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01/12/2007 Hot Fuel is a Hot Issue
The trucking community and ordinary motorists are not often seen as having much in common. However they do share a common interest in getting what they pay for when they buy fuel. This common interest has paved the way for the two sides to join forces in a series of lawsuits against major oil companies and fuel retailers, charging them with consumer fraud and breach of contract for selling fuel that was hotter than the industry standard.
When truckers and motorists buy gasoline or diesel fuel they do so by volume – gallons. However as liquids warm up they expand, which means that the total amount of energy in a given gallon of fuel is less at a higher temperature than at a lower one. More than a century ago refiners and regulators settled on 60 degrees Fahrenheit as the national temperature standard for fuel measurement.
Large purchasers of fuel in bulk, such as the U.S. military, buy their fuel at temperature-adjusted prices. In fact, fuel is adjusted for temperature along the entire distribution chain in the United States, except for the final portion of that chain – the gas pump. It is at the gas pump, according to these lawsuits, that truckers and motorists have been getting ripped off to the tune of more than $2 billion a year for decades.
According to the Owner Operator Independent Drivers Association (OOIDA), for the individual trucker averaging 6 miles per gallon, 200 gallons of 98-degree fuel will yield 36 miles less than 200 gallons of 60-degree fuel. That translates to an increased cost of more than $700 a year for the average trucker according to some estimates.
On December 13th 2006 a class-action lawsuit was filed by truck drivers, motorists and the public interest group Public Citizen against 17 oil companies and refiners in 7 States. This was quickly followed by other suits filed in California, Kansas and Missouri, bringing the total number of oil companies and refiners currently being sued to 20, with the likelihood of more being added as additional lawsuits are filed. The courts in multiple jurisdictions are considering whether to consolidate all of these suits into a single class-action lawsuit.
The basis for the lawsuits is the fact that when fuel is dispensed from the pump the control settings on that pump are set for a fuel volume of 1 gallon at 60 degrees F. The fuel however is seldom if ever at 60 degrees. It is often much warmer, as much as 90 to 100 degrees in the Midwest, West and South during the summer months. In Kansas City this past Summer for example, 90 degree fuel temperatures were common. At that temperature a 200 gallon fuel purchase actually amounts to the energy equivalent of just less than 197 gallons.
The National Institute of Standards and Technology (NIST) is the federal government agency in charge of measurements and standards. From 2002 to 2004 NIST surveyed fuel temperatures at more than 1000 retail fuel stations across the country. The results of the study showed that the average fuel temperature in the U.S. (over a full year period) was almost 65 degrees at the time of sale. Those 5 degrees above the 60 degree standard are estimated to be the energy equivalent of 760 million gallons a year, or roughly $2.3 billion in consumer overcharges at current prices.
The oil industry doesn’t deny that the fuel temperature problem exists. However it asserts that applying the technology to fix each and every pump across the country would cost far more than leaving the situation as it is. “You put significant cost on the industry for virtually no gain,” said Dan Gilligan a spokesman for the Petroleum Marketers Association of America, the industry trade group that represents independent gas station operators.
That argument would carry a bit more weight say industry critics, if the oil industry had not been so quick to adopt fuel pump temperature compensation technology in Canada, where the colder temperatures result in a loss of revenue for the oil companies. Since 1990 the oil industry has vigorously embraced retrofitting gas pumps in Canada to compensate for colder fuel. Companies that market the retrofitting kits promote them to gas station owners with sales pitch’s touting the increase in profits that will be seen by marketing warmer fuel. “Don’t let your profits drop with the temperature…Gas stations are losing millions of dollars due to temperature variations..until now” says one such brochure.
One area of the U.S. that has not waited for judicial or Congressional action is the State of Hawaii. During the energy crises of the 1970s Hawaii attempted to take into account its naturally hotter temperatures, and mandated that instead of the 60 degree standard, fuel dispensed in Hawaii would use an 80 degree standard. The result is that a Hawaiian gallon of gas contains 234 cubic inches of fuel, rather than the 231 cubic inches of fuel standard in the rest of the country.
What are the chances of the oil companies instituting fuel temperature adjustment on their own? Not very likely according to Steve Everly, award-winning author of a recent article in the Kansas City Star that focused attention on this subject. “Even with gas prices at record levels and major oil companies posting record profits, Congress has been reluctant to take on the industry,” wrote Everly. | 
