Commingling – What Is It

By Published On: March 22, 2023Categories: Daily Market News & Insights, What Is It Wednesday

We have all heard the term mingling, but do you know what commingling is? In the oil and gas industry, the term is used to define the blending of fuels, either intentionally or unintentionally. With that surface-level description, let’s dive deeper into commingling and what you need to know about it.


What is commingling?

Commingling of fuel is the blending or mixing together of different batches or grades of fuel, either to mix similar products together for transport and storage or to create a new product with specific performance characteristics. This is a common practice in the oil and gas industry, particularly in the refining and distribution of gasoline, diesel, and other refined products.

This process can occur at various stages in the supply chain, such as during the refining of crude oil to create a specific type of gasoline or diesel, or during the storage and distribution of fuel to different locations. By combining different grades or batches of fuel, refiners and distributors can create a product that meets specific regulatory standards or customer requirements.

However, commingling of fuel can also create challenges in terms of quality control and supply chain management. For example, if two batches of fuel are mixed together that have different levels of impurities or additives, the resulting product may not meet the required specifications or performance standards. Additionally, if fuel is commingled without adequate tracking and labeling, it can be difficult to trace the source of any problems or defects that arise.

To address these issues, the oil and gas industry has established various regulations and standards for the commingling of fuel, such as minimum requirements for quality testing, labeling, and tracking of fuel throughout the supply chain. These regulations help to ensure that commingling is done in a safe, efficient, and environmentally responsible manner.


What regulations are in place for the commingling of fuel?

In the United States, the commingling of fuel is subject to various federal and state regulations that are designed to ensure the quality, safety, and environmental responsibility of the fuel supply. Some of the key regulations related to the commingling of fuel include:

ASTM International Standards: ASTM International is an organization that develops and publishes technical standards for a wide range of industries, including the oil and gas industry. ASTM has developed a series of standards for the commingling of gasoline and diesel fuels, including minimum requirements for fuel properties, blending procedures, and quality testing.

Environmental Protection Agency (EPA) Standards: The EPA is responsible for enforcing regulations related to the environmental impact of fuel production, distribution, and use. The EPA has established several regulations associated with fuel commingling, including fuel quality requirements, emissions standards, and spill prevention.

For example, the Renewable Fuel Standard (RFS) is a federal regulation under the EPA that requires a certain percentage of renewable fuels to be blended with conventional gasoline and diesel. To prevent the commingling of renewable fuels with conventional fuels, the EPA has established specific rules for the handling, storage, and transportation of renewable fuels. Specifically, the EPA requires that renewable fuels be stored separately from conventional fuels, with clear labeling and marking to indicate the type of fuel. The EPA also requires that renewable fuels be transported in dedicated pipelines or tankers, or in vehicles or vessels that have been adequately cleaned to prevent contamination.

State-Specific Regulations: In addition to federal regulations, many states have established their own regulations related to the commingling of fuel. These regulations may include requirements for fuel labeling, quality testing, and tracking, as well as specific standards for certain types of fuel.

One example of a state-specific regulation related to the commingling of fuel is California’s Low Carbon Fuel Standard (LCFS). The LCFS is a state-level program that aims to reduce the carbon intensity of the transportation fuel supply in California. The program requires fuel producers and importers to meet annual carbon intensity reduction targets, which are calculated based on the carbon intensity of the fuel they produce or import.

Overall, the regulations related to the commingling of fuel are designed to ensure that fuel is produced, distributed, and used in a safe, efficient, and environmentally responsible manner. Companies involved in the fuel supply chain must understand and comply with these regulations to help ensure the quality and safety of the fuel supply.


How might fuel become commingled on a pipeline?

Fuel can become commingled on a pipeline in a few different ways. One example is through a process known as “batching.” In this process, different batches of fuel are sent through the pipeline at different times but are not entirely separated from one another. Instead, the fuel from one batch can mix with the fuel from another batch, creating a blended product called transmix.

For example, suppose a pipeline operator wants to transport both regular gasoline and premium gasoline through the same pipeline. In that case, they might batch these fuels separately and send them through the pipeline at different times. However, if there is insufficient separation between the batches, the fuels could mix and become commingled.

Another way fuel can become commingled on a pipeline is through contamination or leakage. If there is a problem with the pipeline, such as a leak or a malfunctioning valve, it could allow fuel from one batch to mix with fuel from another batch. This can result in fuel that does not meet the required specifications, which can cause performance issues or safety concerns for the end user.

To prevent the commingling of fuel on a pipeline, pipeline operators typically have measures in place to ensure that different batches of fuel are separated from one another, and they can divert the transmix away from the clean fuel for reprocessing. They may use specialized equipment to control the flow of fuel through the pipeline, or they may implement procedures to monitor and manage the pipeline more effectively. Additionally, pipeline operators may have contingency plans in place to respond to incidents, such as leaks or spills, to minimize the impact of any commingling that occurs.

Commingling - fuel futures 3-22-23

This article is part of Daily Market News & Insights

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The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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