By David Tanner
A growing number of individuals and groups are calling for oil companies and retailers to sell a consistent amount of fuel energy, regardless of temperature, and end the sale of “hot fuel” to consumers.
And why wouldn’t they? A congressional subcommittee released a study June 8 claiming that hot
fuel – defined as retail gasoline and diesel sold above a national 60-degree standard – could cost consumers $1.5 billion this summer alone.
Land Line has the latest on who the top players are and what they’ve done to push the hot fuel issue into the public light.
A number of influential lawmakers have embraced the hot-fuel issue, beginning with the first ever House subcommittee hearing on the topic June 8 on Capitol Hill.
“As you are aware, a recent report conducted by subcommittee staff indicates that this practice will cost the American consumer an estimated $1.5 billion in the summer of 2007 alone,” Rep. Dennis Kucinich, D-OH, stated in a letter sent to the National Conference on Weights and Measures. He is the chairman of the Subcommittee on Domestic Policy of the U.S. House Committee of Oversight and Government Reform,
Several House members who were at the hearing along with three senators – all Democrats – sent the letter to Weights and Measures Chairman Michael Cleary to call for a policy to require fuel retailers to place temperature-compensation equipment on all retail pumps.
As it stands, players in the petroleum industry compensate for temperature fluctuations at all stages of trade, except retail.
“This is simply unacceptable,” Kucinich wrote.
Co-signing the letter were House members Elijah Cummings of Maryland, Danny Davis of Illinois, Diane Watson of California, Peter DeFazio of Oregon, Jim Moran of Virginia, Charles Wilson of Ohio, Raul Grijalva of Arizona, John Hall of New York, Betty Sutton of Ohio, and Mazie Hirono of Hawaii.
Democratic Sens. Claire McCaskill of Missouri, Barbara Boxer of California and Frank Lautenberg of New Jersey also signed the letter.
As that was happening, the Senate nixed a proposed amendment filed by McCaskill to the Creating Long-Term Energy Alternatives for the Nation Energy Act of 2007 that would have required automatic temperature-compensation equipment on all retail fuel pumps within five years.
Kucinich called a second subcommittee hearing for July 25 to get oil company executives to testify from Shell Oil Co. and ExxonMobil Corp. They declined invitations to the first hearing.
That got the attention of Rep. Henry Waxman, D-CA, chairman of the U.S. House Committee on Oversight and Government Reform, who promised subpoenas if the oil executives chose not to testify.
Oil companies have tremendous influence on Capitol Hill. Their spokespeople routinely say that installation of temperature-compensation equipment on all pumps would be cost-prohibitive or that consumers do not lose any more from hot fuel than they gain with cold fuel.
Shell Oil spokeswoman Karyn Leonardi-Cattolica told Land Line that a company representative was planning to testify before the Domestic Policy Subcommittee on July 25. Representatives from Exxon-Mobil Corp. did not return calls from Land Line.
Another company, California fuel retailer Tesoro Corp., decided to go public in July to inform consumers about the thermal expansion of fuel in warm temperatures. The story first appeared in Oil Express, a trade publication.
“Tesoro did make a business decision to apply decals on our pumps in California,” Tesoro spokeswoman Sarah Phipps confirmed to Land Line. “However, we want to make it clear that we are squarely aligned with the industry on there being no merit to the hot fuels claims.”
The Tesoro decals will state: “This pump dispenses motor fuel by volume measured in standard gallons (231 cubic inches), as certified by the California Division of Measurement Standards, without adjusting for possible variations due to temperature or other factors which may affect the energy content of each standard gallon dispensed.”
OOIDA’s John Siebert
Rep. Kucinich gave kudos to OOIDA Foundation Project Leader John Siebert for being the discoverer of hot fuel during the June 8 hearing before the Domestic Policy Subcommittee.
“It’s not much of a stretch to say that Mr. Siebert is the discoverer of the issue that brings us here today,” Kucinich said. “While hot fuels were well-known to the petroleum industry and weights and measures professionals, Mr. Siebert was one of the first civilians to figure it out.”
