[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
      HOT FUELS: BIG OIL'S DOUBLE STANDARD FOR MEASURING GASOLINE

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON DOMESTIC POLICY

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 8, 2007

                               __________

                           Serial No. 110-195

                               __________

Printed for the use of the Committee on Oversight and Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 HENRY A. WAXMAN, California, Chairman
TOM LANTOS, California               TOM DAVIS, Virginia
EDOLPHUS TOWNS, New York             DAN BURTON, Indiana
PAUL E. KANJORSKI, Pennsylvania      CHRISTOPHER SHAYS, Connecticut
CAROLYN B. MALONEY, New York         JOHN M. McHUGH, New York
ELIJAH E. CUMMINGS, Maryland         JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio             MARK E. SOUDER, Indiana
DANNY K. DAVIS, Illinois             TODD RUSSELL PLATTS, Pennsylvania
JOHN F. TIERNEY, Massachusetts       CHRIS CANNON, Utah
WM. LACY CLAY, Missouri              JOHN J. DUNCAN, Jr., Tennessee
DIANE E. WATSON, California          MICHAEL R. TURNER, Ohio
STEPHEN F. LYNCH, Massachusetts      DARRELL E. ISSA, California
BRIAN HIGGINS, New York              KENNY MARCHANT, Texas
JOHN A. YARMUTH, Kentucky            LYNN A. WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa                PATRICK T. McHENRY, North Carolina
ELEANOR HOLMES NORTON, District of   VIRGINIA FOXX, North Carolina
    Columbia                         BRIAN P. BILBRAY, California
BETTY McCOLLUM, Minnesota            BILL SALI, Idaho
JIM COOPER, Tennessee                JIM JORDAN, Ohio
CHRIS VAN HOLLEN, Maryland
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
JOHN P. SARBANES, Maryland
PETER WELCH, Vermont

                     Phil Schiliro, Chief of Staff
                      Phil Barnett, Staff Director
                       Earley Green, Chief Clerk
                  David Marin, Minority Staff Director

                    Subcommittee on Domestic Policy

                   DENNIS J. KUCINICH, Ohio, Chairman
TOM LANTOS, California               DARRELL E. ISSA, California
ELIJAH E. CUMMINGS, Maryland         DAN BURTON, Indiana
DIANE E. WATSON, California          CHRISTOPHER SHAYS, Connecticut
CHRISTOPHER S. MURPHY, Connecticut   JOHN L. MICA, Florida
DANNY K. DAVIS, Illinois             MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts       CHRIS CANNON, Utah
BRIAN HIGGINS, New York              BRIAN P. BILBRAY, California
BRUCE L. BRALEY, Iowa
                    Jaron R. Bourke, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 8, 2007.....................................     1
Statement of:
    Columbus, R. Timothy, general counsel, National Association 
      of Convenience Stores, and general counsel, Independent 
      Gasoline Marketers of America..............................   102
    Suiter, Richard, Weights and Measures Coordinator, National 
      Institute of Technology and Standards; Michael Cleary, 
      chairman, National Conference on Weights and Measures; 
      Martin Gafinowitz, CEO, Gilbarco Veeder-Root; and John 
      Seibert, owner-operator Independent Truck Drivers 
      Association................................................    22
        Cleary, Michael..........................................    28
        Gafinowitz, Martin.......................................    42
        Seibert, John............................................    45
        Suiter, Richard..........................................    22
Letters, statements, etc., submitted for the record by:
    Cleary, Michael, chairman, National Conference on Weights and 
      Measures, prepared statement of............................    31
    Columbus, R. Timothy, general counsel, National Association 
      of Convenience Stores, and general counsel, Independent 
      Gasoline Marketers of America, prepared statement of.......   106
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    13
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................     9
    Gafinowitz, Martin, CEO, Gilbarco Veeder-Root:
        Information concerning average temperature...............    96
        Prepared statement of....................................    43
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio:
        Letter dated May 30, 2007................................     2
    Prepared statement of........................................     6
    Seibert, John, owner-operator Independent Truck Drivers 
      Association, prepared statement of.........................    47
    Suiter, Richard, Weights and Measures Coordinator, National 
      Institute of Technology and Standards:
        Information concerning temperature compensation..........    68
        Prepared statement of....................................    24
    Watson, Hon. Diane E., a Representative in Congress from the 
      State of California........................................    17


      HOT FUELS: BIG OIL'S DOUBLE STANDARD FOR MEASURING GASOLINE

                              ----------                              


                          FRIDAY, JUNE 8, 2007

                  House of Representatives,
                   Subcommittee on Domestic Policy,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9 a.m., in 
room 2154, Rayburn House Office Building, Hon. Dennis J. 
Kucinich (chairman of the subcommittee) presiding.
    Present: Representatives Kucinich, Cummings, Watson, and 
Davis of Illinois.
    Staff present: Jaron R. Bourke, staff director; Jean Gosa, 
clerk; Auke Mahar-Piersma, legislative director; and Natalie 
Laber, press secretary, Office of Congressman Kucinich.
    Mr. Kucinich. The committee will come to order. This is a 
meeting of the Domestic Policy Subcommittee of the Oversight 
and Government Reform Committee. Good morning. I am Congressman 
Dennis Kucinich, chairman of the committee. We are joined this 
morning by Danny Davis, a Congressman from Illinois, and by 
Congressman Cummings of Maryland.
    The title of today's hearing is, ``Hot Fuels: Big Oil's 
Double Standard For Measuring Gasoline.'' This morning we are 
going to hear from two panels of witnesses. I'll be introducing 
them shortly.
    I would like to say that first of all, without objection, 
the chairman and the ranking minority member will have time to 
make opening statements, followed by opening statements of 
other Members not to exceed 3 minutes. Without objection, 
Members and witnesses may have 5 legislative days to submit 
written statements or extraneous materials for the record.
    Now, in connection with that, I have a statement from the 
Partnership for Uniform Marketing Practices [PUMP] Coalition 
and without objection this statement will be entered into the 
record.
    I also have a letter from Bart Gordon who is the chairman 
of the Committee on Science and Technology of the U.S. House. 
It is a copy of a letter that he sent to the National Academy 
of Sciences. Without objection, that correspondence will also 
be put in the record.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T1987.063
    
