Article Ref: B-019 

Weights and Measures Connection, Vol. 7, Issue 2 Page 1

3/24/2016

Considerations When Determining the Method of Sale 

for Liquefied Natural Gas (LNG) and Compressed Natural 

Gas (CNG)

Byline: Juana Williams

SIThis article was developed by National Institute of Standards and Technology (NIST), Office of Weights 

and Measures (OWM) and originally titled “Measurement and Marketing: Considerations when 

Determining the Method of Sale (MOS) for Liquefied Natural Gas (LNG)/Compressed Natural Gas (CNG).”

This discussion was first published as a companion piece to industry’s viewpoint on a proposal to modify 

NIST Handbook legal metrology requirements for commercial vehicle fueling equipment and the MOS for 

CNG and LNG. Both perspectives appeared in the article “Weighing In: Two different organizations offer 

their stance on how to measure CNG and LNG” published in the spring 2015 edition of The Source: The 

Voice and Choice of Public Gas, Vol. 7, Issue 3, pp. 10 – 13, which is also available at: 

http://www.nxtbook.com/naylor/PGAQ/PGAQ0115/index.php#/12.

The following information, based on the NIST OWM piece published in The Source: (1) addresses an issue 

currently being considered by the U.S. weights and measures community and natural gas industry; and 

(2) is being reprinted to provide the legal metrology community with fundamental philosophies that are 

used along with technical principles for good measurement practices to establish a uniform and traceable 

MOS for sale of commodities by weight, measure, or count.

The basic principles of measurement used in trade and commerce date back thousands of years and must 

be understood by everyone, buyers and sellers, businesses and consumers. To put it simply, 

measurements in commerce must be clear, transparent, verifiable, and understandable to protect 

consumers and ensure fair competition among businesses. In the United States, our forefathers 

understood the importance of good measurement in commerce; John Quincy Adams wrote, “Weights and 

Measures may be ranked among the necessaries of life...and is often learned by those who learn nothing

else, not even to read and write.” To that end, Congress has passed various legislations associated with 

ensuring uniform measurements in the marketplace, including the creation of the Office of Weights and 

Measures in 1836 and the signing of the Treaty of the Meter in 1875. With the founding of the National 

Conference on Weights and Measures by the National Bureau of Standards in 1905, the United States 

took a significant step towards assuring uniformity and equity in commerce throughout the states.

Establishing an acceptable method of sale is a critical first step in the development of a fair and 

competitive marketplace for any commodity. For instance, milk could be sold by volume, or it could be 

sold by mass. If both were allowed, the measurement principles cited above would be violated. That is, a 

volume of milk purchased at one location could not easily be compared by a consumer against a weight 

of milk purchased elsewhere and, thus, frustrate value comparison. For this reason, milk is only allowed 

to be sold by volume in retail stores. History has shown that when products are introduced into the 

marketplace without a legally defined standard, confusion and unfair competitive practices can quickly 

evolve and potentially harm the consumer’s perception of the product and business reputation of the 

seller. For example, at one time, precious metals were being sold by the troy ounce as well as the 
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avoirdupois ounce. Unscrupulous dealers would buy gold by one unit and sell by another, taking 

advantage of unaware customers.

When faced with deciding on the best method to advertise and sell a new commodity, existing trade

practices are reviewed to determine what already works and what can be improved. This review should 

include a look at what occurs globally. Another consideration is how the product is measured at the time 

of sale. Perhaps most importantly, and in keeping with the Treaty of the Meter, measurements made in 

commerce must be traceable to the International System of Units (SI). The requirement of traceability 

allows for interstate and international commerce, and provides assurance that a measurement made at 

one location is comparable to a measurement made across the country or around the world. In looking at 

the method of sale for gasoline, historically it has been sold by volume. It is sold by volume around the 

world, and it is measured and dispensed by volume. NIST has the responsibility for fixing standards for 

measurement. As an example, it can be shown that the unit of volume used in the United States, the 

gallon, is traceable to the SI: One gallon is defined in NIST Handbook 44, “Specifications, Tolerances, and 

Other Technical Requirements for Weighing and Measuring Devices,” as exactly 231 cu in and an inch is 

defined as exactly 0.0254 m, with the cubic meter being the SI unit of volume. Because the SI, the modern 

metric system of measurement, is becoming the dominant measurement system used in international

commerce, NIST Special Publication (SP) 811, “Guide for the Use of the International System of Units (SI),” 

and NIST SP 330, “The International System of Units (SI),” are the legal interpretations of and guidelines 

for the use of SI in the United States. NIST definitions of measurement units can be supported and verified 

throughout each level in the hierarchy for traceable measurements.

Although it is a more complicated measurement, the same logic can be applied to the sale of natural gas 

as a vehicle fuel (Compressed Natural Gas [CNG] or Liquefied Natural Gas [LNG]). Globally, with the 

exception of the United States, the product is sold by mass (kilogram). This is largely because natural gas 

dispensed as vehicle fuel is, for the most part, measured and dispensed by mass. In the United States, the 

product is also measured and dispensed by mass, and the measurement is verified in pounds; however, 

this vehicle fuel is sold in fuel equivalent units (gasoline gallon equivalent [GGE] or diesel gallon equivalent 

[DGE]).

