Oil Watchdog

CHICAGO, IL — The fight over hot fuel came to a boil this week.

A committee of the National Conference on Weights and Measures, meeting in Chicago, said the technical obstacles to converting retail pumps to adjust for temperature were not as serious as once thought and could be easily overcome.

That conclusion was a breakthrough for the regulatory group,
which has struggled for decades with the issue of hot fuel — the fact
that gasoline and diesel expand as they get hotter, lowering their
energy value per gallon.

The committee’s positive technical findings, however, were
soon overshadowed by a furious response from industry representatives
in the audience, who outnumbered the five committee members
three-to-one.

A Washington lobbyist, an American Petroleum Institute official
and other industry representatives led the opposition to any fix,
saying it would not help consumers, would be costly to implement, and
would unleash untold lawsuits.

The committee, whose role was to work out the details of how a
fix would be implemented if eventually approved, was instead urged to
reconsider whether the change should be made at all.

"This is an opportunity to go back and examine the economics,"
said Prentiss Searles, a senior associate with the American Petroleum
Institute, an oil industry trade group.

The agenda was changed to include a debate on whether a fix was
needed. Searles was allowed to write down the comments from the
proceedings, listing the pros and cons of the issue, which will be
given to weights and measures officials for their consideration.

"It’s a hijacking of the meeting," Judy Dugan, research
director for the Foundation for Taxpayer and Consumer Rights, told
those attending the meeting. "This is intimidating."

The maneuvering came nearly two months after a vote of the
National Conference on Weights and Measures — a group of state
regulators that sets standards for states to follow — fell just short
of the absolute majority of its membership needed to approve a hot fuel
fix.

Though some regulators have pondered the issue for years, hot
fuel started gaining national attention last August when The Kansas
City Star began a series of articles on the subject. The reports
estimated that U.S. consumers were being overcharged $2.3 billion a
year because so much fuel is sold above the industry standard of 60
degrees. 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.

In the past year the issue has gotten increased attention from
the national conference, dozens of lawsuits have been filed on behalf
of consumers and congressional hearings have been held. This month Sen.
Claire McCaskill, a Missouri Democrat, introduced legislation that
would require pumps to adjust for temperature; her bill included a
trust fund to help many gas stations pay for converting their pumps.

At the national conference’s recent meeting, some objections to
the proposal for temperature adjustment stemmed from concerns about
technical issues such as determining the density of fuel and
difficulties in inspecting the equipment that makes the adjustment.

A committee was set up to collect more information on those and
other issues that would need to be handled if retail fuel is dispensed
adjusted for temperature.

That committee’s three-day meeting in Chicago, which ended
Wednesday, was meant to share the committee’s findings and get
reaction. The findings now will go to the conference’s four regional
groups, which each meet during the year, and to the national
conference, which has an interim meeting in January and its annual
meeting in July.

Besides oil industry and consumer group representatives,
several other regulators who are members of the national conference
attended the committee meeting this week.

The industry representatives, who ranged from gas-station
owners to big oil company officials, were largely silent on the details
of what was needed to implement a hot fuel fix, preferring instead to
say it was not needed. In some instances, they did comment on why they
thought certain proposals would not work.

Industry representatives also mentioned a National Academy of
Sciences study on the cost and benefit of adjusting fuel for
temperature, and they urged committee members to consider it.

Sarah Dodge, vice president of government affairs for the
National Association of Truck Stop Operators, said the study would be
completed in September or October.

But Bill Kearney, a spokesman for the National Academy of
Sciences, in a telephone interview said there "is no study at this
point." There have been discussions with a House committee, Kearney
said, but no decision has been made and no money provided for a study.
Moreover, the academy would be unlikely to do a cost-benefit analysis.

"We would stick to the science," he said.

Most of the state weights and measures officials who attended
the Chicago meeting voted against or abstained from voting on
temperature adjustment at the conference’s meeting in July. Three of
the five committee members did as well.

Nevertheless, progress was made on the technical issues, which were once seen as major concerns.

One committee member’s recent trip to Canada, which has been
adjusting fuel for temperature for about 20 years, settled concerns
about the inspections. The only additional equipment required by an
inspector would be a $250 thermometer, and the additional time needed
was not as much as expected.

"We can do this easily," said Ross Andersen, the head of New
York state’s weights and measures department and a member of the
committee.

The density of fuel was also viewed at the July annual meeting
as a major problem because fuel can have different densities, which
affects the adjustment needed for hot fuel. That was solved by
recommending that an average be used.

The committee did struggle with reaching a recommendation on
whether the fix for hot fuel should be mandatory or voluntary. That
issue probably will be left to the national conference and its regional
associations.

The committee’s meeting wrapped up Wednesday morning with
encouragement for everyone involved to share views, including those
representing consumers and independent truckers.

Judy Cardin, chairwoman of the National Conference on Weights
and Measures, said all viewpoints were needed on what is considered the
major issue facing the conference.

"Thank you all for being here," she said. "This clearly is not an easy decision."
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To reach Steve Everly, call 816-234-4455 or send e-mail to [email protected]