    [GRAPHIC] [TIFF OMITTED] T1987.064
    
    Mr. Kucinich. I want to welcome the witnesses and the 
committee very much appreciates your presence here. I want to 
begin by saying that everyone knows that gasoline prices rise 
during the summer. Everyone also knows that his or her gas 
mileage suffers during the summer. But it is a little-known 
industry secret that the amount of gasoline, when you put it in 
your tank, when you fill up in the summer, is less than the 
amount in the winter in terms of weight and energy content. 
Scientists call this the thermal expansion of gasoline.
    And the oil industry has known for 100 years that gasoline 
expands with temperature. As it warms, gasoline expands by 
volume but not by weight or energy content. Therefore, a gallon 
of gasoline at 90 degrees weighs less and has less energy 
content than a gallon at 60 degrees. That is part of the reason 
why gas mileage suffers in the summer.
    Now, since the 1920's, the oil industry has taken 
temperature into account for wholesale transaction. And they 
use a 60-degree Fahrenheit standard when measuring gasoline at 
wholesale. In other words, when the sale of gasoline is between 
two members of the oil industry, they adjust for temperature, 
no matter what the actual temperature of the gasoline. 
Therefore, they make sure that the same amount of gasoline by 
weight and energy content is transacted. They standardize 
wholesale transactions. They remove the variable of temperature 
from their sales to each other.
    But the oil industry does not adjust for temperature in 
retail sales to consumers. When the temperatures of gasoline 
fall below the industry standard, as they do in many States in 
the winter, gasoline contracts and the weight of a gallon 
rises. But when temperatures rise above the industry standard, 
as they do in all States during the summer and in many States 
during most of the year, consumers pay what we call a Hot Fuel 
Premium when gasoline prices exceed or are sold at above 60 
degrees.
    Existing technology can correct for temperature at the 
retail level. That technology is known as automatic temperature 
compensation [ATC]. One of our witnesses today is the largest 
manufacturer of automatic temperature compensation devices in 
the world. The oil industry is not known for lacking business 
sense. In Canada the oil industry moved quickly to adopt 
automated temperature compensation at the retail pump. We will 
be hearing testimony today that Canadian gasoline stations are 
almost universally equipped with temperature compensating 
technology.
    But in the United States, where, of course, temperatures 
are often considerably warmer than they are in Canada and they 
are warmer than the industry standard of 60 degrees, the oil 
industry has resisted equipping their gas stations with 
temperature compensating technology. Even after the State of 
California approved that automatic temperature compensation for 
use and sale in the State, no oil company purchased it. In 
fact, they resist even talking about the subject.
    We invited ExxonMobil and Shell to testify today because 
they have large commercial presences in both Canada and the 
United States. And we hoped they could explain why they decided 
to do one thing in Canada and another thing in the United 
States. Unfortunately, they refused to appear.
    I just want to go over this again. These companies do 
business in both countries. They have one standard in Canada, 
where they want to make sure they are not going to lose money 
if the temperature drops below 60 degrees. So they have 
automatic temperature control compensation so they can sell 
gasoline at a constant volume without losing money. And in the 
United States, a whole different standard. Temperatures are 
higher, they rise, people end up in this country paying a lot 
of money for gas they are not getting.
    So in a way it is understandable that ExxonMobil and Shell 
wouldn't show up in front of a committee of the U.S. Congress 
to explain. The majority staff of the subcommittee conducted a 
study of the hot fuel premium American consumers were likely to 
pay during the coming summer season. Using actual gasoline 
temperatures by month and by State and forecast prices for the 
summer, the staff calculated that gasoline retailers will sell 
over 500 million gallons of gasoline that are in effect created 
for free by thermal expansion. And consumers will pay over $1.5 
billion for those heat-expanded gallons, and they will be 
getting less energy for it. People are paying for gasoline they 
are not getting.
    Now, this is Big Oil's double standard. When they sell 
gasoline to each other it is temperature-adjusted so they are 
not cheating each other. But at retail, the oil companies 
oppose temperature compensation in this country. And although 
they oppose temperature compensation for retail sales in the 
United States, they universally use temperature compensation at 
retail in Canada.
    This summer this double standard will be worth $1.5 billion 
to the oil industry. Every American consumer is paying for this 
gasoline they are not getting. And it could be costing people, 
depending on how much they are filling up their tank, it could 
be costing each American motorist between 2 cents and eight 
cents per gallon.
    Now, think of how American consumers are going to respond 
to this when they realize they are already paying incredible 
prices for gasoline. And on top of that, they are paying for 
gas they are not getting. Understandably, then, there is much 
riding on the National Conference on Weights and Measures which 
will, this July, decide whether or not to encourage the use of 
the temperature compensation devices at the retail level.
    We will hear today from their chairman about their process, 
pressures and prospects. The bottom line we hope to answer 
today is not so much whether consumers may be overpaying for 
gasoline--we think there are some broadly accepted opinions on 
that--but the more basic question of what is the fair method of 
selling gasoline.
    There is a saying in America, ``What's fair is fair.'' 
Well, is it fair that the oil industry compensates for 
temperature at wholesale transactions, or is it fair when the 
industry sells uncompensated gallons at retail? And what is the 
fairness in the oil industry treating itself one way and 
consumers the other; having one standard in Canada and another 
in the United States, causing American motorists to have to pay 
a premium for hot fuel?
    These are the questions we are probing today.
    [The prepared statement of Hon. Dennis J. Kucinich 
follows:]

[GRAPHIC] [TIFF OMITTED] T1987.001

[GRAPHIC] [TIFF OMITTED] T1987.002

    Mr. Kucinich. And at this point, I want to recognize the 
gentleman from Illinois, Mr. Davis.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman. 
And let me thank you for holding today's hearing aimed to 
better understand how the petroleum industry in the United 
States addresses hot fuels. Today we find gas prices closing in 
on $4 per gallon. People all over the country are struggling to 
cope with increasing transportation costs and many are running 
out of options.
    While it is important that we as an American community seek 
new and creative ways to fuel our country, we must still 
attempt to solve the problem of exorbitant gas and oil prices. 
In the first 3 months of the year, gasoline imports to the 
United States fell 12 percent compared to the same period last 
year. Energy information agency data from May shows that 
gasoline demand from late April and early May rose 2.3 percent 
from the same period last year. And regular gasoline nationally 
averaged $2.97 a gallon, about $0.09 lower than the highest 
price ever.
    Higher demand, lower input, and higher prices all lead to 
the very scary realization that oil prices will continue to 
rise. In my own district my constituents are dealing with the 
possibility of increased fare hikes for public transportation 
partly because of higher fuel costs. Each and every one of us 
is dealing with higher fuel costs and it is imperative that we 
strive to find a solution that works.
    I am reminded of an incident that happened with my father 
and I. My father died not too long ago. He was 92-years old. 
And he grew up in an era when people were very proud. I mean 
they were as proud as they could possibly be. And he traveled 
around with me a great deal on the weekends when I was home. I 
stopped to get some gasoline 1 day and he jumps out of the car. 
And I said, well, what are you doing? He said, here, let me pay 
for it. I said ``No that is all right. I am a Member of 
Congress, I can certainly pay for gasoline.'' And the pump 
started going $10, $20, $30, $40. It gets up to about $50 and 
he said, ``Yeah, I guess you better go ahead and pay for it.''
    So I want to thank all of the speakers for coming today to 
help further inform us of the impact that consumers face 
regarding the effect that thermal expansion of gasoline has on 
the affected price of gasoline at the retail pump. I thank all 
of you gentlemen for coming to share with us this morning.
    Again, Mr. Chairman, I thank you for holding this hearing 
and yield back the balance of my time.
    Mr. Kucinich. I thank the gentleman.
    [The prepared statement of Hon. Danny K. Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T1987.003
    
    [GRAPHIC] [TIFF OMITTED] T1987.004
    
    Mr. Kucinich. The Chair recognizes Mr. Cummings from 
Maryland.
    Mr. Cummings. Mr. Chairman, I thank you very much for 
holding this hearing. It is vitally important. Most Americans 
these days are concerned with the extremely high price of gas. 
The average national price at the pump is currently $3.13 per 
gallon, and that may have changed within the hour, I don't 
know. The average price in Baltimore City, which I represent, 
is $3.04. We are a blue collar town, and our people have great 
difficulty. Many of them are locked into their income and to 
have to pay the kind of money that they are paying; it 
literally affects almost every single thing they do.
    There is indication that the costs will go up over the 
summer as demand rises and supplies go down. Just this 
Wednesday the government announced that refinery utilization 
fell 1.5 percent to 89.6 percent of capacity.
    Mr. Chairman, the American people rely on gas to fuel their 
cars so that they can get to work and get their children to 
school and visit loved ones. They simply can't afford the 
rising costs of filling up their tank. This is why this hearing 
is so very very important. This little-known practice by the 
petroleum industry has been robbing American consumers for 
decades.
    Mr. Chairman, I just read the letter from the Partnership 
of Uniform Marketing Practices [PUMP] Coalition, and as I read 
this letter I got angrier and angrier because basically what 
they say is, slow the process down, suspend everything, we have 
to study this and we are going to study this some more, The 
National Academy of Sciences is studying it, just hold up.
    I have often said that true leadership has to have a sense 
of urgency, because people are affected every single day by 
these gas prices. If this practice is in any way causing people 
to pay more at the pump, if it is causing them to pay a dime, 
let's say a penny more at the pump than they should be, we need 
to look at it and we need to address it in an urgent fashion.
    Finally, let me say this, Mr. Chairman. Sometimes as I have 
watched, and having been here for the 11 years I have been here 
in Congress, one of the things that I have noticed--and I have 
said this to you before--is that a lot of times industries rely 
on us to hold a hearing every 2 or 3 years. So therefore it 
becomes a big issue. It is reported in the press, and so they 
say wait, wait, wait, and we do wait. By that time there are a 
new set of players, there's a new chairman, and the issue sort 
of just drifts away. But in the meantime, families have 
suffered, people have been literally--money has been literally 
taken out of their pocketbooks.
    And I am just begging you, Mr. Chairman, to stay on top of 
this issue. I know you will, and maybe we do need to--maybe 
some of these studies are--we need to look at them? But we need 
to have some date certain when these studies are complete so 
that we can bring folks back and say, OK, you asked us to wait 
for a study; we got a study. And it will be interesting to read 
what these studies say.
    Finally, I guess some of the most compelling--and I hope 
our witnesses will testify to this--some of the most compelling 
information came, Mr. Chairman, in your statement when you 
talked about how the system is being used in Canada but not 
used here in the United States. Help me with that. I don't 
understand how we can go across the border and they can use a 
system; and you travel a mile and go across the border, and 
then it is a whole other situation. Something's wrong with this 
picture and it's up to us to try to, first of all, ferret out 
what is wrong and then try to address it as best we can.
    Thank you Mr. Chairman.
    Mr. Kucinich. I want to thank the gentleman from Maryland.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]

