Foundation Says Legislation, AB868, Will Delay or Prevent Fair Sales of
Gasoline
SANTA MONICA, Calif., Sept. 17 LAWFUEL – The Legal Newswire — The
Foundation for Taxpayer and Consumer Rights today asked Gov. Arnold
Schwarzenegger to veto a bill now on his desk that would delay any remedy
to the “hot fuel” rip- off of California consumers and mire the decision in politics. The nonprofit, nonpartisan foundation sent a detailed letter to the governor outlining the deceptions and faults of the legislation, AB868
by Asm. Mike Davis. (See full letter at http://www.consumerwatchdog.org/resources/GovernorVetoAB868Letter.pdf).
“This legislation, billed by Asm. Davis and Assembly Speaker Fabian
Nunez as a consumer protection, is in fact the opposite of
consumer-friendly. The measure was written and supported by the California Independent Oil Marketers Association, an industry lobbying group,” said the letter.
The bill is deceptively titled as “Gasoline Dispensing, Weights and
Measures.” As the letter notes, the state’s own weights and measures
experts were apparently not consulted about the bill. Nor was consumer
input solicited.
The issue involves well-understood science. The letter says:
“California’s estimated year-round average fuel temperature at the pump is 75 degrees Fahrenheit, according to a 2002-2004 federal study. California drivers thus lose 1% on each purchase to fuel expansion, when compared to a gallon at the national temperature standard of 60 degrees. At 90 degrees, a common gasoline temperature in the summer driving season, the loss is 2%,
according to the National Conference on Weights and Measures and the
National Institute of Standards and Technology.”
The total yearly cost to California drivers of buying fuel hotter than 60 degrees is estimated at $450 million dollars. FTCR has called for
California to encourage installation of gasoline pump equipment that would compensate for expansion of hot fuel, always giving drivers a fair gallon’s worth of energy.
The letter includes a list of specific reasons for vetoing AB868 (see
below).
“The bottom line of our opposition is that the measure calls for
politically tinged studies that will delay or block any resolution and add nothing to the science of hot fuel,” said Judy Dugan, research director of FTCR and its OilWatchdog.org project. “The Davis bill punts the issue to the California Energy Commission, which has no oversight role in retail fuel sales and no expertise in the matter. An ‘advisory committee’ that
must be built from scratch will only further delay and muddy the process.”
The letter’s specific objections include:
— California’s own Division of Measurement Standards is more than halfway
through a year-long confirmational study of the state’s gasoline
temperatures. AB868 would take the results of the study out of the
hands of the state’s weights and measures experts and bury them in a
political process that will certainly delay and may prevent the sale of
gasoline adjusted for temperature. The facts of the study will not
require additional “study” and interpretation. The numbers are what
they are. In addition, the California Energy Commission will be
required to study effects of temperature on alternative fuels, which
will repeat work already done or in progress by state and national
weights and measures bodies. This is an unnecessary burden on the
California budget.
— The measurement standards agency has already stated that there is no
legal barrier to the sale of temperature-adjusted gasoline in
California and has certified American-made temperature-adjusting pump
equipment for California use. AB868 is a direct repudiation of the
state regulators’ action. It could undo the agency’s work by putting
temperature adjustment on indefinite hold or, in recommendations to the
Legislature, disallowing temperature adjustment at the pump. These are
the outcomes desired by the oil marketing lobby as well as by the major
integrated oil companies, in statements before the House Domestic
Policy subcommittee.
— The Division of Measurement Standards, in conjunction with the National
Council on Weights and Measures, is well along in the process of
developing national standards for the retail sale of temperature-
adjusted gasoline. At a special meeting in Chicago Aug. 27 and 28, NCWM
experts indicated it was likely that standards long in place in Canada
could be largely transferable to U.S. sales. The process should be in
the hands of the California DMS and national NCWM, not of a politically
appointed committee.
— National and regional weights and measures officials are finding that
installation costs of temperature measuring equipment for retail sale
will be a fraction of the $4,000 per pump that oil companies and
gasoline marketers assert. This is especially true if the change occurs
as part of regular equipment upgrades, which occur in roughly 8-year
cycles. The cost of phasing in temperature adjustment should not be
estimated by a committee that lacks technical expertise and is under
political pressure.
— Temperature adjustment is not a recently discovered issue requiring
study. Weights and measures officials long ago developed the standards
for wholesale and other bulk transactions to be temperature adjusted.
Temperature adjusted sales are seen as the only fair transaction method
at the wholesale level. This issue does not require reinvention by a
new state body or committee. The only point of such extended study
would be to delay or prevent the introduction of temperature-
compensated retail sales.
— A study of “costs and benefits” may not account for fundamental
fairness and is an opening for lobbyists’ exaggerations. Consumers have
no way of knowing the temperature of gasoline they are buying, and the
business incentive is for wholesalers to deliver and retailers to sell
the warmest possible fuel. The CEC, which the bill instructs to conduct
this study, has no experience in overseeing retail sale of motor fuels.
Its appointment of an “advisory group” for this study will increase the
politicization of the outcome.
— Political interference in government regulatory processes discredits and embarrasses legitimate government agencies. This recently happened when the Federal Trade Commission, using arguments that could not have come from weights and measures officials, issued an “opinion letter”
Aug. 28 on fuel temperature adjustment that underestimated the loss to consumers by more than 90%. The National Institute of Standards and Technology issued the rebuttal data that slammed this politically
motivated cost-benefit opinion. FTC chairwoman Deborah Majoras was
forced to apologize and rescind the letter.
“Gov. Schwarzenegger has an opportunity to stand up for science-based
public policy and for the interests of the state’s consumers by vetoing
this bill,” said Jamie Court, president of FTCR. “By signing it, he would
ingratiate himself with industry lobbies at the expense of a reasonably
paced fix for a consumer rip-off that can be fixed simply by encouraging
the retail sale of temperature-adjusted gasoline.”
For more information on the science and effects of hot fuel, see
http://www.oilwatchdog.org/articles/?storyId=5821
OilWatchdog.org is a project of the Foundation for Taxpayer and
Consumer Rights, a nonprofit, nonpartisan consumer watchdog organization.
Its websites are http://www.OilWatchdog.org and
http://www.ConsumerWatchdog.org.
