Monday, August 28, 2006

When Is A Gallon Not a Gallon? When You're Buying Gas

On a hot August day in Texas, you notice your big pickup is nearly running on fumes, so you drive into a gas station where the price is $2.69 a gallon. You fill up the tank with 35 gallons of gas. Simple math tells you that's going to cost you $94.15. You're not happy about it, but at least you know across the country people are paying something close to the same for gas, so you go inside and get ready to pay. You tell the clerk behind the counter what pump it was, and she says, "Okay, $94.15 plus the $1.14 surcharge, that's $95.29."

"Hey, what's this surcharge business?"

"That's the heat surcharge. Any time the gas is hotter than sixty degrees, we get to charge extra for the same amount of gas."

You think something unprintable, but you've been brought up to be polite to ladies, so all you say is, "Well, I'll pay it, but this is the last time I'm buying gas here."

"Doesn't matter. They all do it."

Sound crazy? Well, it isn't. It happens every day, all across the country. Only the surcharge is a hidden one, and perfectly legal, so the sales clerks don't talk about it. As an article in the Aug. 27 Kansas City Star describes, if you buy gas in the U. S. that is hotter than sixty degrees F—and as a recent U. S. government study shows, that is most of us in the warmer parts of the country—you don't get what you think you're paying for. Here's how it works.

Each molecule of gasoline provides a certain amount of energy to your car's engine. What you're really buying when you pay for gas is energy, and so you'd think that the fairest way to charge for gas is so much money for so many molecules. Well, counting molecules is not too easy, so long ago it was decided that gasoline would be sold by the gallon, since measuring volume is simple and accurate.

The only trouble with that is that gasoline expands when it gets warmer. That means the same number of molecules take up more room at higher temperatures. If you have thirty-five gallons of gas at a temperature of sixty degrees F and warm it up to eighty degrees F, it's still a liquid. But it expands to occupy a volume of 35.42 gallons. Same number of molecules, same amount of energy—but a larger volume. And if you come along and buy 35 gallons of warm gas when it's eighty degrees, you pay the same money, but you get less gas (fewer molecules, less energy) than if it was at sixty degrees.

Petroleum engineers knew all about this decades ago, so they agreed on a standard temperature of 60 F for measuring volumes. And in the bulk transactions among refiners, pipeline operators, and wholesalers, you can bet that they take this expansion into account. In Canada, where the gas that's sold is on average colder than 60 F, an enterprising inventor went around to gasoline retailers and pointed out that when they sold cold gas, they were giving their customers more than they legally had to. So now nearly every gas pump in Canada compensates for temperature and delivers slightly less gas than it used to, for the same price on the pump screen. And the retailers happily paid the inventor for his idea, since they now make more money on each gallon of cold gas.

Nobody that the Star reporter talked to would admit it, but the reason temperature-compensated gasoline sales haven't spread to the U. S. is probably because the retailers would lose money instead of making money.

Engineering ethics is about experts who use their specialized knowledge for the good of their employers and society in general. Here is a clear case where an obscure technical effect is taking billions of dollars a year away from consumers. Engineers know about it, but the law permits it. As long as a gas pump delivers one gallon with a certain accuracy, it gets the stamp of approval from the local weights and measures authority and there is nothing illegal going on. But all that is legal is not moral, and the example of Canada shows that the technical fix for the problem is available at a cost that would not drive gas stations out of business.

Is this the worst problem you'll run into today? If it is, you're having a pretty good day. But it's real, and as gas prices go even higher, any changes in a direction that would improve matters would be welcome. Sooner or later, some clever advertising executive may think of a way to turn temperature-compensated gas sales into a competitive advantage. Unfortunately, logic does not play a large role in advertising, and the campaign to get this idea across would have to be very well planned. Another alternative is to change the laws regulating retail gas sales to require all gas to be sold with temperature compensation. The effect of this would be to make prices slightly lower in the summer and higher in winter, which might do something to offset the annual rise caused by summer driving. The prospects of either happening are not good. But until retailers start selling gas with the price compensated for temperature, at least now you know what you're paying for—which is not what it seems to be.