[GRAPHIC] [TIFF OMITTED] T1987.005

[GRAPHIC] [TIFF OMITTED] T1987.006

[GRAPHIC] [TIFF OMITTED] T1987.007

    Mr. Kucinich. I want the gentleman to know and also to our 
distinguished colleague who has just joined us, Diane Watson 
from California, to know that we did invite the oil companies 
to be here today and that they did not accept our invitation. 
But we will invite them again. And I would like to recognize 
the distinguished Congresswoman from California, Diane Watson.
    Ms. Watson. Thank you so much, Mr. Chairman. You are always 
right on target. In recent years Americans have had to 
continuously adjust to the steady rise in our Nation's gas 
prices. With prices reaching $4 a gallon in many areas of the 
country, our constituents are facing enormous prices at the 
pump while Big Oil reaps considerable profits. Every day our 
constituents have had to make a choice between either putting 
gas in their cars, food on their table for their families, or 
buying expensive prescription drugs.
    Since 2006, gas prices in my home State of California alone 
have increased almost 10 percent. The average price of gasoline 
in the United States escalated to $3.18 per gallon in May 2007, 
even when adjusted for inflation. These were some of the 
highest prices that were ever recorded. As these prices are 
steadily rising, the organization of the petroleum exporting 
countries and others continue to sit back and maintain an idle 
hand.
    This committee must take action on this issue, and I 
appreciate so much the Chairperson calling us together. 
Hurricane Katrina was the Nation's largest natural disaster 
ever recorded. Not only did this disaster displace thousands of 
American citizens, it also left our wetlands destroyed and 
interfered with the production of our Nation's oil refineries.
    Gas prices during this time were topping off at nearly 
$2.80 per gallon on the average. And yet, even during a natural 
disaster, gas prices then were better than they are in today's 
economic climate.
    So, Mr. Chairman, again I want to commend you on this 
timely hearing that affects every American consumer. It is 
crucial that we adhere to national interest and not to the Big 
Oil companies. And I am fully aware that in order to improve 
the economic dilemma that we are facing, we must first revisit 
our energy policies and make sure they are adhering to our 
Nation's needs.
    Congress must focus on giving our constituents reliable 
service at fair market prices. And I look forward to the 
testimony from our witnesses today and hope that we can work 
together to find solutions that will lessen our energy 
dependence and reduce the economic pressures that lay upon so 
many Americans each day.
    And I want to say we are giving subsidies to the oil 
companies when they are making huge profits. And particularly, 
I think, it was scandalous that during Katrina they made 
between $300 million and $400 million. They don't need our 
subsidies. People need relief.
    So, thank you. I yield back.
    Mr. Kucinich. I thank the gentlelady.
    [The prepared statement of Hon. Diane E. Watson follows:]

    [GRAPHIC] [TIFF OMITTED] T1987.008
    
    [GRAPHIC] [TIFF OMITTED] T1987.009
    
    [GRAPHIC] [TIFF OMITTED] T1987.010
    
    [GRAPHIC] [TIFF OMITTED] T1987.011
    
    Mr. Kucinich. I want to thank all Members of Congress who 
have given opening statements. And I welcome your participation 
in the questioning of witnesses.
    The subcommittee will now receive testimony from the 
witnesses before us today. I want to start by welcoming our 
first panel and to tell members of the committee and the public 
a little bit about them.
    Mr. Richard Suiter. Mr. Suiter is the Weights and Measures 
Coordinator at the National Institute of Standards and 
Technology. His responsibilities include training of the 
national-type evaluation program laboratories in the area of 
liquid measuring devices, training State and local weights and 
measures officials, and serving as technical adviser to the 
National Conference on Weights and Measures Specifications and 
Tolerances Committee where he conducts research, analysis of 
technical issues and provides guidance to committee members.
    Next, Mr. Michael Cleary. Mr. Cleary is chairman of the 
National Conference on Weights and Measures, which will be 
considering a proposal to encourage temperature compensation 
for retail gasoline sales at its July meeting. He is formerly 
the director of the California Division of weights and 
Measures, and is currently special assistant to the chief legal 
counsel at the California Department of Agriculture.
    Mr. Martin Gafinowitz was appointed president of both 
Gilbarco and the Veeder-Root Co. in 2006, having previously 
served as the top executive in Gilbarco since 2003 and, before 
that, a senior executive in the Veeder-Root Co. Mr. Gafinowitz 
has been an executive with the Danaher Corp., which is the 
parent company of Gilbarco Veeder-Root since 1991.
    Finally, in the first panel, Mr. John Siebert is a project 
manager, researcher, and communications training specialist who 
works with the Owner-Operator Independent Drivers Association 
Foundation producing education safety materials for independent 
truckers. He also performs survey research concerning driver 
behavior and attitudes. It is not much of a stretch to say that 
Mr. Siebert is the discoverer of the issue that brings us here 
today. While hot fuels were well known to the petroleum 
industry and weights and measures professionals, Mr. Siebert 
was one of the first civilians to figure it out.
    I want to thank all of the witnesses for appearing. It is 
the policy of the Committee on Oversight and Government Reform 
to swear in all witnesses before they testify. I would ask the 
witnesses to stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Kucinich. Let the record reflect that the witnesses, 
each of them answered in the affirmative. I ask that each of 
the witnesses now give a brief summary of their testimony and 
to keep in mind that it would be good to keep this summary 
under 5 minutes in duration. Your complete written statement 
will be included in the record.
    Mr. Suiter, you will be our first witness, and please 
proceed.

STATEMENTS OF RICHARD SUITER, WEIGHTS AND MEASURES COORDINATOR, 
NATIONAL INSTITUTE OF TECHNOLOGY AND STANDARDS; MICHAEL CLEARY, 
 CHAIRMAN, NATIONAL CONFERENCE ON WEIGHTS AND MEASURES; MARTIN 
GAFINOWITZ, CEO, GILBARCO VEEDER-ROOT; AND JOHN SEIBERT, OWNER-
         OPERATOR INDEPENDENT TRUCK DRIVERS ASSOCIATION

