Hot Fuel study fires up anger

posted on:
May 23, 2008

author:
Elizabeth Douglass

category:
Environmental

Soaring gasoline prices are bad enough. But this summer, California’s higher temperatures could add an additional 8-cent-a-gallon wallop because pumping warmer fuel gives motorists less energy per fill-up.

“Consumers are paying through the nose for gas today, and they’re really angry,” said Public Citizen President Joan Claybrook, who at a Thursday news conference urged consumers to back proposed federal legislation that would require gas pumps to take account of fuel’s tendency to expand in warm temperatures.

Because of the so-called hot fuel phenomenon, she added, this summer “just about everyone will be overpaying for the gas that they purchase.” Claybrook said the temperature hit could cost customers an extra $3 billion nationwide.

In fuel-hungry California, where the statewide average gasoline price passed the $4-a-gallon mark Thursday, a new survey showed that motorists could be overpaying by as much as $3.4 million a day during the summer months.

“It’s a significant number, and one that we shouldn’t be paying,” said Judy Dugan, research director at Santa
Monica-based Consumer Watchdog, formerly called the Foundation for Taxpayer and Consumer Rights. “With every rise in the price of gas, hot fuel becomes a more important issue.”

For consumers and companies struggling with their fuel bills, the added insult of a hot-fuel penalty is unwelcome.

“It irritates me because I don’t think it has to be that way,” said Jim Aasen, who owns Montrose-based Crestmont Appliance Service. Last year, the monthly gas bill from all his house calls jumped to $425, up $100.

“When that happened … I raised my service call charge by $20,” he said. Now that $4-a-gallon gas threatens to boost his costs further, Aasen said, “I might have to do it again.”

The science behind the hot-fuel controversy isn’t in dispute. The U.S. government defines a gallon of gas this way: At 60 degrees, a gallon is 231 cubic inches. But when fuel is warmer than 60 degrees, the liquid expands, yielding less energy per gallon. When it’s colder, the fuel contracts.

Gasoline expands or contracts 1% for every 15-degree change in the fuel’s temperature. Diesel volumes change 0.6% per 15-degree change.

The phenomenon – and the economic effects of it – is so well known that U.S. oil companies and distributors track the temperature of the fuel they sell one another and adjust the total bill to conform with the 60-degree standard.

Gas stations and truck stops don’t have temperature-compensating devices, so the pumps dispense each gallon as if it is flowing at 60 degrees – and the stations charge customers as if they are getting government-standard gallons.

There is nothing illegal about the practice. It’s been allowed for decades by measurement regulators who assumed that retail fuel temperatures stayed close to the government standard most of the time, and that any losses from hot fuel in the summertime would be offset by gains in the winter.

California’s new study, which sampled fuel temperatures around the state during a 12-month period, found that gasoline temperatures were almost always well above the 60-degree standard.The year-round average temperature was 71.1 degrees.

Calculating how much money consumers lose in the process isn’t easy, though, because the amount of the
overpayment depends on the temperature of the fuel and the retail price of gas, and both are in constant flux.

“It’s the equivalent of the grocer taking your meat into the back room to weigh it and putting his thumb on the scale,” said Dugan of Consumer Watchdog. “With gasoline, everybody has their thumb on the scale.”

Consumer groups and trucker organizations – some truckers have sued oil companies over the issue – have urged state and federal officials to force gas stations to install equipment that would rectify the problem. The possibility is being studied in California.

Sen. Claire McCaskill (D-Mo.) introduced legislation in August that would require all new and upgraded retail fuel pumps to be outfitted with automatic temperature-compensation equipment.

In Canada, where cold weather would give consumers the advantage at the pump, most fuel retailers were quick to invest voluntarily in the devices. And Hawaii requires retail pumps to dispense fuel on the assumption that it is 80 degrees instead of the standard 60 degrees.

A coalition of service-station retailers and truck-stop operators has been fighting back, arguing that the equipment is expensive and that there is no evidence that consumers are being cheated.

“If everybody has to put on temperature correction equipment … that expense is going to be passed on to the customer in the price of gas,” said Jay McKeeman, a vice president at the California Independent Oil Marketers Assn., a trade group for gas station owners and others. “What we don’t know is whether that cost to the customer will be offset by the benefit. In our estimation and evaluation, it won’t.”

The state has approved one temperature-adjusting device for sale in California, and measurement rules allow any station to install the equipment voluntarily. McKeeman’s group wants to prevent that too.

In February, his group wrote state measurement officials urging them to “immediately adopt emergency regulations” to prohibit any retailer from installing the temperature-adjusting devices.

elizabeth.douglass@
latimes.com

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