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The Honolulu Advertiser
Posted on: Tuesday, June 19, 2007

Suits focus on 'hot fuel'

By Greg Bluestein
Associated Press

Hawaii news photo - The Honolulu Advertiser

As temperatures rise, liquid gasoline expands and the amount of energy in each gallon drops — and that could end up costing consumers between 3 and 9 cents a gallon at the pump, consumer watchdog groups warn.

Associated Press library photo

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Hawaii news photo - The Honolulu Advertiser

Jim Rohrer of Tucker, Ga., pumps gas at a filling station in Clarkesville, Ga. As the temperature rises, Rohrer and other drivers aren't getting as much out of their tanks as they do in cooler weather.

JOHN AMIS | Associated Press

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ATLANTA — It's not just increased demand that sends summertime gasoline prices soaring. It's also the increased temperature.

As the temperature rises, liquid gasoline expands and the amount of energy in each gallon drops. Since Mainland gas is priced at a 60-degree standard and gas pumps don't adjust for temperature changes, motorists get less bang for their buck in warm weather.

Consumer watchdogs say the temperature hike could end up costing consumers between 3 and 9 cents a gallon at the pump. (Hawai'i law requires stations to assume a fuel temperature of 80 degrees — giving buyers about 1% more gas than the 60-degree standard.)

The effect could cost U.S. drivers more than $1.5 billion in the summertime, including $228 million to drivers in California alone, according to the House subcommittee on domestic policy, which recently addressed it in hearings. The committee's chair, Rep. Dennis Kucinich, D-Ohio, has long been an advocate on the issue and has new clout as a member of the congressional majority.

Retailers say forcing stations to adjust their pumps would be too costly, and they asked Kucinich to call off the hearings and wait for more studies.

The issue has driven trial lawyers to fire off as many as 20 federal lawsuits accusing retailers of using simple physics to take advantage of consumers. Challenges have been filed in Alabama, Arkansas, California, Florida, Kansas, Missouri and New Jersey, among other states, and some are seeking class-action status.

The latest lawsuit, filed last week in federal district court in Georgia, claims that distributors have been "unjustly enriched" by tens of millions of dollars. They did so by paying taxes on the fuel based on the colder industry standard but pocketing the taxes collected from customers when the temperature soars, it alleged.

"I don't believe gas retailers should collect more in purported taxes than they pay the government," said Bryan Vroon, one of the attorneys in the Georgia suit. "Gas prices are high enough without the over-collection of taxes."

The "hot fuel" effect is a matter of simple physics.

TEMPERATURE SWINGS

Almost a century ago, the industry and regulators agreed to define a gallon of gasoline as 231 cubic inches at 60 degrees. But as the mercury rises and gasoline expands, it takes more than a gallon of gas to produce the same amount of energy. The opposite is true when gasoline contracts in colder weather.

U.S. gas retailers ignore the temperature swings and always dispense fuel as if it's 60 degrees. As a result, gas is an average of about 5 degrees warmer than the federal standard, according to a study analyzed by Dick Suiter of the National Institute of Standards and Technology.

According to the National Oceanic and Atmospheric Administration, the average U.S. temperature in May was 63 degrees; average for all of 2006 was 55 degrees. But drivers fare worst in Southern and Western states where the temperatures are the most consistently warm.

Increased demand sends gas prices higher during the summer travel season, so the effect of paying more for less in the warmer months is more pronounced.

The impact isn't lost upon Carl Rittenhouse, a carpet worker from the north Georgia town of Chatsworth.

"You can tell the difference between the time you fill up in the morning or night, or if you fill up in the middle of the day," said Rittenhouse, who joined one of the lawsuits. "All you have to do is look at the fumes."

INTEREST IN WASHINGTON

The debate is now reaching Washington.

Sen. Barbara Boxer, D-Calif., recently urged California lawmakers to take action. And Rep. Kucinich earlier this month called a hearing on the issue, calling it "Big Oil's double standard."

"People are paying for gasoline they're not getting," said Kucinich, who is running for president.

Lawmakers don't have to look very far for possible solutions.

In frigid Canada, where cold temperatures were giving consumers an edge, many gas stations voluntarily backed a program to add pumps that automatically adjust volumes based on temperature.

Hawai'i first set the 80-degree standard during the energy crisis in the 1970s.

The federal government is considering a similar change as well. The National Conference on Weights and Measures is to vote in July on whether to allow temperature regulation by retailers.

RETAILERS FIGHT BACK

The upcoming decision is worrying some fuel distributors, who say the new equipment could force some independent dealers out of business. NATSO, a trade group representing truck stop owners, estimates that each retrofitted pump could cost between $1,500 to $3,800.

"The average truck stop has 20 pumps," said Mindy Long, a spokeswoman for the group. "The burden on them would be phenomenal."

NATSO and other gas retailers have formed a group called PUMP — the Partnership for Uniform Marketing Practices — which is calling for more studies before action is taken.

They have a powerful ally in Rep. Bart Gordon, the Tennessee Democrat who chairs the House Committee on Science and Technology. In a May letter to the National Academy of Sciences, he suggested the idea of retrofitting pumps may be "premature."

The trucking companies and motorists behind the lawsuits hope they could force politicians to act quicker.

"You're not getting as much as what you're paying for, really," said Rittenhouse, the north Georgia motorist. "Most folks don't have a clue. But it's costing them."

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