                  STATEMENT OF RICHARD SUITER

    Mr. Suiter. Chairman Kucinich and members of the 
subcommittee, thank you for the opportunity to testify. I look 
forward to discussing what the National Institute of Standards 
and Technology [NIST], part of the Department of Commerce does 
to establish uniformity in weights and measures requirements 
and practices for the U.S. economy and how thermal expansion of 
gasoline relates to compensation issues in the marketplace.
    NIST has no weights and measures regulatory authority. 
Instead, NIST fosters efficient and equitable transactions in 
the domestic and global marketplace through sound science to 
enable sound policies. In this case NIST provides technical 
guidance to the National Conference of Weights and Measures 
[NCWM]. The NCWM, which consists of weights and measures 
officials, device manufacturers, users and consumers, serves as 
a forum for the development of weights and measures 
requirements and practices in the United States.
    Through its association with the NCWM, NIST provides three 
types of technical weights and measures information to the 
States, including requirements for equipment in NIST handbook 
44, model regulations in NIST handbook 130, and test procedures 
in NIST handbook 133. NIST handbooks 44 and 130 take on the 
effect of law when adopted in State law, rule, or regulation.
    NIST provides technical guidance on the requirements in 
handbook 44 and 130. Each State has the final decision on how 
the requirements are implemented and enforced. For over 30 
years, temperature compensation has been discussed. NIST has 
been in the middle of the discussion, providing technical 
advice and information.
    Temperature compensation, as it relates to the sale of 
petroleum, is an adjustment made to assure that each gallon of 
fuel sold contains the same energy content. To put it simply, 
energy per unit of fuel is measured at 60 degrees Fahrenheit. 
When the external temperature is warmer, it causes the fuel to 
expand. With automatic temperature compensation, the measuring 
device on an application adjusts the volume indicated for any 
delivery to a referenced temperature. For petroleum products, 
the referenced temperature is 60 degrees Fahrenheit, which was 
established in the 1920's by the then-National Bureau of 
Standards and the American Petroleum Institute.
    Some States specify that a gallon of gasoline is defined as 
231 cubic inches at 60 degrees Fahrenheit. The State of Hawaii, 
which has a tropical climate, has adopted an alternative 
referenced temperature of 80 degrees Fahrenheit for petroleum. 
In some States, compensating for temperature of refined 
petroleum products takes place at the wholesale level but not 
at the retail gasoline or diesel pump or for delivery of home 
heating fuel. Some States prohibit temperature compensation at 
retail, some States prohibit temperature compensation anywhere 
in the petroleum distribution chain.
    Most States require temperature compensation for certain 
products such as liquefied petroleum gas sales or propane for 
home heating. The NCWM and its standards committees have paid 
particular attention to temperature compensation issues for the 
past 7 years.
    In 2004, NIST, as technical adviser to the NCWM, developed 
a presentation on the technical aspects of temperature 
compensation and its impact on the measurement and testing of 
petroleum products. The presentation included an explanation of 
temperature compensation and a history of temperature 
compensation issues: examples of automatic temperature 
compensation equipment; effects of temperature compensation on 
product and test equipment; current and proposed requirements 
for temperature compensation; test procedures and equipment for 
testing devices with automatic temperature compensation; 
changes in the handling and storage of refined petroleum 
products in the marketplace, such as single- versus double 
walled storage tanks and electronic versus mechanical meters; a 
review of the application of temperature compensation to 
petroleum volume data, showing average fuel storage tank 
temperatures in the United States and the possible effect on 
petroleum measurement.
    The data on storage tank temperatures, collected by a 
manufacturer of tank monitoring equipment over a 2-year period, 
indicated that the average temperature of product in below-
ground storage tanks across the United States was 64.7 degrees.
    In conclusion, NIST serves only as a technical adviser and 
has no voting role in the process of the NCWM, the organization 
that provides a framework to individual jurisdictions. NIST 
analysis, however, shows that temperature compensation can be 
used to ensure accurate measurement of energy content in fuels 
being sold.
    We will continue to work with State and local officials, 
industry, and the public to ensure informed decisionmaking and 
to enhance the reliability of measurements in the marketplace.
    Thank you for the opportunity to testify and I would be 
happy to answer any questions that the committee may have.
    Mr. Kucinich. I thank the gentleman.
    [The prepared statement of Mr. Suiter follows:]

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    Mr. Kucinich. Mr. Cleary.

                  STATEMENT OF MICHAEL CLEARY

    Mr. Cleary. Thank you very much, Chairman Kucinich and 
members of the subcommittee. Thank you for the opportunity to 
testify today on hot fuels and the impact on the transactions 
of thermal expansion of gasoline. I look forward to discussing 
the role the National Conference on Weights and Measures place 
to establish uniformity in weights and measure requirements and 
what we are currently debating in our consensus organization.
    Some background on the National Conference on Weights and 
Measures. On January 16, 1905, the National Bureau of 
Standards, today known as the National Institute of Standards 
and Technology, invited the States to participate in the 
development of uniform weights and measures for the United 
States. The relationship grew into what was known as the 
National Conference on Weights and Measures.
    The United States is one of the only countries in the world 
without a Federal weights and measures regulatory agency. In 
the United States each jurisdiction funds its own weights and 
measures program based on budgetary priorities in that 
particular State. The Conference is fully funded by the 
membership. NIST today provides the Conference with technical 
advisers to assist in the development of standards.
    As a standards development body committed to the consensus-
building process, the Conference has created a model process 
that generates high praise from both regulators and business 
representatives alike. The National Conference serves as a 
forum for the development of weights and measures requirements 
and practices in the United States.
    Membership in the National Conference is open to all 
interested parties, including weights and measures regulatory 
officials, device manufacturers, users and consumers. An 
environment of inclusion gives voices to all in every step of 
the way. In this way, the National Conference has addressed 
some of the most important economic issues of our time.
    The end result, ongoing contributions from industry 
experts, assist in producing final standards that reflect the 
latest technical innovations. It is the National Conference 
members who provide the input for the four national conference 
committees. And these committees provide for the standards 
development for each of the specific areas. They also provide 
counsel on weights and measures issues as they emerge in the 
marketplace by drawing on the expertise of our diverse 
membership of public and private sector members. Most issues 
come to the National Conference committees through one of the 
regional weights and measures associations: the central, the 
northeastern, the southern and the western weights and measures 
association. But the Conference committee can accept important 
issues from any source.
    At the National Conference annual meeting, standing 
committees review all comments received since the intermeeting. 
They hold open hearings to discuss further, make revisions to 
the recommendations as needed, and produce the final report. 
Final reports are then presented in open forum to the 
representatives and delegates for a vote.
    As a standards development body committed to consensus-
building, the National Conference has created a model process 
that has generated high praise from both regulators and 
business representatives alike. Our board of directors oversees 
the activities of the four standing committees and the standing 
committees of the board of directors; specifications and 
tolerance committee; laws and regulation committee; and the 
professional development committee.
    I would like to talk about temperature compensation at this 
time. For many years the issue of temperature compensation as 
it relates to petroleum products has been discussed and debated 
in the weights and measures community and at the National 
Conference. The issue of how to standardize the sale goes back 
in history to the early 1900's when Standard Oil Trust funded 
the American Petroleum Institute, working with then the 
National Bureau of Standards, to set the size standard gallon 
of petroleum product. This study was conducted at the time for 
the purpose of inventory control for the petroleum industry. 
The study was conducted between 1912 and 1917. And in 
conjunction with an agreement with Great Britain, the standard 
was set at 231 cubic inches at an ambient temperature of 60 
degrees.
    From that time on, temperature compensation has been used 
by the petroleum industry to adjust the delivery of petroleum 
products at the wholesale level. The question of whether this 
adjustment should or could be made at the retail level has been 
debated at the National Conference on Weights and Measures for 
years. In 1974, the 59th Conference had a detailed proposal to 
allow permissive temperature compensation at the retail level 
proposed by the State of Hawaii. A very heated discussion took 
place, remarkably similar to the debate currently facing the 
Conference. The primary difference in the arguments pro and con 
today is the availability of equipment that would make it 
possible. The equipment exists today but would add costs to the 
petroleum industry.
    In 1974 the motion was defeated, but the issue continues to 
be discussed, and over the last 7 years it evolved into what 
the Conference is debating today. What the Conference is 
debating today is a proposal that would be a model law for the 
States to consider adopting that would allow permissive 
temperature compensation at the retail level. The proposal 
would detail if temperature compensation is used, how it would 
be used in order to prevent the facilitation of fraud. This 
proposal is currently a voting item scheduled to be further 
debated and could be voted in July of this year at our annual 
meeting in Utah.
    As chairman of the Conference, I am not here today to take 
a position one way or another on the issue as the Conference 
has not as yet voted on the current proposal before the 
membership. I have, however, called for establishing a steering 
committee working within the Conference to continue the 
technical issues surrounding this issue, as I believe work will 
be needed to be done regardless of how the vote goes in July.
    For your information, I have attached a copy of the 
temperature compensation proposal before the Conference, 
including the comments that have been made relevant to it, for 
your review.
    I thank you for the opportunity to testify before you 
today. I would be happy to answer any questions the 
subcommittee might have about our Conference or the general 
debate on this particular issue. Thank you, sir.
    Mr. Kucinich. I thank the gentleman.
    [The prepared statement of Mr. Clearly follows:]

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    Mr. Kucinich. Mr. Gafinowitz has submitted a statement for 
the record. And do I understand that is your statement and you 
will be available for questions. Did you want to make any 
comments?

