Detailed records of sales, deliveries, and daily inventory are kept at retail petroleum outlets. A superficial review of these records can sometimes be sufficient to identify a major leak. However, to determine if there is a chronic small leak or minor pilferage requires that we know what the inventory record for a tank without losses should look like, so that we can indentify discrepancies. This paper describes a model to determine what the cumulative variance in volume should be for a tank without losses. The cumulative variance is the sum of the daily variance, which in turn are the difference each day between the record of inventory, deliveries and sales. There are at least three reasons why a cumulative variance different than zero can occur, even in an intact tank: Product already metered as "sold" is recaptured by the vapor recovery system and returned to the tank, There is a volume change because product is delivered from an above ground depot and then stored in below ground tanks at a different temperature, and Gasoline may be blended from several tanks at a ratio that is slightly different than what is intended showing up as a "loss" in one tank and a "gain" in another.
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