It has been suggested that the most appropriate method of sale of these fuels would be by their energy 

content. This would be analogous to a home owner’s purchase of natural gas heating fuel metered by a 

temperature compensated vapor meter. The owner is billed on the metered usage that is converted to its 

value in therms (a heat value equal to 100 000 Btu [1.05 x 102 MJ] at a specified temperature). However, 

vehicle fueling occurs over a short period of time and the energy content of the fuel depends on the fuel’s 

constituents, source, the season, reservoir of product in storage, etc. How much energy the vehicle can 

glean from a tank of fuel will depend on the engine’s efficiency, vehicle load, terrain, environment, and a 

host of other factors. So, in 1994 both industry and the weights and measures community agreed that 

attempting to establish and maintain a precise conversion between the actual energy content of gasoline 

and natural gas and to maintain and verify the relationship was considered to be an unrealistic task at the 

retail level. 

Over the course of an actual fuel delivery an automatic means should be in place to correct for energy 

content fluctuation which contributes to the variation in energy equivalent content for a fuel product. 

Unfortunately, to indicate an averaged or estimated energy equivalent unit on the fuel dispenser’s total 

quantity display breaks the hierarchy of traceability, which is necessary for rigorous and credible 

measurements. An equivalent unit based on an estimated energy content does not provide the consumer 
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with the measured quantity of product being dispensed, violating the basic principles of measurement in 

trade and commerce.

As a result, the natural gas market is faced with competing desires between sound trade practices and the 

ability to market natural gas in terms to which consumers can relate. One potential solution could be to 

allow for the sale of natural gas by mass (as it is dispensed and measured) and to recognize its marketing 

by the fuel gallon equivalent (for comparison shopping). Supplementary information such as this is used 

to market a variety of products, such as laundry detergent (approximate number of wash loads) or 

shredded cheese (approximate number of cups); however, this “comparison” information is not used as 

the basis for sales.

It has been more than two decades since the community’s move to recognize a conversion value that 

resulted in the creation of a supplemental fuel “unit” of measurement. The supplemental unit is in use for 

CNG fuel advertisement and part of the equation used to calculate the sales transaction. If the community

moves in that same direction to create yet another supplemental natural gas vehicle fuel unit, then the 

community is encouraged to use and document recognized scientific methods for establishing such a 

conversion factor. The 20-year old MOS practice for CNG continues to convert based on a fixed conversion 

factor that was derived using the lowest estimated energy content value for a specific type of fuel; while 

acknowledging that the energy content for a supply of fossil fuel even when it meets a fuel quality 

standard is in a constant state of fluctuation.

In 1993, studies were conducted using averaged energy data to compare one fossil fuel to another, that 

is, the mean natural gas composition based on the Wobbe number and the lower heating value for 

gasoline (i.e., “indolene”), to arrive at a list of possible conversion factors. The factor the community chose

would be applied to the mass metered by the CNG dispenser and converted to the gasoline gallon 

equivalent (GGE) value of CNG for use in the quantity display and then the GGEs would be used to calculate 

the total dollar value for each sale. This practice may not take into account the effect that variations in

thermophysical and other properties of the fuel have in the determination of commercial measurement 

results. Alternative fuels offer safe clean, domestic sources of energy for the United States. It is anticipated 

that the community will receive future requests for ways to make comparisons between other or newer 

alternative fuels. Therefore, it becomes necessary to utilize the most current technology and data to 

provide supplemental comparison information in a uniform and fair manner. This will to avoid confusion 

and giving an unfair advantage to any one fuel sector. The community should be able to point to rigorous 

methodology that can clearly and repeatedly be used to arrive at each conversion factor. The use of a 

supplemental fuel equivalent unit should be studied to determine the impact of reporting quantities to 

other agencies to avoid confusion or the creation of trade barriers because of erroneous use of the term 

or expanding its use into other disciplines where similar principles do not apply.

As noted above, there is one option the community discussed in 2014 that offered some flexibility, where 

natural gas vehicle fuel sales are conducted on the basis of mass in a traceable unit of measurement but 

which also recognized use of separate supplemental fuel comparison information or the fuel gallon 

equivalent (strictly for comparison shopping). In this option, a fixed conversion factor would be recognized 

and used throughout the United States. To permit other than a fixed factor would require monitoring by 

the authorities to eliminate instances of exaggerated claims about a variable fuel supply’s (seasonal, 

comingled storage, etc.) energy content. In February 2015, a new work group was formed that includes 

members from the weights and measures and natural gas communities to review the scientific data and 

other background materials cited in support of the newly proposed values for the conversion of mass 
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measurements of natural gas vehicle fuels to approximate diesel gallon equivalent units. The work group 

at the time of publication of this article had not yet reached a consensus on the data used to arrive at the

proposed conversion factors. NIST OWM encourages the use of reliable and approved measurement 

technology that can be supported (i.e., measurements calibrated and traceable back to SI units) by the 

legal metrology infrastructure. In July 2015, the U.S. standards development process returned a proposal 

to recognize a second fuel “equivalent unit” for the second time. The standards development process 

allows for further consideration of that proposal (or an alternative) by the NCWM Specifications and 

Tolerances Committee (for device requirements) and the NCWM Laws and Regulations Committee (for 

MOS requirements). NIST OWM encourages the community to revisit alternative MOS proposals intended 

as a compromise that would ensure traceability of the units of measurement at the time of fuel delivery 

while offering supplemental information that allows for fuel comparisons.