**Report on Reconciliation of EIA-810/820 Information to the 2002
Manufacturing Energy Consumption Survey (MECS**)

# October 19, 2004

# 

## Introduction

We conducted the reconciliation of the refineries in two phases. The
first phase was an overall survey assessment where we compared the
active refineries in the 2002 MECS sample to a current 2004 file with
the active and inactive refineries listed in the EIA-810/820 frame.
During the second phase, we contacted approximately 30 refineries to
resolve discrepancies in the reported data between the MECS and the
EIA-810/820 survey. While Title 13 prohibits the release of any
individual refinery data contained in MECS, we are providing summary
information.

**Overall Survey Assessment**

The MECS is a sample of manufacturing establishments that is drawn from
the Economic Census, and there are 116 active refineries in the MECS
sample. There are 112 active refineries in the EIA-810/820 frame per the
file we were given. There are 96 refineries out of the 116 active
refineries in the MECS sample that matched to the active cases in the
EIA-810/820 frame. This constitutes an approximate 83% match between the
two frames.

## 

We researched the 20 cases that differed between the two surveys. Of
those 20, we found six are in the 2002 MECS sample, but are not in the
EIA-810/820 frame. Five of these six refineries were among the
approximately 30 refineries that we contacted during phase two of the
project. Our conversations with these respondents revealed that two of
them had reported having refinery and non-refinery activities at the
locations. All five had either waxes or lubricating oils as their
primary shipments, and only one reported to us that they were shipping
motor gas, but it was secondary to lubricating oils.

As mentioned above, we were comparing a 2002 sample to a current 2004
file. This appears to account for the fact that an additional two of the
20 unmatched cases are in the 2002 MECS sample but the EIA-810/820 frame
has them listed as inactive. We also found that 12 of the 20 unmatched
cases are in the MECS sample, and the EIA-810/820 has 2002 data from the
refinery but does not have the refinery listed in their frame as either
being active or inactive.

In phase two, we called approximately 30 MECS establishments for which
we identified data discrepancies between the MECS and the EIA-810/820.
In general, we concentrated on the larger refineries first and ended
with the smaller ones. We told the MECS respondent of the discrepancy(s)
and then asked the MECS respondent if he/she knew whom the EIA-810/820
survey contact was for their establishment. We gave them the EIA-810/820
contact if they did not know who it was. We then asked the MECS
respondent to speak with the EIA-810/820 respondent to resolve the
discrepancy(s) for that establishment. In most cases, the MECS
respondent spoke directly to the EIA-810/820 respondent, but in some
cases we did speak with the EIA-810/820 respondent. One general result
we found was that in only three total cases, out of all the refineries,
did both the MECS and EIA-810/820 surveys share the same respondent.
More often than not, the 30 MECS respondents had not even heard of the
EIA-810/820 survey much less know who the contact was. However, when we
then told them who the contact was, they would tell us that person was
in the next office or just down the hall.

**Diesel, Distillate and Motor Gas**

It was very difficult to match the diesel, distillate, and motor gas on
the surveys. For example, there are only two refineries in the entire
EIA-810 frame that reported using motor gas as a fuel, but seven out of
the 30 refineries we contacted about motor gas on the MECS used it as a
fuel for on-site vehicles.

Only seven of the refineries on both surveys could be matched as using
diesel, distillate, or a combination of both. In four of the seven
cases, we found that the refineries had reported their diesel fuel or a
combination of their diesel/distillate fuel as just distillate in the
EIA-810 survey. Of the 30 refineries we contacted, 19 used diesel as a
fuel in onsite vehicles, heavy machinery, generators, and compressors.
Only 14 of the 30 refineries we spoke to used distillate as a fuel in
their refinery and reported it on the MECS.

As a side note, one respondent explained the difference between the two
surveys was because they used some of their distillate fuel to flush
their pipes. Since this is not a fuel use, it would not be counted on
the MECS.

**Hydrogen**

Hydrogen has a similar story as above; there were no matches between the
surveys for hydrogen being used as a fuel. Only one refinery on the
EIA-810 frame reported using hydrocarbons/hydrogen/oxygenates as a fuel,
and we cannot conclusively say whether the fuel being used is hydrogen.
Of the 30 refineries we spoke with, seven purchased, produced, and
consumed hydrogen at the refinery. All seven consumed the hydrogen as a
fuel, and four also used some of their hydrogen as a feedstock. The
hydrogen that was being used as a feedstock was not reported on the
MECS.

