Senator introduces bill that would require temperature compensation
U.S. Senator Claire McCaskill (D-Mo.) on Aug. 3 introduced the F.A.I.R. (Future Accountability In Retail) Fuel Act that would require the installation of automatic temperature compensating equipment in all retail gas station pumps within six years to adjust the price of gas as it expands due to warmer temperatures. Reports indicate that Americans spend $2.57 billion more than they should for gasoline and diesel fuel, due to expanded “hot fuel,” according to a press release issued by the senator’s office.
McCaskill said the legislation was inspired by the Kansas City Star’s three-part series on “hot fuel” last year, which uncovered that the simple laws of physics were scamming consumers at the pump. Retailers currently measure gas at 60 degrees Fahrenheit, and consumers are paying a price for gas based on that temperature. However, warmer temperatures cause gas to expand and, as a result, consumers are getting less gas. As a candidate for the U.S. Senate, McCaskill pledged to work toward a solution to the “hot fuel” problem.
“Some say, ‘you get what you pay for.’ That’s just not the case at the gas pump in the summertime,” McCaskill said. “We have the technology to change that, and there’s no good reason not to utilize it.”
In addition to requiring all retail gas stations to install the new temperature compensating technology within six years, the F.A.I.R. Fuel Act would offer assistance for retailers to comply, and impose penalties for those who fail to ensure consumers are receiving the gas that they pay for.
“The big oil companies are the most profitable corporations in the universe, and yet they continue to fight against consumer protections while we pay the price,” McCaskill said. “The least we can do in Congress is ensure consumers are getting what they pay for.”
The F.A.I.R. Fuel Act would:
- Require installation of automatic temperature compensating equipment in all retail gasoline pumps within six years of the enactment of the legislation.
- Gives the Federal Trade Commission, working in conjunction with National Institute for Standards and Technology, authority to implement the requirement with a final rule to be promulgated no later than one year after the enactment of the legislation.
- Require state inspectors to determine if the equipment has been installed and report to the Federal Trade Commission during their annual inspections.
- Gives a reprieve with a follow-up inspection 180 days after the violation is found to first time offenders. If on the second inspection, retailers are still found to be in violation, they will be fined $5000 for each pump out of compliance.
- Establishes a grant fund for retailers, other than major integrated oil companies, who want assistance to pay for the new equipment. A retailer can receive $1000 per pump, but no more than $10,000 per retailer.
Groups such as Public Citizen, Owner-Operator Independent Drives Association, Consumers Union, Foundation for Taxpayer and Consumer Rights, Consumer Federation of America and U.S. Public Interest Research Groups (USPIRG) have endorsed the legislation.
“We, of course, think it’s a bad idea,” said Dan Gilligan, president of the Petroleum Marketers Association of America, based in Arlington, Va. “It’s going to add unproductive capital costs onto retailers that will be passed on to consumers for no gain. All that is going to happen is that consumers are going to pay more for gasoline because retailers had to install all of this expensive equipment. The markets are already compensating for temperature.”
It should be noted that McCaskill highlighted the ATC issues as part of her recent Senate campaign when the issue was emerging in Kansas. She is now following through on her promise. However, there are a variety of stumbling blocks standing in the way of her bill. There is no real move afoot today in the Senate for such legislation and getting hearing time in this session to push the issue will be a challenge.
Since McCaskill doesn’t sit on the Energy and Commerce committee, it will be an even tougher fight to get the legislation rolling. She does sit on the Commerce committee, and there are some possibilities there, but that too will be an uphill battle.
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