When Measurement is Money
By Metering Consultant, Derek Scott
Kelton’s Derek Scott recently wrote a Thought Leader article for The Chemical Engineer called ‘When Measurement is Money’.
The article focuses on how to ensure the robustness of systems that determine the income and tax bill of plant operators, as well as illustrates some of the pitfalls when organisations get this wrong.
Derek explains how metering systems are vital for the oil, gas, and chemical industries, which deal with all kinds of refined fuels like petrol and diesel to raw materials like ethylene and benzene.
Metering systems are crucial in fiscal metering and custody transfer situations, where a meter reading determines how much a producer gets paid for a product, or how much tax is due on a product.
With large sums of money changing hands every day, accurate measurement enables producers to avoid disputes with buyers and transparently show that every transaction has been implemented fairly and equitably. In this sense accuracy has to be unimpeachable.
In his article, Scott cites an interesting example of how organisations, which get metering wrong, can end up in dispute. And measurement errors in custody transfer can be very expensive.
Therefore, custody transfer and fiscal metering are necessarily heavily regulated by national metrology standards and involve government taxation and contractual agreements between parties.
For greater insight on dynamic metering systems and the work that Kelton does across the globe in metering and measurement please see Derek’s article in The Chemical Engineer or feel free to contact us