig industry is in the middle of a big transition.

The transition involves systematically removing all of the fuel tanks that had been in the fleet in 2007. By 2033, all of the fleet’s fuel tanks - an inventory that numbers over 6000 units - will use a new design, one known as TC44.

Why, one might wonder, would Canadian rigs take on such a project?

After years of tough conversations about the regulation of fuel tanks on public roads, it was the best solution that the Canadian Association of Oilwell Drilling Contractors and Transport Canada could arrive at, and the solution is a unique made-in-Canada approach.

Hard Negotiations

CAODC members own fuel tanks because they need to power rigs, not because they need to transport fuel. Fuel tanks in rig packages are nearly empty when they move to new locations. It makes no sense for a contractor to pay to move a full fuel tank when it’s much cheaper to move it near empty and fill it up at the new site.

In 2003, Transport Canada decided it would no longer exempt certain items, the sort of exemption that recognized the fuel tank that is part of a rig package is different from the fuel tank that is attached to a semi-truck and delivers large volumes of fuel to gas stations.

Transport Canada's new position asserted that if a fuel tank was on a road and if it carried fuel- even minimal amounts -, the tank had to comply with Transportation of Dangerous Goods (TDG) legislation.

Without the exemption, rig contractors had a serious logistical challenge. In order to move equipment from point a to point b, they had to meet all the same criteria that fuel–haulers do.

Two years later, the industry, working through CAODC, and Transport Canada were still struggling to find agreement.

CAODC began discussions with the Canadian Standards Association (CSA) B-620 Technical Committee. The technical committee was an influential group: Transport Canada used their recommendations when determining Means of Containment (tanks) policy. The industry was hopeful.

That was the sense in a 2005 article in CAODC's magazine, The OilDriller: “TDG: A Look at Alternatives.” The article outlined the logistical challenges behind the issue. Equipment used on drilling and service rigs is very specialized and built for purpose. The fuel tanks that were part of these packages were never constructed to transport dangerous goods. The rig industry hoped to convince both the Technical Committee and Transport Canada that the industry could identify a series of tank inspection elements in a CAODC Recommended Practice. CAODC Recommended Practices (RP's) are a standard resource that rig contractors use to demonstrate that components of a rig meet a required engineering standard.

Industry hoped that by following this avenue, Transport Canada could then acknowledge the RP’s is a minimum standard that is equivalent to TDG legislation.

But Transport Canada was not budging. In their view, all fuel tanks on public roads were to be treated the same. Equivalency programs would not be accepted.

Transport Canada offered that industry consider the many designs that Transport Canada had already deemed TDG-compliant. They encouraged CAODC members to adopt any one of these for rig operations. Unfortunately, all of Transport Canada’s TDG standards were cylindrical, again, harkening back to the kind of vessel that delivers fuel to gas stations.

None of the tank designs would fit into the careful layout of a rig package. All rigs are powered by slab-sided fuel tanks. A square tank is simply more efficient. It has greater capacity and packs tight against other rig components. A slab-sided tank contributes to a smaller drilling footprint.

TC44: CAODC Members Go Where No Canadian Industry Has Gone Before

That’s when industry proposed a new tank design. CAODC members would engineer a slabsided tank specification that would be specific to industry’s needs and be TDG-compliant. It was an ambitious proposal. No industry in Canada had every attempted such a thing.

CAODC staff and members spent the next four years in consultation with Transport Canada and industry engineers. When CAODC completed the design work and tabled TC44, it was the first time Transport Canada approved a ‘made in Canada’ tank specification. Previous to this, all of Transport Canada’s designs had been adopted from other international jurisdictions.

The next dilemma faced by CAODC members was how to reasonably transition some six thousand rig fuel tanks to the new standard. CAODC and Transport Canada worked out a transition model: every fuel tank in the CAODC membership was given an identifying number. Tank categories were established based on the age of the tank, and retirement dates were scheduled for each category.

Drilling and service rig contractors need to periodically review their inventory to ensure they are prepared to meet the out-of-service dates of old tanks. Retirement means that they must be taken out of service completely and replaced with tanks built according to Transport Canada regulations and CSA Standards.

Tanks in operation must be a TC-44 tank or have a decal that shows it is registered as a 1A category tank or a type 2 category tank Tanks that fall under the ‘1A’ and ‘2’ categories are to be transitioned out before 2022 and 2032. (Type 2 tanks were built new in the period that CAODC was negotiating with Transport Canada).

As Nancy Malone, CAODC Vice-President, Operations has remarked, “This initiative has required a lot of perseverance from our members, but it’s a remarkable accomplishment. Basically, TC44 is an industry-built solution. It’s one that satisfies both Transport Canada’s concerns and rig contractors’ needs.”