                 STATEMENT OF MARTIN GAFINOWITZ

    Mr. Gafinowitz. Thank you very much, Mr. Chairman, for the 
opportunity to testify and I will be happy to answer any 
questions.
    Mr. Kucinich. When we get to the question part make sure 
the mic is closer. Thank you.
    [The prepared statement of Mr. Garfinowitz follows:]

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    Mr. Kucinich. Mr. Siebert, would you proceed?

                   STATEMENT OF JOHN SEIBERT

    Mr. Siebert. I am John Siebert, project leader for the 
Owner-Operator Independent Drivers Association Foundation. 
Thank you, Mr. Chairman, and distinguished members of the 
subcommittee, for inviting me to talk about the retail sale of 
hot fuel.
    The Owner-Operator Independent Drivers Association is the 
Nation's largest trade association representing small fleets 
and truck drivers. Many of our members were reporting a wide 
range of fuel mileage from one fill-up to the next. And that 
prompted the foundation to perform a nationwide survey of 
diesel fuel quality. The only significant variable we could 
find was temperature of the fuel. We had temperatures reported 
as high as 114 degrees.
    Here are the reasons why dispensing hot fuel creates 
problems. The petroleum industry uses a reference temperature 
of 60 degrees Fahrenheit to determine volume of a gallon of 
fuel. As with many materials, when heated fuel expands, 
increasing its volume, retail pumps do not compensate for this 
expansion. Subsequently, each gallon that is measured by volume 
has less energy inside it.
    Internal combustion engines run on energy, not volume. 
Through every step of the petroleum production distribution, up 
to and including the refinery rack, volume is computed using 
temperature compensation. However temperature compensation is 
not used after the tank truck fills up at the refinery rack, 
because the U.S. retail fuel pumps do not use temperature 
compensation. If fuel is hot, the 8,000 U.S. petroleum gallons 
at the rack may turn out to be 8,240 U.S. standard gallons 
which the retailer sells, but each gallon has a reduced amount 
of energy.
    Simply put, American consumers are not getting what they 
pay for. Consumers are paying for energy they do not receive. 
This can equal $27 to $45 per car per year. Consumers are also 
paying a Federal gasoline tax of around $140 million on these 
expanded gallons' taxes which are never remitted to the 
government.
    How does it affect OOIDA members? Well, our members 
consumed 4.1 billion gallons of diesel fuel in 2006. At $2.65 
per gallon, that equals $11 billion of purchases. And for 
truckers, hot fuel can equal losses of $450 to $630 per truck 
annually.
    What can be done? Well, the new automatic temperature 
compensated pumps, or ATC retrofitted pumps, dispense an amount 
of fuel that is equal to a gallon at 60 degrees, regardless of 
the temperature the fuel actually is. There are already 
precedents for this. In 1975, Hawaii adopted a gallon of 
gasoline that was sized as if it were 80 degrees. Since 1995, 
Puerto Rico has had legislation mandating temperature 
compensation at retail pumps; however, it has never been 
implemented. And in Canada, where the fuel is cooler, retailers 
were very supportive of a voluntary converting over to 
automatic temperature compensation pumps.
    Why hasn't it been addressed before? Well, last year it is 
estimated that retailers made an additional $2.3 billion off of 
hot fuel sales. Petroleum producers and retailers seem to be 
universally opposed to adopting ATC at the retail level. This 
reminds us old-timers of making sure that the meat cutter kept 
his thumb off the scales when selling us a pound of hamburger. 
Fuel retailers are meat cutters. Their thumbs are on the scale. 
They are ripping off American consumers some $2.3 billion each 
year.
    The Petroleum Marketers Association of America has stated 
that mandating temperature compensated or retrofitted pumps for 
fuel stations would increase the price consumers must pay for 
fuel. Well, retailers are facing a one-time charge that is 
nearly equal to the annual losses by consumers due to hot fuel.
    The PMAA admits that hot fuel provides less energy, but 
will tell you it all balances out when you are buying cooler 
fuel in the winter. I direct you to the charts and graphs in my 
written statement which show this just isn't true. Since 
temperature affects the energy content of retail fuels, it is 
important that the buyer be just as aware of it as is the 
seller. Temperature compensation retail pumps make the entire 
transaction transparent and allows consumers to shop for their 
best fuel values, because every gallon of similarly labeled 
products will contain this same energy content.
    Mr. Chairman, distinguished members of the subcommittee, 
again thank you for allowing me to talk about hot fuel, and I 
stand ready to answer any questions you might have.
    Mr. Kucinich. Thank you very much Mr. Siebert.
    [The prepared statement of Mr. Siebert follows:]

