California governor signs bill to study ‘hot fuel’ issue

| Tuesday, October 16, 2007

A bill signed into law in California calls for a study to analyze the problem of “hot fuel” in the state along with possible solutions to make sure consumers get what they pay for at the pump.

Federal government standards define a gallon of fuel as being 231 cubic inches at 60 degrees. The 60-degree mark is a century-old standard for the petroleum industry. When fuel is warmer than the temperature threshold, price becomes an issue for consumers because the amount of energy produced drops, meaning fewer miles to the gallon.

The issue is particularly troublesome in California, where the weather is consistently warm and truckers and others pay among the highest fuel prices in the nation. During the state’s summer months, fuel expansion was expected to cause consumers to overpay for fuel by $228 million, the Los Angeles Times reported.

Gov. Arnold Schwarzenegger signed the bill – AB868 – into law Oct. 10. It requires a survey and cost-benefit analysis and recommendations to the Legislature about future legislation and regulations regarding the reference temperature for fuel dispensation. The information must be submitted by Jan. 1, 2009.

The bill requires the California Energy Commission, in partnership with the Department of Food and Agriculture and the state Air Resources Board, to conduct the research. Information will be collected during routine dispenser inspections.

The issue of hot fuel is drawing attention nationwide. A recent congressional subcommittee met to point a critical finger at fuel retailers and oil companies for profiting from retail gas and diesel sold at temperatures topping 60 degrees.

Supporters of protections for consumers, including the Owner-Operator Independent Drivers Association, contend that automatic temperature-compensation equipment should be installed on all U.S. fuel pumps. That would be the best way to ensure consumers truly get their money’s worth at the pump.

Advocates for the equipment point out that such technology exists in Canada, where average fuel temperatures are generally below 60 degrees. In Canada, retailers and oil companies installed the equipment voluntarily after determining that cool fuel was eating into their profits.

To view other legislative activities of interest for California in 2007, click here.

– By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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