The Kansas City Star
Oahu, Hawaii — Idyllic weather, pounding surf and a warm, welcoming culture help make Hawaii unique in this nation.
So does its gallon of gas.
The Hawaiian gallon contains nearly 234 cubic inches of fuel — about three cubic inches more than is dispensed in the rest of the United States.
The extra volume, required by state law, helps offset the hotter temperature in this tropical climate, which causes the gasoline to expand. If the gallon wasn’t temperature-adjusted, Hawaiians would receive less energy per gallon than called for under the government standard. That’s because for nearly a century, gasoline and diesel have been dispensed across America at a more-condensed 231 cubic inches — based on the assumption of a fuel temperature of 60 degrees.
The larger Hawaiian gallon saves consumers in the state millions of dollars a year. But across the rest of America, consumers will lose an estimated $2.3 billion this year because of “hot” fuel. No other state adjusts for temperature fluctuations when dispensing fuel, including warm-weather states such as California, Texas and Florida, where drivers lose hundreds of millions of dollars a year.
In fact, few consumers even realize that they’re not getting what they pay for when they fill up at the pump. That’s because no national law requires retail station owners to sell fuel at the government standard of 60 degrees, or use pumps that adjust to reflect the hotter fuel.
That omission might seem odd, especially considering soaring gas prices and record oil industry profits. As Hawaii proved, states can take action to address the hot-fuel problem. Congress can step forward to require temperature compensation. And the industry itself could push for the change.
But don’t count on it.
The bigger Hawaiian gallon, which assumes a fuel temperature of 80 degrees, was introduced during the energy crisis of the 1970s. At the time, state officials considered it a temporary measure until the United States required fuel pumps that would automatically adjust the volume of gasoline and diesel to conform to the official standard.
They’re still waiting.
“We never gave it a second thought,” says George Mattimoe, former head of Hawaii’s department of weights and measures. “We thought the pump guys would do it.”
Instead, the energy industry has repeatedly blocked efforts in America to install retail fuel dispensers that automatically adjust for temperature change. The American Petroleum Institute (API), which represents the industry, contends it would cost too much to fix the problem. Moreover, it believes that consumers don’t want to be bothered by pumps that adjust the size of a gallon to make sure they get the same amount of energy no matter what the temperature.
“We’ve never supported it for retail” in the United States, says Michael Belue, a consultant for API.
Ironically, the industry takes the opposite stance in Canada, where cold temperatures give it a financial incentive to adjust the volume of gas at the pump and make more money. Nearly all fuel sold at retail outlets in Canada has been temperature-adjusted for years.
In retrospect, Mattimoe, who is now 83 and retired, says he isn’t surprised nothing has changed in this country. He says he should have taken the hint from the reception he got from Big Oil to a contraption that still sits in his garage in Oahu.
Mattimoe repaired radar units on Curtiss Hell Diver planes during World War II and is something of a gearhead. In the 1970s, tiring of the debate over whether fuel pumps could be automated to accurately adjust for temperature change, he went ahead and invented a solution.
The state of Hawaii was so impressed it obtained a patent on his work. Then he crated up his adjusting pump and hauled it to an industry conference in San Diego.
Today, George Mattimoe’s temperature-adjusting pump still gathers dust in his garage. But two American companies produce similar pumps, which are widely used by the energy industry — in Canada.
Profits and motives
API has argued for decades that the hot-fuel problem isn’t worth fixing because the “negligible” benefit to consumers doesn’t justify the “undue burden” of the industry’s cost to fix the problem.
“It doesn’t make sense” financially, says Prentiss Searles, a senior associate for marketing issues at API.
The industry acknowledges that it doesn’t have a specific estimate on how much it would cost to retrofit or replace the nation’s pumps to adjust for temperature change.
Moreover, pump industry experts point out that oil companies and other gas marketers regularly replace pumps for various reasons. Thanks to innovations in technology, adding an automatic temperature-adjustment control to a dispenser would be just a small part of the total cost.
For example, Lucy Sackett, marketing manager for Gilbarco Veeder Root Inc., a pump manufacturer in Greensboro, N.C., says adding an automatic temperature control to a dispenser would cost $1,105 to $1,975 per pump.
At that cost, the onetime price to fix the nation’s hot-fuel problem would be between $1.4 billion and $1.9 billion. And that expense would likely be spread out over several years.
API’s argument that it would cost too much to fix the hot-fuel problem is echoed by the Petroleum Marketers Association of America, based in Arlington, Va., which represents independent gas station operators.
“You put significant cost on the industry for virtually no gain,” says Dan Gilligan, president of the marketers association.
Indeed, the industry’s view of the cost may also include the $2.3 billion in revenues oil companies and gas marketers take in annually from consumers because of hot fuel. Yet, no matter what the true cost may be, one thing is certain: With high gas prices and record oil company profits, there is plenty of money available to fix the problem.
Five of the largest oil companies — BP PLC, Chevron Corp., ConocoPhillips, Exxon Mobil Corp. and Royal Dutch Shell PLC — recently reported combined second-quarter earnings of $34.6 billion. By way of perspective, that means even The Star’s high-end estimate of $1.9 billion to fix the hot-fuel problem is the equivalent of just five days of those companies’ second-quarter profits.
So, what would it take to make the temperature-adjustment change in the United States?
Weights and measures regulations have mainly been the responsibility of the states since the country was founded. The National Institute of Standards and Technology, a federal agency, offers technical assistance to the states, but doesn’t have any enforcement powers. So states look to the National Conference of Weights and Measures, attended largely by state regulators and industry officials, to agree on model codes for states to adopt.
