GREAT! No fuel leaks! Then where is my product going?

Today’s underground fuel storage regulations are quite stringent for all the right reasons! No fuel operator wants to pollute the environment, primarily due to the high financial impact, out-of-control insurance costs, and it’s just plain bad for business and the local communities where they operate!

If you have recently built, or plan to build a new fuel station or travel center, you understand the costs of the latest technology required to do so. From high-tech tank, sump, and dispenser probes, advanced tank monitors, added sensor requirements, and complex tank, fill, and sump designs to allow for sensor monitoring, the cost of construction adds up quickly. These are all great new features that have reduced the amount of underground storage tanks, lines, and dispenser leaks dramatically.

The latest leak detection methods work very well, but several variables remain that negatively impact your fuel inventories. This impact can be as high as 1-2% of sales revenue. The common reaction from fuel operators is “All my tanks and lines are tight, but I am still losing product. Where the heck is my product going?”

The chart below reflects the advantages and disadvantages of each method of leak detection, including sensors, interstitial monitor, SIR, BIR, and ATG-based line and tank testing. The latest technology is very good at detecting and alerting the operator when leaks or sudden, catastrophic losses are suspected but they do very little to address the other costly areas of fuel loss.

Such fuel inventory variances, or suspected losses, can lead to numerous reactions by the operator, including expensive on-site testing, unnecessary upgrades in equipment, site downtime, and loss of business and profitability. Often, the investigation shows no findings and the issue remains. During this investigation, numerous compliance, maintenance, and accounting staff hours were consumed. These investigations are also distractions from other parts of the business and highly inefficient.

Other sources of fuel loss outside of tank and line leaks can include:

• Fuel delivery shortages at the terminal, by the hauler, or by the driver
• Dispenser meter drift
• Incorrect tank charting
• Dispenser theft
• Theft directly from fuel tanks
• Incorrect ratio blends or mapping, causing tank variance irregularities
• Inability to account for transactions during a delivery, resulting in “allowances” for write-off

Such fuel inventory variances, or suspected losses, can lead to numerous reactions by the operator, including expensive on-site testing, unnecessary upgrades in equipment, site downtime, and loss of business and profitability. Often, the investigation shows no findings and the issue remains. During this investigation, numerous compliance, maintenance, and accounting staff hours were consumed. These investigations are also distractions from other parts of the business and highly inefficient.

Fuel losses can arise from various issues across operations, some intentional and others accidental. Here’s an explanation of each listed factor:

 Fuel Delivery Shortages
This occurs when the amount of fuel delivered is less than what is invoiced by the supplier.
Causes: Delivery errors, fuel retention in the delivery truck, or intentional shortages.
Impact: Operators pay for fuel they don’t receive, affecting profitability.
Solution: Monitoring tools like Continual Reconciliation in combination with BOL auditing to compare delivery receipts to actual fuel level changes in tanks.

Dispenser Meter Drift
Gradual inaccuracies in dispenser meters can result in over-dispensing (fuel loss) or under-dispensing (customer dissatisfaction).
Causes: Wear and tear, environmental factors, or improper calibration.
Impact: Financial loss, compliance risk, and reduced trust from customers.
Solution: Continuous reconciliation and monitoring tools detect these discrepancies early for correction.

Incorrect Tank Charting
Tank charts, used to calculate fuel volume based on tank level readings, can become inaccurate due to tank warping, installation errors, or miscalibration.
Impact: Leads to incorrect fuel inventory records, making it harder to track losses or deliveries accurately.
Solution: Recalibration of tank charts and precise monitoring tools ensure inventory accuracy.

Dispenser Theft
Theft occurs when unauthorized individuals tamper with dispensers to take fuel without paying.
Impact: Immediate loss of inventory and revenue.
Solution: Monitoring dispenser activity for anomalies like unexplained reductions in inventory or high flow rates.

Tank Theft
Tank theft occurs when fuel is siphoned or stolen directly from underground storage tanks (USTs).
Impact: Lost revenue and increased safety risks from unauthorized tank access.
Solution: Security measures, including locked access points, alert systems, and continuous monitoring can help to detect unauthorized activity.

Incorrect Ratio Blends
When fuel blends (e.g., ethanol-to-gasoline ratios) are incorrectly mixed, it can cause operational and compliance issues.
Causes: Human error during delivery or faulty blending equipment.
Impact: Financial loss, customer dissatisfaction, and regulatory fines.
Solution: Monitoring systems detect improper blends for quick resolution.

Inability to Account for Sales During a Fuel Delivery
During fuel deliveries, tank monitors may temporarily be inaccurate or offline, making it hard to distinguish between delivered fuel and sales. Or, your current accounting methods have no way to track the dispensed sales made during a fuel delivery.
Impact: This creates reconciliation challenges and may mask losses.
Solution: Systems like continuous reconciliation track sales and inventory simultaneously, ensuring accurate accounting even during deliveries.

By addressing these issues proactively, fuel operators can protect their profits, maintain compliance, and operate efficiently.

For any fuel operator interested in tackling the issue of fuel variance in their operations and taking more profit to the bottom-line, there are options. By employing CITLDS, or Continuous Reconciliation as it is often called, a fuel operator can address the non-leak variances they are incurring today.

Continual Reconciliation employs advanced technology to capture dispenser totalizer metrics, transactional information, and tank monitor-related information in real-time. Such connections can also capture dispenser flow rates and detect dispenser dormancy. Advanced analytics are then used to compare each transaction and series of transactions to ensure that dispenser transactions match physical product leaving the tanks. When discrepancies are discovered, the software will alert analysts to conduct investigations and help to determine the suspected causes.

For Continual Reconciliation to work properly, you must first start with a “clean set of books” or an accurate foundation of metrics. To do so, analysts, using advanced software, will “chart” your tanks to make sure the tank charts are accurate. Over time, tanks may settle or deform, leading to irregularities in conventional fuel accounting systems and SIR leak detection. These irregularities may flare up on delivery days and then balance again on non-delivery days. But this noise can be distracting, disguising other sources of loss, such as dispenser tank theft.

In addition, traditional accounting systems and tank monitors without costly BIR modules do not account for the sales that transpire during a fuel delivery. Continual Reconciliation captures these quantities and applies the amounts to curate fuel delivery amounts.

In summary, leaks are serious and almost every store has some form of tank or line leak detection in place to recognize when a leak is suspected. However, some of the warnings can be latent or so small they only appear over time. Fuel losses can occur at any time from numerous areas of the business and are often confused as leaks since inventory has come up “short”, above your tolerance level or at a failure rate higher than allowed by federal regulations.

Continuous reconciliation and location monitoring can accurately help you to get to the root of non-leak fuel variances quickly, saving staff time and high investigative costs.

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