By The Hill Staff - 05/01/07 07:47 PM EDT
Last summer, oil companies faced lawmakers’ ire over high gas prices. This year, the temperature of the gasoline could put more heat on the industry.
It turns out that the two — the price and temperature of gas — are related. Gasoline contracts in cold weather and expands in hot. The pump price, though, is based on a standard of 60 degrees. So on a sweltering day, District drivers likely get less energy from a gallon of gas than they’ve paid for.
The issue has sparked a lobbying push from a number of groups to influence the conference, which could recommend to states that they adjust for gas temperatures through specially designed pumps.
Congress is also taking a closer look, driven in part by the ascension of lawmakers from warm states such as California to top slots on key committees and recent press accounts concerning the hot fuel issue.
Industry groups are arguing that there is not enough data on how much hot fuels are costing customers to justify the costs of installing pumps that adjust for temperature.
John Eichberger, the vice president of government relations at the National Association of Convenience Stores, said the pumps can cost $4,000 each. But the impact of temperature changes on energy content is “very, very low.”
“If this is considered to be a serious issue then let’s do an exhaustive study to see if temperature corrected pumps benefit consumers or not,” he said.
Other issues affect the Btu content in a gallon more than temperature, Eichberger said. Corn-based ethanol, for example, has less energy per gallon than gasoline, he noted.
But stations in Canada, where persistent cold weather means consumers had been getting more than they paid for, already have temperature-adjusted devices on gas pumps.
Temperatures vary more widely in the United States, and it isn’t clear whether consumers on average pay too much, too little or about what they should.
“We don’t know to what extent there is a problem,” a lobbyist for an oil refinery said.
Rep. Dennis Kucinich (D-Ohio), the chairman of the Government Oversight and Investigations Domestic Policy Subcommittee, is trying to find the answer.
He wrote the executives of seven major oil companies earlier this month asking a series of questions related to the cost of gasoline. One section of the letter focused on the hot fuels issue: “The subcommittee also has concerns about the oil industry’s resistance to deploying technological measures to adjust for the well-known effects of temperature on gasoline,” the letter stated.
The letter indicated lawmakers are contemplating a requirement that temperature-adjusted pumps be used at gas stations. “Would you object to a federal law phasing in temperature-compensated gasoline sales in the United States?” it asked oil executives.
A subcommittee hearing on hot fuels is likely, according to Kucinich’s spokeswoman, Natalie Laber.
The chairman of the full committee is Rep. Henry Waxman (D), who hails from California, and the letter notes the high pump prices already being paid by drivers in that state.
Sen. Barbara Boxer (D-Calif.), the chairwoman of the Environment and Public Works Committee, wrote in a letter to California Gov. Arnold Schwarzenegger that, “consumers who live in warmer climates pay more at the pump to get the same amount of energy as those who live in cooler climates.”
he urged Schwarzenegger to examine whether a company that makes temperature corrected pumps was being pressured by the oil industry to not sell the pumps in California.
As lawmakers examine the topic, one issue they have to address is who would pay to retrofit gas pumps. Big Oil owns about 5 percent of gas stations. Members of the National Association of Convenience Stores would likely bear the brunt of the costs.
While the 60-degree standard dates back several decades, a series of articles last August in the Kansas City Star began to draw public attention to the issue.
The newspaper reviewed average temperatures and gasoline usage state by state and estimated that consumers were losing out on the energy equivalent of about 760 million gallons of gas and diesel a year. That amounted to $2.3 billion in fuel at the time of the Star’s report.