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    Mr. Kucinich. We are now ready to go to questions of the 
panel. I would like to begin with some questions of Mr. 
Gafinowitz, whose company, I understand, manufactures the 
automatic temperature compensation devices. And because of your 
unique understanding of this, the committee is very grateful 
for your presence here today so that we in the States may be 
better able to understand how this technology works.
    And I would like to start by: Where do you sell your 
temperature compensating devices Mr. Gafinowitz.
    Mr. Gafinowitz. We primarily sell temperature compensated 
devices in Canada.
    Mr. Kucinich. Have you ever received complaints from your 
customers in Canada that your automatic temperature 
compensating devices do not work accurately?
    Mr. Gafinowitz. No, we have never received those 
complaints.
    Mr. Kucinich. I assume your Canadian customers would 
include readily identifiable names here in the United States?
    Mr. Gafinowitz. There are certainly readily identifiable 
names among our Canadian customers.
    Mr. Kucinich. Would those names be ExxonMobil, Shell Husky, 
companies like that.
    Mr. Gafinowitz. I think all of those companies do market 
fuels in Canada.
    Mr. Kucinich. Mr. Gafinowitz, you applied with the State of 
California, if I am correct, to certify your automatic 
temperature control devices for sale in California on or around 
December 2006. Why?
    Mr. Gafinowitz. Mr. Chairman, I think everybody is aware 
there has been a tremendous amount of market interest and 
discussion on automatic temperature compensation. We put out 
equipment in front of the California regulatory body for 
certification to see what would be required to bring this 
equipment to market in the United States.
    Mr. Kucinich. And, of course, there was a cost associated 
with the application. What was it.
    Mr. Gafinowitz. The cost actually associated with the 
application is minimal. I am not sure of the exact figure, but 
it is a minimal cost.
    Mr. Kucinich. Something in the nature of $3,000?
    Mr. Gafinowitz. It sounds like you are more familiar with 
the exact number than I am, sir.
    Mr. Kucinich. Why was Gilbarco willing to spend any money 
to obtain certification?
    Mr. Gafinowitz. It seemed highly likely that at some point 
the equipment would be available for sale in the United States.
    Mr. Kucinich. So you thought you could sell them.
    Mr. Gafinowitz. Well, our company was looking to prepare 
ourselves for the point in time when there was market demand 
for that equipment and wanted to understand what would be 
required to bring that equipment to market in the United 
States.
    Mr. Kucinich. Why were you under the impression that you 
would be able to sell the automatic temperature compensation 
device in California?
    Mr. Gafinowitz. There had been a tremendous amount of press 
coverage on the need for automatic temperature compensated 
devices and some of the States had begun looking at legislation 
for that equipment.
    Mr. Kucinich. Now, have you in fact sold any of your 
automatic temperature compensation equipment in California?
    Mr. Gafinowitz. We do not have the equipment on the market 
in California or elsewhere in the United States.
    Mr. Kucinich. Why not?
    Mr. Gafinowitz. The work we did with the California 
regulators was in preparation for bringing that equipment to 
market. We never actually attempted to bring the equipment to 
market. The reason we didn't do that is for us to sell any 
equipment, we need demand from our customers. When there is 
demand from our customers, we will be ready to sell the 
equipment.
    Mr. Kucinich. You are saying there might be an interest but 
there may not be a demand?
    Mr. Gafinowitz. Sir, I burden of proof, sir.
    Mr. Kucinich. Mr. Gafinowitz, let me read from the minutes 
of a meeting of the National Conference on Weights and 
Measures, Laws and Regulations Committee, and this is a quote: 
A meter manufacturer testified that a decision on this issue 
was needed, indicating that parameters must be defined and a 
decision to allow or disallow temperature compensation in 
retail fuel transactions is necessary for the industry to 
determine its direction on the matter. The manufacturer stated 
that his company is receiving increased calls from customers 
requesting the technology and mentioned two major manufacturers 
who currently have developed ATC devices. He recommend that the 
committee pursue permissive, not mandatory, language in 
developing the model regulation. The manufacturer noted that 
previous attempts to submit automatic temperature control 
devices for type approval has been rejected and therefore 
certificates of conformance cannot be obtained.
    Did your company receive increased calls from customers 
requesting the technology?
    Mr. Gafinowitz. We received calls from a small number of 
customers interested in that technology.
    Mr. Kucinich. And what happened to these potential 
customers.
    Mr. Gafinowitz. We are not currently in a position to 
supply that, because prior to our work in California, the 
equipment wasn't certified for sale in the United States.
    Mr. Kucinich. So you are saying after certification, you 
had no customers. Is that what you are saying?
    Mr. Gafinowitz. First, it was a relatively limited demand 
that we received from customers. And even post certification 
from California, the equipment is not yet ready for market. 
There is still some work that needs to be done.
    Mr. Kucinich. As I listen to your testimony, what occurs to 
me is that you have interests from customers 1 day and not the 
next. And, Mr. Gafinowitz, I think the question everyone wants 
to know is: Are you aware of efforts made by oil companies to 
pressure customers for your automatic temperature control 
devices to suddenly lose their interest?
    Mr. Gafinowitz. We have not been pressured not to sell the 
equipment. I think the industry's position on this equipment is 
fairly widely stated, that the industry and the number of 
industry bodies are not in favor of installing this equipment.
    Mr. Kucinich. Let me just say I can understand that this is 
a difficult topic for you to discuss, because the question 
relates to not whether they pressured you but pressured the 
customers. And I think, after all, isn't it true that most of 
your company's business is concerned with selling other types 
of devices to the oil industry other than ATCs? And your 
company's customers for other lines of business are in the oil 
industry; isn't that correct?
    Mr. Gafinowitz. That is correct.
    Mr. Kucinich. And under these circumstances, believe me, I 
can understand that Gilbarco might feel uncomfortable. But it 
is so important that we have a chance to discuss this, because 
it is an issue of great social importance to millions of 
consumers who drive to work every day, take family vacations in 
their car, shuttle their kids to soccer games.
    If there are barriers to the introduction of fair measuring 
of gasoline in the United States, if there is a coordination in 
the industry to keep these automated temperature compensation 
devices out of the retail market, I would say that this is 
something which this committee and this Nation needs to know. 
And I want to really see what the real story is behind the 
disappearance of automatic temperature control customers in the 
United States.
    Do you have any ability or willingness to tell the 
committee who those interested customers were?
    Mr. Gafinowitz. I do not know who the specific interested 
customers were.
    Mr. Kucinich. Can you tell the committee who might be able 
to help the committee learn who they were?
    Mr. Gafinowitz. Most of our business is transacted in the 
U.S. market through a large number of third-party resellers and 
distributors. The demand that we received or the inquiries we 
received is likely to have come through those distributors 
rather than direct to our company.
    Mr. Kucinich. I want to say that, you know, we are going to 
read your testimony very carefully and consider if we might 
need you to come back at a later date. I think that the 
committee might be getting a little bit more information here 
as to why the oil company executives refused to appear before 
this committee. Because this question about whether or not the 
oil companies have taken any action to frustrate the automatic 
temperature control device's appearance on the market becomes a 
very serious issue.
    Now, I have some other questions, but I am going to defer 
to members of the committee right now for their time.
    Mr. Davis is recognized for 5 minutes.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
    Mr. Suiter, let me ask you, from a scientific perspective, 
would you say that the use of two different methods of 
measurement for gasoline is fair?
    Mr. Suiter. I am sorry, I didn't hear the last part of your 
question.
    Mr. Davis of Illinois. Would you say that it is fair from a 
scientific perspective to use these two different methods to 
measure gasoline?
    Mr. Suiter. The work that has been done at NIST is not 
really an issue of fairness, though we do strive to achieve 
equity in the marketplace. Temperature compensation will 
provide an equal measurement of product at the dispenser.
    Mr. Davis of Illinois. And would you agree that the 
equipment and devices that have been developed provides pretty 
valid information?
    Mr. Suiter. From a standpoint of accuracy of measurement, 
if a device has had an approval or a certificate of conformance 
it would mean that, yes, it meets all of the legal requirements 
and can operate accurately.
    Mr. Davis of Illinois. Let me ask you, Mr. Seibert, in your 
testimony, you state that the trucks that your members drive 
average 6 miles to the gallon and that fuel at its highest 
operating expense reaches up to $47,700 a truck that a driver 
could spend in a year when the fuel is $2.65 a gallon. You also 
wrote that small business truckers examine their income and 
expenses down to a fraction of a cent per mile for every mile 
they travel. Does buying hot fuel that is not temperature 
adjusted virtually eliminate the profits of the small business 
person who is a trucker?
    Mr. Seibert. Sir, it doesn't eliminate the profits, but it 
certainly cuts into it. Truckers, especially independent 
truckers, will be working as many as 80, 90 hours a week for 
about $35,000 $40,000; and included in that is their hourly 
wage and their profits. They will have about $10,000 worth of 
profit, and $750--$500 to $750 off of that $10,000 profit is a 
sizable chunk of their profit for the year, yes.
    Mr. Davis of Illinois. I understand that about 75 percent 
of the retail pumps in Canada actually are using this 
equipment. And while you can't necessarily subscribe the 
motives of the industry in terms of what it might or might not 
do, I wouldn't imagine, but in your expert opinion, if the 
pumps have this technology in Canada and they are the same 
businesses, the same industries, the same corporations, the 
same companies, why would you think that they are being used in 
Canada and not being used in the United States?
    Mr. Seibert. Because the temperature of the fuel in the 
tanks in Canada is generally below the 60-degree standard; and 
so if you buy fuel at the rack temperature compensated to 60, 
you are actually selling more energy per standard Canadian 
gallon than they bought. So it was an economic hit for them. 
They were having to artificially work within the market to have 
a price that would give them a profit.
    In the United States, when it is only that way across the 
northern tier of States and the southern tier and the west 
primarily have warm temperatures, it is an economic boon for 
the oil-producing company and the retailers.
    Mr. Davis of Illinois. So it is an economic decision----
    Mr. Seibert. Absolutely.
    Mr. Davis of Illinois [continuing]. That the companies 