Sources: The original Kansas City Star article is at A method of figuring out what temperature does to the volume of gasoline is available from the Ohio Department of Transportation at

1 comment:

  1. Hot Gas Fuels Hot Tempers

    Over the past five to six years, the gasoline prices have gotten ridiculous. One may ask, “When will the price of gasoline stop going up?” Well, it will not be as soon as one wants. There is more to gasoline that just supply, demand, and taxes. Temperature is a rising issue that consumers are looking at more carefully. That’s right; the temperature of gasoline can mean more money of out your pocket. As temperatures rise and oil companies fall back on outdated laws, consumers are getting stuck with a surcharge on top of expensive gasoline.
    “Decades ago, when oil was first starting to get big, petroleum engineers figured out that temperature affected the properties of gasoline. As the temperature of gasoline rises, the gas expands, and as the temperature drops, the gas contracts. With this in mind, petroleum engineers decided on a sixty degree Fahrenheit standard temperature. This means that any gasoline purchased at a temperature greater than sixty degrees, a heat surcharge will be added to the price.”[1] Any gasoline purchased at a temperature lower than sixty degrees incurs no extra charge. If gas expands at a temperature higher than sixty degrees, then why is the consumer charged for less gas? Why is a surcharge not added to gasoline at a temperature lower than sixty degrees? In fear of giving consumers a little bit more gas than what they paid for, oil companies sometimes charge the consumer more than what they actually get. “This is hitting a little too close to home. The United States and Canada are two of the many countries that could get stuck with this surcharge price.”[1] Although this is not happening all over the United States right now, it could be in the near future. Now to reflect on the matter at hand, “Is this Ethical?”
    Like any political or economical circumstance, there are at least two or more parties involved. These are not just involved in the decision making, but these are parties affected from the beginning to the end. The parties involved in this case are; big oil companies, petroleum engineers, and the consumers.
    Big oil companies play a very important role in this issue. They are the ones that spend millions of dollars to extract the oil from the earth. Not only are they responsible for drilling, but they have to be careful and ethical with the environment around them. “Drilling a well is expensive; shallow offshore wells or deep onshore wells can cost more than ten million dollars each to drill.”[3] So, if oil companies spend millions of dollars to get the oil, why shouldn’t they charge as much as they do? “Well as a matter of fact, many oil companies have been setting company highs and setting gross revenue records. There might be a perfecting reasonable and understandable explanation for Exxon Mobile's $36 billion in annual income on 10 times that amount of revenue. That explanation would be over-priced gasoline.”[5] “Do not think that the reason for high gas is because there is a shortage in the United States. In the United States, 8 oil and gas fields have been producing for more than 100 years.”[4] If oil companies are breaking records and setting highs, then why would they want to add and extra surcharge on gas that is 60+ degrees? It is simple. Oil companies want more money, no matter how they get it. This is not an ethical way to run an operation. Ethical oil companies are not supposed to thrive by cheating the consumers.
    Another important role is played by the petroleum engineers. They are hired by the oil companies to enhance every aspect of production, ethically. This includes the ethical production and consumption of gasoline. “Petroleum engineers figured out the properties of gasoline, and concluded that gasoline shrinks as the temperature drops and expands at the temperature rises.”[1] Although the engineers do not apply the surcharge to the gasoline, they do provide the oil companies with the information on whether or not it would be ethical. The problem is that it may be ethical for the producers, but it is not ethical for the consumers. These engineers are not coming up with a solution to this problem. One would think that a petroleum engineer would come up with a way to help save the consumers money which, by the way, is being spent on high priced gasoline. Aren’t engineers supposed to increase production while minimizing cost? If so, this is not an ethical way to do it.