**Liquid Petroleum Gases (LPG)**

There were no other liquefied petroleum gases (LPG), natural gas liquids
(NGL), or mixtures of ethane, propane, and butane in the refineries we
contacted. So for the ease of explanation in this write-up, individual
amounts of ethane, propane, and butane are combined and considered as a
whole as liquefied petroleum gases (LPG). We verified the LPG fuel usage
with 30 refineries on the 2002 MECS, and 16 of the 30 refineries burn
ethane, propane, or butane as a fuel. Of those16 refineries, ten
indicated that the LPG volumes listed as a fuel on the EIA-810 survey
either matched or "fell in line with" production volumes.

Two of the respondents told us that they would only burn propane and
butane when natural gas prices are too expensive for extended periods of
time.

**Residual Fuel**

Only 13 of the 30 refineries we contacted used residual fuel oil as a
fuel. Virtually all, 12 of those 13, that reported using residual fuel
on the MECS reported the same residual fuel amount on the EIA 810
survey. We spoke to the EIA-810 respondent that did not match, and that
respondent indicated that the MECS residual volume was correct. She
indicated that the refinery had been bought out in 2002, and they had
started using a different accounting report. She misinterpreted the
report and put the residual fuel use in the wrong column on the EIA-810
survey. We were told that it has since been corrected on the EIA 810
survey.

Three respondents we contacted indicated to us that they do not burn
residual fuel anymore because of mandates within their organization to
use cleaner burning fuels.

**Still Gas or Waste Gas**

As mentioned previously, there are 96 refineries that matched between
the surveys. There are 57 of the 96 that reported equivalent still gas
volumes. We asked the same 30 refineries to verify their reported still
gas volumes, and ten of those indicated that the differences in the
still gas volumes was because of response errors.

About half of the ten respondents identified the error as a MECS
response error. They explained that because their consumption meter for
their processes is after the point where the waste gas stream combines
with the natural gas stream, the consumption for both are added
together. The MECS respondents were incorrectly putting the sum of the
consumption for both in the natural gas consumption answer instead of
backing out their natural gas purchases.

The other half of those ten respondents indicated that response errors
were present with the EIA-810 survey data. Respondents explained that
for the EIA-810, they are "netting out" the still gas volumes. In this
case, establishments produce a certain amount of waste gas, consume some
of what is produced, and sell the difference. Only the sold amounts are
being reported on the EIA-810 survey as shipments.

**Petroleum Coke**

The petroleum coke fuel use matched very well between the 2002 MECS and
the EIA-810 survey data. Of the 30 refineries contacted, 22 matched with
respect to the volume of their petroleum coke fuel use.

One of the eight respondents that did not match gave us an explanation
as to why there was a difference. In this case, the MECS respondent
spoke with the EIA-810 respondent about the difference in the data. He
learned that the EIA-810 respondent was calculating the petroleum coke
fuel incorrectly. The EIA-810 respondent was using a 50 year-old method
for calculating the petroleum coke fuel by which a set percentage is
applied to the inputs instead of calculating the actual heat content of
the petroleum coke. That is why the petroleum coke fuel use volume on
the EIA-810 survey was underestimated.

**Purchased Electricity, Natural Gas, and Steam**

Purchased electricity, natural gas, and steam also matched very well
between the 2002 MECS and the EIA-820 survey data. Of the 30 refineries
we contacted, 100 percent matched electricity and steam purchases data.
Twenty-one had similar natural gas purchases data. In four cases where
the natural gas purchases did not match, we learned that the higher
volumes on the MECS were correct. Those refineries were purchasing and
using natural gas to produce hydrogen on-site in their catalytic
reforming units.

**Summary and General Conclusions**

Our research indicates that the EIA-810 survey may be missing some
onsite fuel use that is not used in the refinery process. This onsite
fuel use is typically diesel and motor gas used to power onsite
vehicles, heavy machinery, generators, and compressors.

All three of the surveys have reporting errors, but from our research it
seems that the MECS purchased fuel data is more consistent with the
purchased fuel data on the EIA-820 survey. However, the consumed fuel
data on the MECS is not as consistent with the EIA-810 data. There are
several factors that may contribute to this. Because the profit margins
are so thin, each refinery seems to have their own internal volumetric
accounting report that tracks everything at the refinery, including fuel
consumption data. Typically, the purchased fuels data would be summed
and copied from invoices, whereas the consumed fuels are from an
internal volumetric accounting report. Another contributing factor may
relate to the fact that very few refineries have the same respondent for
the MECS and EIA-810/820 surveys. It is possible that the consumed fuels
do not match as well because the respondents at a particular refinery
are usually separate people that interpret the internal volumetric
accounting report differently or have different versions of the report.