make.
    Mr. Seibert. Business practice.
    Mr. Davis of Illinois. And if I could just ask, and if you 
could, each one of you, answer yes or no, in a way, if you 
could, do you think that making use of this technology in any 
way tampers with our concept of the free enterprise system?
    Mr. Seibert. Absolutely not. The free enterprise system is 
based on both the buyer and the seller having the same 
knowledge of the operation of the product; and when one party 
in the buying and selling transaction in free enterprise has 
particular knowledge about that product's operation and doesn't 
share it with the other person, that is considered a violation 
of the free enterprise system.
    Mr. Davis of Illinois. Mr. Gafinowitz.
    Mr. Gafinowitz. No, I don't believe it tampers with the 
free enterprise system.
    Mr. Davis of Illinois. Mr. Cleary.
    Mr. Cleary. I don't believe it tampers with the free 
enterprise system at all. I just believe for it to be equitable 
in the marketplace a decision has to be made to do it across 
the board or not. You can't possibly hit or miss with 
temperature compensation. If you had a service station on one 
side of the street temperature compensating and a station on 
the other side wasn't, how would the consumer be able to make a 
decision as far as, you know, basing their decision on 
purchasing a product one way or the other based upon price?
    Mr. Davis of Illinois. Mr. Suiter.
    Mr. Suiter. No.
    Mr. Davis of Illinois. Thank you, gentlemen, very much.
    Thank you, Mr. Chairman.
    Mr. Kucinich. All right. Thank you, Mr. Davis.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I want to pick up on where Mr. Davis left off, and I want 
to go to you, Mr. Cleary. The National Conference on Weights 
and Measures mission statement is to advance a healthy business 
and consumer climate through fair and equitable weights and 
measures standards. Is that correct?
    Mr. Cleary. Yes, sir.
    Mr. Cummings. Is the double standard created by different 
measurement standards for gasoline and diesel fair and 
equitable, as the NCWM suggests? I mean, is it consistent with 
what you all are supposed to be trying to do?
    Mr. Cleary. I think the fact that we are actually debating 
and trying to resolve the issue shows that we are trying to 
achieve that equity, sir.
    Mr. Cummings. I want to put a pen in that and come right 
back to that.
    Mr. Cleary. Yes, sir.
    Mr. Cummings. Using the data provided by NIST, the 
subcommittee calculated that 513.8 million gallons of gasoline 
sold in the summer of 2007 will be attributable to the thermal 
expansion of gasoline and that consumers will pay a hot fuel 
premium this summer in the range of $1.5 billion--not million--
billion. Does the cost to the consumers violate the concept of 
fair and equitable that the NCWM claims to be their mission 
statement? If what I said was accurate, does it violate it?
    Mr. Cleary. If what you said is accurate, I would say we 
would be deeply concerned about that issue taking place. And 
what I can offer you, sir, is the fact that we have people 
within the conference who are passionately in favor of 
temperature compensation at the retail level and are working 
passionately to try to develop and pass a model law that the 
States can adopt. We have people at the conference who are 
equally as passionate feeling as if temperature compensation is 
not the correct way to go.
    Mr. Cummings. Who is against it?
    Mr. Cleary. Various individuals within the conference. We 
have 2,400 members, sir.
    Mr. Cummings. Well, OK. There have to be groups. The 
chairman--you know, we have but so much time do these hearings 
and to do investigations----
    Mr. Cleary. Yes, sir.
    Mr. Cummings [continuing]. And part of our mission is to 
make sure the taxpayers' dollars are spent effectively and 
efficiently. We want the people who are against it to come 
before us so we can understand what their issue is so we can 
examine them, so we can make the best use of our time. And so--
and we want to be in a position to be able to look at what the 
NCWM is doing and make some kind of determination as to whether 
or not they are dealing with this situation fairly.
    Now, you are--what is your position? I mean, in other 
words, with the NCWM.
    Mr. Cleary. My position, I am the chairman of the 
conference.
    Mr. Cummings. You are the chairman.
    Mr. Cleary. Yes.
    Mr. Cummings. You are the man. So what I want to know is, 
since you are the chairman, I am asking you for the benefit of 
all of us so that we can be efficient and effective in our 
efforts and so that we can help consumers who are out there 
right now trying to pay for gas that they cannot afford, I am 
asking you, Mr. Chairman, who is against it? I think that is a 
fair and reasonable question. And if you want to give us a list 
in a day or so, by Monday, so that we can examine those, talk 
to those people and see who we are dealing with, I would 
appreciate it if you would do that.
    I don't want to put you on the spot, but I assume you would 
know, and I assume you are supposed to be acting in the best 
interests of a healthy business and consumer climate through 
fair and equitable weights and measures. So consistent with 
your duties as the chairman, I am begging you, I am not asking 
you--no, I am asking you, because I shouldn't have to beg, for 
you to provide us with that information.
    Mr. Cleary. I would like to tell you that the people who 
have concerns about temperature compensation at the conference, 
a lot of the people are technical people who have concerns 
based on the fact that they want to make sure that this 
equipment operates correctly. And if it is in the marketplace, 
we need to know how to test the equipment, how to go out there 
and check the pump to make sure it is working properly. They 
want to know that the devices that are sold have been approved 
for use and that they are going to work. They want to make sure 
that if the technology is used fraud doesn't take place.
    Mr. Cummings. Right. And they are already doing it in 
Canada. Is your organization looking at the Canadian model?
    Mr. Cleary. Absolutely, sir. We have membership in our 
organization from the Canadian regulatory officials, and they 
have been helping us tremendously to try and sort this out.
    Mr. Cummings. I see my time is running out, but I have to 
ask you this. Their suggestions of delaying the July vote on 
voluntary standards, how would such a delay be fair and 
equitable to the consumers you are charged with protecting and 
who are paying the $1.5 billion premium?
    First of all, is there--have you all--I know you are the 
chairman, so you would know this information. Have there been 
discussions about a delay of a vote?
    Mr. Cleary. Yes, sir, there has.
    Mr. Cummings. And what is the basis of the delay?
    Mr. Cleary. The people who are calling for the issue to be 
reduced to an informational item for the time being feel that 
the issue is not ready yet for a vote.
    Now, if you ask me for my personal opinion----
    Mr. Cummings. Yes, I would love to hear that.
    Mr. Cleary [continuing]. I feel the issue is ready for a 
vote, and it should be voted on in July.
    Mr. Cummings. Is there anything you would like for us to do 
to encourage a vote, since our consumers are suffering greatly, 
so that we can kind of urge you all to do a vote? I mean, is 
there anything that we can do, you would like for us to do to 
help you, since you are the man?
    Mr. Cleary. I am a volunteer. I just want to state for the 
record this is a voluntary organization.
    Mr. Cummings. You are the volunteer man.
    Mr. Kucinich. Just remember no good deed goes unpunished.
    Mr. Cleary. Exactly. The chairman of the conference 
generally is the person who just doesn't show up for the 
meetings, so to speak. But, you know, certainly your 
encouragement will be brought back to the conference, and I 
will do just that.
    Mr. Cummings. Thank you very much.
    I see my time has run out. Thank you, Mr. Chairman.
    Mr. Kucinich. Yes, sir. Mr. Cummings, I think your time 
actually is just beginning.
    The Chair recognizes the gentlelady from California.
    Ms. Watson. Thank you very much, Mr. Chairman.
    In listening to this past dialog it occurs to me maybe we 
need to have a hearing, Mr. Chairman, on the refineries. I am 
hearing about the technology and whether or not it is ready to 
move forward. You know, what is the problem with the 
refineries? They are saying the cause of the rise in a gallon 
of gasoline is due to the refineries, and they need to be--what 
is that--remodeled, they need to be brought up to standards, 
they need to be repaired. Maybe we ought to have a hearing on 
the refineries, since that is where everyone is pointing their 
fingers.
    Now, back to the questions at hand, think about it, I am 
going to suggest that Mr. Seibert answer these questions. 
According to an energy watchdog organization, Public Citizen, 
since 2001, the largest six oil companies operating in the 
United States--and they are Exxon, Chevron, Texaco, 
ConocoPhillips, BP Shell and Valero--recorded I guess $477 
billion in profit. Now do you think it would bring economic 
harm to these corporations to drop the double standard of hot 
fuel? The finger on the scale?
    Mr. Seibert. I can't see how it would. As a matter of fact, 
the impact on their profit margin is so small I don't know why 
the thumb is there.
    Ms. Watson. You know, I guess I am just being a little--I 
am using a little levity, but we can never get down to the 
reason for the rise in prices of gasoline except refineries. It 
is going to bring great harm. I think it is calculated and 
manipulated with an intent that is, in my estimation, just 
greed. So because we are having this hearing that is being 
recorded, both video and audio, can you--and you can be 
cautious--what do you really think is going on?
    Mr. Seibert. In my heart of hearts, I think that we have an 
unspoken collusion. It doesn't need to be organized. It doesn't 
need to be back room. We have deregulated an industry and told 
them that they are in charge of supply, and they have very 
graciously taken that and used it in great American 
entrepreneurship. They reduced the supply and increased the 
demand.
    Ms. Watson. We measure our words here because everything we 
say goes down. But I think the word ``collusion'' confirms what 
I have been thinking and spoken, unwritten. But the consumer, 
in my estimation, is just being simply ripped off; and that is 
the reason why these hearings are so important, so we can bring 
out into the public what is going on in our economy.
    I think the biggest offenders are the oil companies that 
take advantage of people at a time of desperate need and up 
those prices. And they say it is the refineries, it is going to 
be hard on business and all, and we can never put our finger on 
the facts. So I do appreciate, you know, measuring your words 
but honesty at this panel.
    I have another question, and I will aim this toward Mr. 
Suiter. In your written statement, you state that some States 
prohibit temperature compensation at the retail level, some 
States do this at all levels, and still other States regulate 
temperature compensation by the particular fuel. So can you 
provide for this committee a compilation of each State's 
regulations concerning temperature compensation for all 
relevant fuels? Not now, but can you give it to us in writing? 
You know, we need to come out of these hearings with some 
factual information that we can take public. So if you can do 
that for us we would appreciate it. And you might want to 
comment.
    Mr. Suiter. I believe that a search of State weights and 
measures laws would probably yield that information, and that 
is something that could be probably done.
    Ms. Watson. Could you provide that for us?
    Mr. Suiter. I can certainly try.
    [The information referred to follows:]