    The last party involved would be the consumers, the American Citizens. The consumers are the ones that big oil companies thrive on. “High temperatures cost Californians at least 3 cents for every gallon in warmer weather and overcharge Americans more than $2.3 billion annually.”[6] “When state-by-state temperature and consumption patterns are calculated, The Star estimates U.S. consumers now are being shorted the energy equivalent of roughly 760 million gallons a year of gas and diesel because of fuel expansion caused by heat — fuel that’s worth about $2.3 billion at recent prices.”[2] Although the oil companies thrive off of the consumers, the consumers do have some power. If only a few stations in an area apply a surcharge, then the consumers can boycott those stations. However, in most cases, if one station does it so will the others. Another way that the consumers can exercise their power is through the law. They can take it court or even elect officials that have their same point of view. There are several different ways to protest what is ethical. One of the hardest ways would be to boycott. It would be difficult because gasoline is a necessity. There are people that have to have gasoline in order to go to work. It is not like gasoline is being bought to waste. It is being bought to make a living. It is not fair that oil companies overprice gasoline, then turnaround and charge extra for gas that has expanded a little. Consumers are doing what they can to make a living, not only for themselves, but also the big oil companies.
    Ultimately, big oil companies are not being ethical when it comes to gasoline. What would happen is if cost people too much to travel to work? If this were the case, unemployment would increase, more people would need welfare, and people would retire earlier and draw out more of the Social Security. Meanwhile, the big oil companies would be sitting fat without a worry in the world. This is not right. America is not supposed to be a place where the rich get richer and the poor get poorer. America is supposed to be a place where the American citizens can have a job and afford to make a living.
    While growing up, at home, in church, and at school ethics and morals were instilled in me. When I look at this issue at hand, I know something is not right. There are big oil companies making money off of consumers by cheating them out of gas. “If you have thirty-five gallons of gas at a temperature of sixty degrees F and warm it up to eighty degrees F, it's still a liquid. But it expands to occupy a volume of 35.42 gallons, which is the same number of molecules, same amount of energy—but a larger volume. And if you come along and buy 35 gallons of warm gas when it's eighty degrees, you pay the same money, but you get less gas (fewer molecules, less energy) than if it was at sixty degrees.”[1] It may not sound like a lot, but it does add up. By no means is this moral or ethical. We, as American citizens and consumers must stand together and fight this unethical battle.
    Like any problem that comes along, there is, or will be solutions. I have several propositions that could begin the end of this nonsense. First of all, it would be ethical for oil companies to apply a surcharge to colder gas. If gas contracts as the temperature drops, then consumers would be getting more gas than what they paid for. Although the consumers may like the idea of getting more than what they paid for, it is not ethical. Secondly, there should be temperature sensors on the gas pumps. I would not matter if the temperature went up or down, the correct surcharge price would be added. “The technology to adjust for temperature has already been installed in Canada but domestic oil companies have resisted because they made an extra $500 million in profits per year in California due to failure to adjust for gasoline temperature.”[6] Finally, what if there were additives that could hold gasoline at a certain temperature. This would prevent gas from expanding or contracting, which would result in no surcharge. These are only a few possibilities of many ethical solutions to this problem.
    In conclusion, it is not ethical to charge consumers for gas that they do not receive. This problem probably arose due to the selfishness of someone in a substantial position. We must not let self-interest take over our morals and principals when it comes to dealing with the economy. “Ethics is not definable, is not implementable, because it is not conscious; it involves not only our thinking, but also our feeling.”- Valdemar W. Setzer

    [1] (Engineering Ethics Blog) Accessed 9/15/06
    [2] (Kansas City Star Newspaper) Accessed 9/15/06
    [3],,1104_1008218_1109301,00.html (Society of Petroleum Engineering) Accessed 9/15/06
    [4],,1104_1008218_1109305,00.html (Society of Petroleum Engineering) Accessed 9/15/06
    [5] (Channel 3000 News) Accessed 9/15/06
    [6] (Arrivenet) Accessed 9/15/06