TORONTO, Ont. - A recent series of articles in The Kansas City Star has got the US trucking industry feeling a little hot under the hood. The articles explore the problem of 'hot fuel' at the pump, wh...
TORONTO, Ont. – A recent series of articles in The Kansas City Star has got the US trucking industry feeling a little hot under the hood. The articles explore the problem of ‘hot fuel’ at the pump, when diesel and gasoline temperatures exceed the government standard of 60 degrees Fahrenheit. At the 60-degree standard, a gallon of fuel delivers a certain amount of energy or British Thermal Units (BTUs), but as the temperature increases, the same amount of fuel expands and delivers less energy. In essence, the hotter the fuel, the less BTUs it puts forth, meaning the fewer miles per gallon a vehicle gets.
Many key governing bodies, from the major American trucking associations to US Congress, are searching for an answer on why US consumers are dropping an estimated $2.3 billion annually for fuel they aren’t actually receiving.
Back in 2002, John Siebert, project manager of the Owner-Operator Independent Drivers Association Foundation, was given the assignment to look into this problem by collecting and assessing dozens of diesel samples. After reviewing his research and numbers, he discovered that fuel temperatures were well above the 60 degree standard, with 75 degrees recorded as the coolest temperature and 98 degrees the hottest.
To further his research, Siebert asked OOIDA members to fill two-gallon gas cans with diesel and record the temperature with pulping thermometers. Most results were even higher than Siebert’s initial tests, with one member reporting his fuel at a staggering 118 degrees.
“I had one two weeks ago (in September) that was 113 degrees in Colorado, about 30 miles north of Denver,” Siebert told Truck News.
Denver? Not exactly a hot summer getaway. So where is the excess heat coming from?
Siebert says the problem starts right back at the rack, an industry term describing the fuel’s journey from point of production to wholesale. Heat from the production process is retained by the fuel and with the constant demand for diesel and gasoline by the public, the fuel isn’t given a chance to cool down.
“It’s either hot in the pipeline or hot from the refinery and it’s not having time to cool down. They’re selling it just as fast as they put it in the tanks,” Siebert says.
So what’s the solution? A very simple one, Siebert says, and one that Canadian consumers have been enjoying since the 1990s. Temperature compensation is a process that adjusts the amount of volume dispensed by pumps based on the fuel’s temperature. If the fuel is cooler than 60 degrees, the pump gives out more volume, and if the fuel is hotter than 60 degrees, it gives out less volume. But in both cases, each gallon will weigh exactly the same and have the same amount of BTU-producing power as if it were at 60 degrees.
“At a standard temperature adjustment, you always get the same energy content, because as the temperature goes up, the product loses density and as the temperature goes down, you get more energy,” says Dane Baily, vice-president of the Canadian Petroleum Products Institute. “From a marketer’s standpoint, to be able to say to your customer, ‘You’re always getting the same energy content for your money,’ it’s a pretty solid offer.”
Virtually all the retail establishments that CPPI deals with, namely Esso, Petro-Canada, Husky Energy, Shell Canada, Chevron Canada, North Atlantic Refining, NOVA Chemicals Canada, Parkland Income Fund, Suncor Energy Products and Ultramar, are temperature-compensated.
So before you get your hose in a knot, you can rest assured that most Canadian consumers are safe from the energy-gypping effects of hot fuel.
Unfortunately, our American counterparts are not so lucky, nor are Canadian truckers who are forced to fuel up south of the border. The vast majority of pumps in the US are not temperature-compensated, and according to Siebert, major groups like the Petroleum Marketing Association want to keep it that way.
“The PMAA says they wouldn’t want to confuse the American consumer by having to tell them that they were going to temperature compensate and they would like to continue to give them hot fuel and make them pay for BTUs that they aren’t receiving,” he says. “The petroleum industry and the carriers that buy their fuel at the racks temperature-compensated are perfectly happy to have things go on the way they are now.”
“Canadians understand this and go along with it and the Americans are just so dumb that they just wouldn’t understand it and it would confuse them,” he continued sarcastically. “Oh, what a horrible thing to have confused consumers out there! Believe it or not, when it comes to getting a value for our dollar, we’re just as interested in doing that as the Canadians are.”
The CPPI’s Baily admits that when temperature compensation first arrived, there was a big outcry from Canadian consumers, but since then the organization has explained the benefits and most complaints have essentially disappeared.
“The customers understand it and customers that have their own tankers like it too, because they have a way of knowing if the product is being stolen or is leaking underground. It’s a good balance,” he says.
Potential confusion aside, the major discrepancy between organizations like OOIDA and the PMAA is the would-be cost of introducing temperature compensation. The PMAA has been quoted as saying installing the system will require a full replacement of all pumps in the US. At an estimated cost of $25,000 per pump, the fuel industry would be stuck with a hefty $25 billion tab.
But contrary to the PMAA’s claims, Siebert argues that equipping American consumers with temperature compensation would not require a full replacement of all the pumps in the US.
“Every digital pump in the United States has temperature compensation built into it already, because digital pump manufacturers sell digital pumps across the world, including Canada, England, Sweden and Germany, where they already temperature-compensate fuel. Pumps in the US have that feature built into them, it’s just not operating,” he says.
For a cost of about $350 to $1,000 per pump, you can retrofit a pump to have a temperature probe installed and the function turned on instead of replacing the entire unit, Siebert says.
“In the worst case scenario, it would cost $1.9 billion to make the fix and it will save American consumers $2.3 billion in the first year, conservatively.”
Dan Gilligan, president of the PMAA, says his organization will be having its national board meeting in a couple of weeks, and will be revisiting its position on temperature compensation.
But in general, Gilligan told Truck News he felt the article in The Kansas City Star exaggerated the issue severely and showed a lack of understanding of how the industry is structured.
“(The reporter) was making these allegations that refiners benefit $2.3 billion (from hot fuel) and they can afford to buy all this temperature-compensation equipment. In fact, refiners are not in any way benefiting from the temperature changes and to push billions of dollars of new pumps on retailers is ridiculous,” Gilligan said.
“It just showed a lack of understanding of how the industry works. It was like the reporter was bent on proving his point and not really considering all the other factors in play.”
But Siebert is still bent on proving his point and hardly feels $2.3 billion lost to consumers each year is as small a deal as some would make it seem.
“It’s a miniscule amount when you think about the trillions of dollars that America spends on fuel a year, but it’s still $2.3 billion a year,” he says. “For every trucker it’s $700 a year and for every car owner it’s $50 a year. That’s my $50. I don’t owe that to the oil company that sells me my fuel. That’s that trucker’s $700. He does not owe that to that oil company. After you do that for 10 years, now it’s $7,000 for each trucker or $500 per individual. It’s like the old boy says, ‘If you start adding up pennies, pretty soon they’ll add up to a dollar.’ It’s the same when y
ou start adding up billions of dollars, they become tens of billions of dollars.”
Thanks to The Kansas City Star articles, the temperature compensation issue has been thrust into the public eye, allowing groups like OOIDA to make their case for converting American pumps to match their neighbours to the north.
Currently the group is pressuring the US weights and measures officials to push for legislation to temperature-compensate fuel in the US.
“The reason the weights and measures people said they wouldn’t recommend it is because the ignorance of the consumer would only confuse them, and because the consumers are so ignorant, (the weights and measures officials) didn’t want to open up a can of worms. So we opened the can for them. We’re trying to stop the confusion, give them straight information and apply as much political pressure as we can to get this problem taken care of,” Siebert says. “This for not just the well-being of our members, the individual truckers, but also for the American public who is making a donation to someone who doesn’t really deserve it every year.”