While conducting fuel-related research for the OOIDA Foundation, Siebert and enlisted owner-operators noticed a trend emerging with temperatures at the pump. He passed those findings on to the media and the National Conference on Weights and Measures.
National Conference on Weights and Measures
The National Conference on Weights and Measures, which sets policies for consumer standards, met July 8-12 in Salt Lake City to hash out a large agenda that included whether to issue guidelines for automatic temperature compensation for fuel pumps.
A lot of people had eyes on that conference, including members of Congress.
“Traditionally, this is a state matter, but it’s quite obvious that a lack of performance of National Conference on Weights and Measures for over 20 years would invite a federal response,” Kucinich’s press secretary Natalie Laber told Land Line.
“It is their responsibility and they have failed to live up to that responsibility.”
Siebert presented his findings about hot fuel during the July meeting and has participated in past conference meetings.
In February, a California regulatory board approved temperature-compensation devices designed by Gilbarco Veeder-Root for use in that state, but the company hesitated to bring them to market.
Some believe pressure from the large, integrated oil companies forced Gilbarco to back off, although CEO Martin Grafinowitz denied the allegation when he testified before Kucinich’s subcommittee, saying the decision was caused by a lack of customer demand – the customers being the oil companies and fuel retailers.
Canadian manufacturers and retailers
Fuel-pump manufacturers like Kraus-Global in Canada have an important role in the hot-fuel scenario, even when the fuel isn’t hot at all.
Measurement Canada, the standards authority and policymaking agency for that country, approved a standard temperature-compensation device in 1984, which the majority of retailers rushed to implement when they realized they were losing profits when fuel temperatures averaged below 60 degrees Fahrenheit.
If temperature can motivate retailers to change in Canada, change is possible in the U.S., Siebert and other watchdogs contend.
Reporter Steve Everly
Steve Everly is the award-winning reporter for The Kansas City Star who broke the hot fuel issue to the mainstream public with a provocative series that began in August 2006.
Everly used statistics from the National Institute of Standards and Technology and the OOIDA Foundation to tell consumers that hot fuel costs them between $1.7 billion and $2.3 billion per year.
There’s no denying Joan Claybrook’s fervor for reform. The outspoken president of the consumer advocacy group Public Citizen stands with OOIDA on the issue of hot fuel.
Claybrook has been president of the group, which was founded by Ralph Nader in the early 1970s, since 1982. She was the top administrator of the National Highway Traffic Safety Administration during the Carter administration.
Attorney George Zelcs has been the spokesman for dozens of plaintiffs and the legal eagles championing a number of lawsuits filed to gain class status for consumers against fuel retailers and oil companies.
Zelcs’ firm, Korein-Tillery of Chicago, previously fought and beat big tobacco in a major consumer case. The issue of hot fuel has compelled him once again to take on the big boys.
“It’s an issue that has been effectively bottled up for 20 years and there was no way it was going to get resolved without a lawsuit and a judge’s order requiring the fuel retailers to install automatic, temperature-control devices,” Zelcs told Land Line when the first hot fuel lawsuit was filed Dec. 13, 2006, in U.S. District Court in California.
Judge Kathryn K. Vratil
The Judicial Panel on Multidistrict Litigation ruled June 18 to consolidate 11 other lawsuits that had a lot in common with the California case.
The panel designated U.S. District Judge Kathryn H. Vratil to preside over the consolidated cases in U.S. District Court for the District of Kansas in Kansas City, KS. No court schedule had been set as of press time.
Consumers are demanding class-action status and monetary compensation from fuel companies and calling for automatic temperature compensation at the pump.
Among the people fighting for reform through the legal system are truck drivers like OOIDA members Mark and Becky Rushing from Spearsville, LA.
Fed up with oil companies profiting even more than they already do because of hot fuel, the Rushings helped spearhead the lawsuit in California.
“We’re here not only representing the American truck driver,” Mark Rushing said during a press conference Dec. 14, 2006, “but every American consumer and we want to get the energy in our vehicles that we thought we had been paying for.”