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Square Tank in a Round Hole

Friday, 01 Jun 2012

[Published in The B.C. Oil and Gas Report]   On rig sites across western Canada, the fuel tanks all display large decals. These decals show a CAODC logo and a string of identification information: a ‘TC’ number, a CAODC number, a tank type identifier and, importantly, an out-of-service date.

An industry success story lies behind the ubiquitous tank decal. It’s the story of how CAODC fit a square tank in a round hole.

Ten years from now, today’s fuel tanks will all have been replaced with new tanks. To the untrained eye, these new tanks won’t look much different. For the most part, they’ll look the same as the old tanks.

The difference is that the incoming tanks will have been manufactured according to a new design standard.

Retiring an entire fleet of tanks (over six thousand) is no small task. Why would industry make this move?

It all started back in 2003 when CAODC went to Transport Canada to renew a permit.

When a rig moves to a new location, the fuel tank moves with the rest of the equipment. The tank is mostly empty during a rig move but still holds small amounts of fuel.

The movement of fuel on public roads falls within Transport Canada’s mandate. As a safety measure, Transport Canada requires trucking companies which transport fuel as primary cargo to do so in tanks that meet rigorous standards.

CAODC had been successful in presenting the case to Transport Canada that a rig move is different from the operations of fuel transport carriers. Rig contractors move fuel tanks with minimal amounts of fuel. (To move a full fuel tank doesn’t make business sense: the extra weight would only add to the cost of moving the rig.) It’s not fuel transportation. It’s equipment relocation.

For years, Transport Canada agreed with CAODC’s presentation of the issue and offered exemption permits so that the drilling and service rig industry could move their tanks.

Then in 2003, the conversation shifted dramatically. Transport Canada wasn’t willing to re-issue the exemption permit.

Without the permit, CAODC members needed new tanks, tanks that were engineered to meet TDG regulations. The industry could choose any of the Transport Canada-sanctioned tanks, and the compliance issue would be resolved. Unfortunately, this option wasn’t a simple fit.
Rig fuel tanks have always been slab-sided, and rig components have always been designed to accommodate a slab-sided tank.

Says Nancy Malone, CAODC Vice-President:

“For the federal government, a square tank was unheard of. All their tank specifications were round.”

Furthermore, Transport Canada’s tank designs were far beyond industry’s requirements. Drilling and service rig contractors didn’t need the rigorous engineering model that permitted the safe transport of full fuel tanks. They needed a design that complied with TDG regulations while recognizing these tanks were mainly empty when on the road.

As hopeless as the situation looked, CAODC members were able to table a solution: engineer a slab-sided tank specification that would be TDG-compliant and specific to industry’s needs.

It was an ambitious proposal. CAODC staff and members spent 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. A large category of tanks (those classed 1B on the equipment decal) are scheduled for retirement before January 31, 2013.

Retirement means that they must be taken out of service completely and replaced with tanks built according to Transport Canada regulations and CSA Standards.

In other words, drilling and service rig contractors are preparing now to retire 1B tanks.

Malone expects to field a lot of questions from members this year as they work to meet the upcoming retirement date.

“This initiative has required a lot of perseverance from our members, but it’s a remarkable accomplishment.  Basically, TC 44 is an industry-built solution. It’s one that satisfies both Transport Canada’s concerns and rig contractors’ needs.”