Oil Watchdog

SNOWBIRD, Utah — A National Conference on Weights and Measures
committee has turned aside efforts to postpone voting on a fix for "hot
fuel," but approval of the fix is in doubt.

Oil industry pressure has been mounting since January, when the
committee called for a vote at the conference’s annual meeting on a
voluntary system that would allow retail fuel pumps to adjust fuel
volumes for temperature fluctuations.

A vote on the proposal is planned today.

Pressure increased this week as those attending the meeting,
held at the Snowbird ski resort near Salt Lake City, were urged to
postpone the vote for a year so that various issues could be studied.
Several state weights and measures officials who are members of the
conference said they would vote against the measure if it wasn’t
postponed.

But representatives from the major fuel-consuming states of
Texas, California and North Carolina, who held a majority on the
committee, rejected calls for a delay. Saying a more accurate method
was needed, they argued that nothing would be gained by postponing a
vote.

Now is the time, said Roger Macey, an official with the
California Division of Measurement Standards and a committee member,
for the conference to move ahead with the issue. He noted that the
group’s purpose was to ensure accurate measurement in commercial
transactions, and the proposal would provide guidelines to states
planning to introduce fixes.

"As a group that’s what we’re here for," Macey said. "We need to be ahead of the curve. We know it’s coming."

The committee’s decision means that for the first time in the
history of the conference — which is conducting its 92nd annual
meeting — the group will vote on allowing fuel volumes to be adjusted
for temperature at the retail pump.

Even so, the outcome of the vote scheduled for today remains
unclear. Opponents on Tuesday were speaking as though defeat of the
reform effort was a foregone conclusion.

Ross Andersen, the head of New York’s state department of
weights and measures, was among those supporting a delay. He argued
that there should be answers to questions about hot fuel when it comes
back for a vote in a year.

In an interview, Anderson said the decision in January to
proceed to a vote had been rushed and more time was needed to build a
"consensus" on the matter.

The oil industry has opposed any measure to introduce
temperature adjustment for retail customers and said it would cost too
much with little or no benefit for consumers.

Alex Schuettenberg, fuel science adviser for ConocoPhillips
Co., said introducing temperature adjustment at the retail pump would
open Pandora’s box. He said retailers in hot climates such as Texas
were unlikely to voluntarily pump fuel adjusted for temperature because
there was no financial incentive.

"No one is going to want to do it," he said.

But consumer groups object to another year of deliberations.
They argue that the conference was essentially doing the bidding of the
oil industry, which has pushed for more studies of hot fuel.

Judy Dugan, research director of the Foundation for Taxpayer
and Consumer Rights in Santa Monica, Calif., countered that hot fuel
was costing consumers billions of dollars annually in additional fuel
costs. She said delaying action by this "supposedly independent group"
was unwarranted. "To say this issue needs more study is simply
duplicitous," Dugan said.

The possibility that the conference would not be more
aggressive in dealing with hot fuel also appeared to trouble the
group’s chairman, Michael Cleary, whose term ends on Thursday. Cleary
said a fix for hot fuel was going to be a "reality in the marketplace
whether we like it or not," adding that regulators would regret not
proceeding with a decision.

"I think we’re going to be sorry for it," he said.

The Kansas City Star last August began publishing a series of
stories about "hot fuel" and how, at current prices, consumers
nationwide pay an estimated $2.3 billion annually more for fuel.

The physics of hot fuel are fairly simple. Fuel expands and
contracts depending on temperature. At the longtime industry standard
of 60 degrees, the 231-cubic-inch U.S. gallon puts out a certain amount
of energy. But fuel is often sold at much higher temperatures, causing
the fuel to expand and the amount of energy to decline for each gallon
dispensed. Indeed, a study by the National Institute of Standards and
Technology found that the nationwide, year-round average temperature of
retail fuel was 64.7 degrees.

At other stages in the fuel delivery chain, the industry
routinely adjusts volume for temperature change using the 60-degree
industry standard. But retail pumps in America make no adjustment for
changes in the volume caused by temperature, so consumers get only 231
cubic inches per gallon regardless of temperature.

The issue has received increasing attention in recent months.
More than three dozen lawsuits have been filed, and Congress has held a
hearing on the topic. Another congressional hearing is expected in the
next few weeks.

Last week, 14 members of Congress sent the National Conference
on Weights and Measures a letter urging that it act on helping fix hot
fuel.

The effect of the letter was unclear. Some of those attending
the annual meeting said they were worried that if the conference didn’t
act, that the federal government would take a more active role. But at
least some were disdainful of the letter, which they considered
regulatory meddling. "They’re nuts," declared one weights and measures
official before tossing the letter aside.

The National Conference on Weights and Measures establishes
model measurement codes that states can adopt. Its members include
government officials and industry representatives, but those who vote
on the proposed codes are state weights and measures officials.

The group’s influence comes from producing guidelines that will
ensure uniform measurement standards throughout the U.S. For instance,
the hot-fuel proposal, if approved, would prevent fuel retailers from
frequently switching back and forth between adjusting fuel volumes for
temperature or not. This would prevent using one method in the summer
and another in the winter.

But states are not prevented from acting on their own if the
conference does not act. This possibility is rising along with mounting
evidence that the hot-fuel problem is real and perhaps more serious
than initially thought.

Stephen Benjamin, who oversees weights and measures in North
Carolina, said the state had done its own study of fuel temperatures
since The Starpegged that state’s annual average fuel temperature at 69
degrees.

North Carolina collected fuel temperatures on 100 stations
using data that covered a year and confirmed the newspaper’s findings.
Indeed, state officials were surprised that winter fuel temperatures
weren’t as low as expected, never dipping below 60 degrees.

California officials also said they have been surprised by the
findings of their own study. California regulators are finding fuel
temperatures as high as 105 degrees, with the hottest summer weather
yet to come. As in North Carolina, California officials said fuel
temperatures aren’t dipping as much as expected in cooler months.

What’s next: The National Conference on Weights and Measures considers "hot fuel" issue.

To read the entire hot fuel series, go to www.KansasCity.com.

To reach the author Steve Everly, call 816-234-4455 or send e-mail to [email protected]