Truckers, Consumer Group Demand To Know Rep. Darrell Issa’s Role in Generating Federal Trade Commission Opinion
OOIDA & FTCR
OilWatchdog.org and the Owner-Operator Independent Drivers Association (OOIDA) have demanded that Rep. Darrell Issa of San Diego release a letter he wrote to the Federal Trade Commission (FTC) requesting its opinion on the “hot fuel” issue. The FTC’s response to Issa was riddled with scientific error and false conclusions, said the consumer-oriented OilWatchdog and OOIDA, which represents independent truckers. See the FTC letter at here
Separately, the groups have requested under the Freedom of Information Act that the FTC release its correspondence and sources for the letter to Issa, dated Aug. 28 and released by Issa Sept. 5.
OilWatchdog, OOIDA and the House Domestic Policy Subcommittee, which is investigating the “hot fuel” ripoff and possible solutions, strongly refuted the conclusions of the Federal Trade Commission letter, signed by chairwoman Deborah Platt Majoras. The FTC letter concludes that the harm to consumers from ‘hot fuel‘, if any, is far too small to warrant FTC action. Yet the letter understates the harm to consumers by more than 90%, said OilWatchdog and OOIDA.
“It is at best careless of Majoras to spout scientific illiteracy about petroleum fuel sales, especially since her previous jobs included legal counsel to Chevron,” said Judy Dugan of OilWatchdog. “Majoras multiplies her error by claiming that consumers ‘may not be harmed’ by hot fuel, and that there is no reason for FTC action. Accurate science clearly shows an energy loss of up to a dime a gallon when gasoline is sold at temperatures of up to 105 degrees.”
Such temperatures have recently been recorded during an investigation by Arizona weights and measures officials. In California, temperatures year-round averaged 75 degrees in a federal study conducted from 2002 to 2004. At that temperature, the energy loss is three cents per gallon when gasoline costs $3.00 at the pump.
“The actual effect of 20 degrees temperature change on a 20 gallon fillup of gasoline is more than a quart,” said OOIDA’s Siebert, “and for truckers who buy diesel fuel 200 gallons at a time, 20 degrees change means 2 whole gallons.” American fuel consumers do not owe the oil companies this unofficial hot fuel tax, especially when there is a technological cure available.
The House subcommittee letter, signed by chairman Rep. Dennis Kucinich, states:
“As you have admitted in the fifth paragraph, the Commission has not conducted an investigation into the matters discussed in the letter. Unfortunately, in the absence of an investigation, [your] staff’s apparent misunderstanding of the issues led to a significant error in calculation. The magnitude of the effort puts into question the validity of many of the assertions and opinions expressed in the letter.
“You state that ‘a variation in temperature of 20 degrees Fahrenheit affects the volume of a typical 20 gallon tank by about 6 tablespoons.’ In a footnote, you continue, “for a consumer refilling a 20-gallon gas tank, a 6-tablespoon fluctuation is equal to 0.1 percent of the total gasoline purchased.”
“In fact, a 20 degree Fahrenheit variation would cause a variation in volume more than 10 times greater than you have calculated. According to the Weights and Measures Program Coordinator and the national Institute of Standards and Technology (NIST), a 20 degree Fahrenheit variation would cause a variation in volume of 1.38 percent, almost 12 times the result the FTC calculated. Rather than 6 tablespoons [3 ounces], the volume variation would be about three-tenths of a gallon.”
Majoras also claims, on the basis of this error, that “It appears that the sale of ‘hot fuel‘ might not cost consumers extra money.”
Kucinich’s letter requests a meeting with Majoras “to discuss the basis for the opinions you have expressed in your letter.” See the letter here.
Majoras was confirmed for the FTC post in 2004 after the Senate declined the previous year to confirm her because of doubts about the ability of a former lawyer for Chevron to fairly oversee oil companies. Majoras’ husband is still a partner in the Jones law firm that represents Chevron.
Senator Barbara Boxer of California wrote to Majoras in May 2004:
“As you may know, at some stations in southern California this week, gasoline hit $3.00 per gallon.
“When I met with [former] Chairman Muris two months ago, he told me that California’s gasoline prices were an ‘anomaly,’ and the FTC was trying to find out why they had increased so rapidly.
“Given what has happened at the pump as well as Shell‘s refusal to help find a buyer for its Bakersfield refinery, I asked Chairman Muris to open a formal investigation. I am still waiting to hear from him on the FTC’s findings.
“I am looking forward to working with you on this issue, and I hope to discuss with you what your plan is to open a formal investigation and continue the FTC’s oversight of gasoline prices.”
Since then, the FTC has at least twice issued “studies” absolving the oil industry of any responsibility for yearly gasoline price spikes to record levels, while refinery profits soared even as gasoline production was constricted. Click here to see a study of refinery supply restrictions by OilWatchdog’s parent organization, the Foundation for Taxpayer and Consumer Rights.
OilWatchdog and OOIDA urge Boxer to initiate an investigation of Majoras’ oversight of the FTC and the commission’s oversight of the oil industry.
“The FTC letter, riddled with error and false conclusions, should be the last straw for Congress, which Rep. Kucinich understands,” said Dugan. “We hope the Senate, which is already considering legislation to fix the ‘hot fuel‘ ripoff (S.1997) will also investigate the FTC’s utter dismissal of harm to consumers by oil companies.”
– 30 –