Many state regulators agree that temperature compensation is the most equitable way to sell fuel at every stage of the energy delivery system. Yet the conference’s annual meeting in July adjourned with little optimism that anything would happen soon. The reason is simple: the conference strives for consensus, and the industry doesn’t want adjustable fuel pumps.
“In a perfect world there would be temperature compensation,” says Steven Malone, administrator of Nebraska’s weights and measures department. “But the industry is going to oppose it because they are going to have to see a benefit.”
Even so, there have been some industry stirrings in favor of temperature adjustment. A few truck-stop operators have made inquiries about purchasing pumps that adjust for temperature. Those operators reckon they might have a marketing advantage by saying they play it straight with truckers in selling accurately dispensed fuel regardless of the temperature.
But most observers say independent truckers and a few truck-stop operators probably don’t have the clout to change policy across the country. They contend that consumers need to be heard on the topic.
Consumers “would have a significant influence,” says Henry Oppermann, who retired last year as chief of the weights and measures division at the National Institute of Standards and Technology.
Congress can also step in to require temperature adjustment. The Fair Packaging and Labeling Act of 1966, for instance, imposed uniform rules on how the weight or measurement of packaged products is displayed so that consumers could more easily make an informed choice.
Constitutional law experts say a similar move by Congress to impose temperature compensation on retail fuel sales would probably be within its authority.
“Congress has authority to regulate interstate commerce,” says Peter Enrich, a professor of law at Northeastern University in Boston and a former clerk for Supreme Court Justice Stephen Breyer.
“This is unquestionably interstate commerce,” Enrich says. “I think the short answer is that Congress would have wide authority to enter this area.”
Such a move, however, would face a difficult path politically. Even with gas prices at record levels and major oil companies posting record profits, Congress has been reluctant to take on the industry.
“A majority of members have shown little interest in legislation that’s in the consumer’s interest,” notes Tyson Slocum, head of the energy program at Public Citizen, a consumer advocacy group in Washington.
Given the regulatory inertia of the National Conference on Weights and Measures and the perceived reluctance of Congress in taking on the industry, most temperature-adjustment advocates say states need to step up.
Despite the longstanding preference for consensus and uniformity in weights and measures issues across the country, a state could even craft its own rules — just like Hawaii did when it increased the size of its gallon to adjust for warmer fuel temperatures.
But even one of California’s top weights and measures officials is pessimistic about temperature compensation of fuel. Dennis Johannes, assistant director for California’s weights and measures department, says hot fuel is an issue that consumers simply don’t understand.
And he predicts that if the industry did agree to temperature-adjusted fuel, fuel marketers “would just raise prices to make up the difference.”
Independent truckers, who are coming to grips with the growing cost of hot fuels, say such attitudes sell consumers short. They contend that once consumers realize how hot fuels are costing them money, they’ll demand to be heard.
“If they want some informed consumers, then they’re going to get them,’ vows John Siebert of the Owner-Operators Independent Drivers Association in Grain Valley.
“It’s time to get this done.”
Go to KansasCity.com to read more about hot fuel and Big Oil’s position on the issue.
The Star’s $2.3 billion estimated annual cost to consumers from hot fuel is based on fuel storage tank temperature data, the impact of varying temperatures on fuel volumes, and state-by-state consumption data.
The fuel temperature data was gathered by the National Institute of Standards and Technology from storage tanks at 1,000 gas stations and truck stops in 48 states and the District of Columbia during a period from 2002 to 2004.
The NIST data revealed that the average temperature of fuel across the country and year-round was 64.7 degrees Fahrenheit — almost 5 degrees higher than the government standard of 60 degrees.
As a liquid, gasoline expands and contracts depending on temperature. At the 60-degree standard, the 231-cubic-inch American gallon delivers a certain amount of energy to your engine. But that same amount of gas or diesel fuel expands at higher temperatures, to about 235 cubic inches at 90 degrees. Yet consumers still get only the 231 cubic inches at the pump.
The Star estimated how much fuel sales were affected in each state based on the state’s average fuel temperature and how much fuel volume would expand or contract under those conditions. In most states, consumers got less energy per gallon than they were paying for because fuel temperatures were hotter than the standard. That translates into lower gas mileage — and more fill-ups down the road. In some cold-weather states, drivers actually got a bit more energy per gallon because their gas was cooler than the standard.
The resulting state-by-state consumption change figures were then multiplied by the prevailing gas price in each state as reported during the last week of July by AAA. Those state-by-state gas figures were then combined with national figures for diesel consumption and price to arrive at the $2.3 billion nationwide estimate.
About the series: The Kansas City Star reviewed hundreds of industry and government documents going back nearly a century, traveled across the country, and interviewed scores of government, industry and consumer sources to assess the impact of temperature on fuel. Data on fuel temperatures was collected from the National Institute of Standards and Technology and the Owner-Operator Independent Drivers Association. The Star also tested the temperature of fuel samples taken from Kansas City area gas stations.
The author Steve Everly, a reporter for The Star since 1987, has covered the energy and utility industries extensively for the last decade. Everly, 56, was a Gerald Loeb Award finalist in 2000 for his reporting on defective water heaters. His stories on Aquila Inc. bonuses, natural-gas pricing and the nation’s tightening oil refinery capacity have received several state and regional journalism awards. He is a graduate of the University of Missouri-Kansas City.