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Drivers Lose Gas As Temp Rises

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Tue, Mar 4, 2008 at 10:27 am

    Drivers Lose Gas As Temp Rises

    San Gabriel Valley Tribune (California)
    March 3, 2008

    by Alison Hewitt, Staff Writer

    A Matter of Degrees:
    Drivers Get Less in Tank as Temperature of Fuel Rises

    No matter how high gas prices soar this summer, consumer advocates
    believe California drivers could save up to a dime per gallon if
    service stations were required to dispense gasoline at a constant
    temperature.

    The state is studying whether to do so.

    Industry groups counter that the price of retrofitting gas pumps
    would be exorbitant and the cost would have to be passed on to
    consumers.

    A Los Angeles County study suggested that residents don’t get
    about 1 percent of the gas they pay for, at an annual county-wide loss
    of $120 million and 40 million gallons of gas, according to the
    county’s weights and measures department.

    "This was not a huge issue when gas was $1 a gallon," said Judy
    Dugan, research director of the Foundation for Taxpayer and Consumer
    Rights. "Now there’s talk about gas reaching $4 a gallon… that’s
    money you can feel coming out of your pocket."

    The National Association of Convenience Stores, which
    represents thousands of mini-marts and their adjoining gas stations,
    argues that every gas station would pay $2,000-$4,000 per double-sided
    pump to install automatic temperature compensation, or ATC, equipment.
    A gas station could pay as much $32,000 for the average eight-pump
    station.

    "My understanding is the difference between 90-degree gas and
    60-degree gas is between a teaspoon and a tablespoon per gallon," said
    spokesman Jeff Lenard. "The costs of installing these pumps have to be
    passed on to consumers, so it’s not clear it’s worth it."

    Gasoline expands or contracts about 1 percent for every
    15-degree change in temperature, but gas pumps dispense the same volume
    no matter what, said Kurt Floren, Los Angeles County’s Agricultural
    Commissioner/Weights and Measures director.

    The California Energy Commission will hold a hearing today as
    part of a yearlong feasibility study into whether to require gas
    stations to pump more gas in a gallon. This summer, the advisory
    National Conference on Weights and Measures meets to consider approving
    ATC equipment, and to discuss, but not vote on, the need for "slightly
    larger gallons," Floren said.

    "Fuel sales compensated for temperature is the most equitable
    means to transact business," Floren said. "There has been significant
    industry opposition from oil marketers associations in many states,
    largely alleging that the cost-benefit does not exist… so the
    California study, designed to evaluate that very point, has emerged as
    quite important in that debate."

    California counties have measured gas temperatures since April.
    In Los Angeles County, fuel is averaging 72 degrees, Floren said. Gas
    stations buy their gas at 60 degrees, and it expands by 1 percent at 75
    degrees. No law requires gas stations to sell their gas at 60 degrees.

    At a 1 percent loss, spending $40 a week on gas would cost a
    driver $21 a year. Some disputed estimates place annual losses at $480
    million in California, and $2 billion nationwide.

    Figures collected from across the state by the Department of
    Food and Agriculture’s Division of Measurement Standards show an
    average of 71 degrees for regular and high-grade fuel, and monthly
    averages since March have not dipped below 60 degrees. Data compiled by
    the National Institute of Standards and Technology from 2002-04 showed
    a statewide average of 75 degrees, but Carol Hockert, NIST’s chief of
    the Weights and Measures Division, emphasized that the data was not
    collected by NIST and should not be used to draw conclusions.

    And although big oil companies are making record profits, small
    gas stations would pay for ATC equipment, Lenard added. Most gas
    stations are "mom-and-pops" selling brand-name gas but making small
    profits, he argued.

    When county fuel inspector Kanit Vittayavongvanich tested
    temperatures at an El Monte Arco on Thursday, gas at one pump ranged
    from 74.2-75.3 degrees. FTCR supports ATC equipment, which Dugan said
    would be fairest — the advantage goes to gas stations when it’s cold,
    and to consumers when it’s warm.

    "Marketers voluntarily adopted adjusters in Canada because it’s
    cold," she said. "In a state like California where the average
    year-round temperature is 75 degrees, the advantage (without ATC) goes
    to the gas companies."

    However, the discrepancy might be built into the market price
    for gas, argued Jay McKeeman, vice president of government relations
    for the California Independent Oil Marketers Association.

    "The market dictates the price, not necessarily the temperature," McKeeman said.

    If stations were required to sell "larger gallons," the price
    would grow, too, he said. McKeeman praised the California Energy
    Commission’s cost-benefit analysis, saying existing estimates of the
    impact are too informal.

    "By the end of the year, we should have a good idea whether
    this would be a benefit to consumers, or whether it’s just another way
    to add to the price of gasoline," he said.

    The Owner-Operator Independent Drivers Association, a trucking
    organization supporting a class-action lawsuit calling for ATC
    equipment, estimates that a trucker loses 366 gallons a year to gas
    expansion, said John Siebert, project leader with the OOIDA.

    "The industry has accepted our estimate for upgrading the pumps
    to be (ATC) at about $2 billion. It costs the American consumers $2
    billion every year," Siebert said. "So over the last 10 years, they got
    $20 billion they shouldn’t have, but they won’t spend $2 billion to fix
    it."

    The state Energy Commission’s feasibility study will be completed by the end of the year, said spokeswoman Susanne Garfield.
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    Contact the author at: alison.hewitt@sgvn.com or (626) 962-8811, Ext. 2730