Rep. Kucinich at the front of this investigation, too.
http://www.alternet.org/story/59593/?page=2Oil Companies Are Using a Simple Trick to Bilk Consumers out of Billions
By Brian Beutler, Media Consortium. Posted August 14, 2007.
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Oil companies know that gasoline expands at higher temperatures and has less volume at lower ones, but they've refused to upgrade gas stations with a simple tool that would adjust the price of gas according to its temperature.
Kucinich's hearings were designed to shed light on this and other double standards. Oil company executives, testifying under threat of subpoena, told the subcommittee that gas retailers in the United States don't use heat meters -- known as "automatic temperature compensation" -- because state regs don't let them. "State weights and measures regulations have not adopted temperature correction," said Hugh Cooley, a Shell Oil Company vice president, in answer to Kucinich's inquiries. Ben Soraci, Director of General Sales for ExxonMobil, echoed Cooley, insisting that "across the U.S. a gallon is still defined as 231 cubic inches by law."
But Kucinich offered evidence to the contrary. His subcommittee asked the National Institutes of Standards and Technology to survey all 50 states and the District of Columbia about their weights and measures rules. "Most states permit the use of temperature compensation at both the wholesale and retail level," Kucinich said the survey found. "In fact, NIST could find that automatic temperature compensation is only expressly prohibited in nine states for retail."
Further, Kucinich found that Gilbarco Veeder-Root sought certification for its automatic temperature compensation equipment in California. Gilbarco was responding to what it has said was the stated interest of California gas retailers, but it found no buyers when the state gave its product the OK.
Cooley and Soraci say that's unsurprising because the cost for implementing devices like Gilbarco's, an investment estimated to be about $2,500 per unit, would be borne by retailers -- the majority of which are affiliated only loosely with big oil companies -- and then ultimately passed on to the consumer. The oil execs' contention is true as far as it goes, but belies the fact that oil companies maintain funds -- called "image" and "development" funds -- meant to help so-called arms-length retailers pay for modifications and improvements to their gas stations. The money is there to extend to consumers the same fair deal wholesalers get, but the companies don't particularly want to spend it.
Kucinich's subcommittee is now also investigating whether that's the reason California retailers balked when given the chance to use Gilbarco Veeder-Root's system, and whether states should be encouraged to mandate pricing by amount of energy bought rather than volume of gas sold.