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    Ms. Watson. Yeah. It is our responsibility here to look at 
these issues and try to clarify them and try to discuss them 
and come forward with policy. So those of you who are willing 
to come--as the Chair said, we couldn't get representatives of 
the oil companies to show their faces here, so we ask you if 
you can assist us in providing an honest report for us. And of 
course our staff can do some of this research as well, Mr. 
Chairman. But I think we all ought to come out with a report 
that can go public and probably get into some policy.
    Thank you so much, and I yield back my time.
    Mr. Kucinich. I would agree with the gentlelady. I just 
want the members of the committee to know that, based on the 
questions that have arisen from this discussion, we will once 
again invite people from the oil industry to come before this 
committee and to answer questions relative to the practice of 
having temperature control devices measuring the amount of 
gasoline that people are paying for in Canada and--as opposed 
to not having those devices in the United States--and to 
determine what the role of the industry has been in frustrating 
the honest measurement of the amount of energy that people are 
paying for in their tank. We really need to--I mean, I would 
just want to respond to the gentlelady's request to say that I 
think the committee needs to look deeper into this, because the 
gentlelady raises some very serious questions.
    Mr. Cummings.
    Ms. Watson. Just a moment. Would you yield for just a 
second? I want to followup with that.
    Mr. Kucinich. Yes, of course.
    Ms. Watson. At this same time, could we just bifurcate it 
and have a discussion of the refineries, too?
    Mr. Kucinich. I think that's appropriate.
    Ms. Watson. Thank you.
    Mr. Cummings. I want to thank the gentleman for yielding.
    Mr. Chairman, I just want to say something very briefly 
while the panel is up here. You know, as I was sitting here I 
was thinking to myself, you know, sometimes these kinds of 
things, these kinds of hearings are held and people find it so 
incredible that they find it unbelievable. People have a 
tendency to say, well, wait a minute now. If that is happening, 
there must be something that I am missing, because it seems as 
if they would have addressed this by now.
    That is why I was so pointed, Mr. Cleary, with you. I 
wasn't trying to be smart, but I am very serious. I think the 
American people, they start looking at things, and they become 
very cynical. And I am so afraid, I don't want this to go down 
the cynical path and then--and people just say, ``Well, you 
know, it is just so incredible it is unbelievable.''
    What I would point out, Mr. Chairman, is all they need to 
do is look at the profits of these oil companies and look at 
the fact that this same methodology is being used in Canada and 
look at the fact that you can buy some gas in a cold month and 
buy the same amount of gas in a hot month and you will get less 
for--am I right, Mr. Seibert? You will get less energy for the 
same--when the thing says five gallons, less energy than if you 
bought it in a cold month.
    Am I right? Is that it? I am just trying to break it down 
so that people understand this is--you know, this is very, very 
serious.
    My constituents are complaining every day. I go to the gas 
pump, and I stand there, and I talk to them, and they are 
saying, Cummings, we like you, you are a good guy, but, you 
know, I mean, you got to do something about this. So it just 
seems as if this is one of the many things that we need to be 
looking at and looking at very seriously.
    With that, I yield back.
    Mr. Kucinich. The gentleman raises a point, and that is why 
in the world would they have these devices in Canada that 
adjust for the temperature so that the consumers in Canada 
aren't being cheated and yet in the United States, based on 
this committee report, in one period alone, the summer of 2007, 
consumers in the United States will pay $1.5 billion for 
gasoline they are not getting?
    Now the committee has not extrapolated that over the period 
that the industry has been taking advantage of this hot fuel, 
but this--we are talking about a tremendous amount of money. 
And when you take that down to the level of the individual 
consumer, it really does matter. It really does matter if 
people are paying a dollar more per tank or $3 more per tank 
for energy they are just not getting. I mean, this is what it 
comes down to. This matters to family budgets.
    So the interests of this panel is serious enough that I am 
just going to recommend we will go to a 3-minute round here for 
one more round for the first panel, and I would like to ask Mr. 
Gafinowitz just a couple more questions.
    In a letter that you wrote to Senator Boxer on March 14, 
2007, you stated, ``There is concern among our customers and 
their trade groups that the use of automatic temperature 
control on an optional basis will lead to confusion in retail 
pricing in the marketing of gasoline and would increase the 
cost of operations, while net benefits to the consumers are 
more dubious.''
    To your knowledge, on what basis does Canada use the 
automatic temperature control devices? Is it voluntary or 
mandatory?
    Mr. Gafinowitz. I believe it is voluntary.
    Mr. Kucinich. And has the fact of voluntary use of the 
automatic temperature control devices caused confusion in 
retail pricing and marketing of gasoline? Are you aware of any 
industry concern which has demonstrated such confusion?
    Mr. Gafinowitz. I am not sure exactly how it has worked, 
but I think it is working quite effectively in Canada.
    Mr. Kucinich. And so isn't that argument that is being used 
to try to defeat it kind of a red herring?
    Mr. Gafinowitz. I think that argument has been published 
fairly widely, and I am clearly not the best placed person to 
comment on that argument.
    Mr. Kucinich. I understand.
    Mr. Gafinowitz. But there are a number of arguments on 
this, including whether the cost will really deliver benefit to 
the consumers.
    Mr. Kucinich. As to the question whether the net benefits 
to the consumer are more dubious, are you aware of a survey of 
actual gasoline temperatures taken in every State except North 
Dakota and South Dakota?
    Mr. Gafinowitz. Yes, I am aware.
    Mr. Kucinich. And this would have been data collected as 
part of the EPA's enforcement of leaking underground storage 
tanks?
    Mr. Gafinowitz. Yes.
    Mr. Kucinich. And why are you aware of that? How do you 
know that?
    Mr. Gafinowitz. Well, the data was actually collected from 
one of the companies in our group as part of some research 
project we were doing.
    Mr. Kucinich. And what were the circumstances for the 
collection of those gasoline temperatures? Does Veeder-Root 
still collect gasoline temperatures?
    Mr. Gafinowitz. I am not sure whether we collect them on a 
systematic basis. I can confirm them at a later stage. We were 
collecting them at that point on a systematic basis as part of 
a product development we were doing for underground storage 
tank monitoring devices.
    Mr. Kucinich. Would you be able to provide any of that 
information to the subcommittee?
    Mr. Gafinowitz. Yes, we would.
    Mr. Kucinich. We would appreciate that.
    [The information referred to follows:]

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    Mr. Kucinich. Now my staff has averaged the temperatures in 
2003 on a sales-volume-weighted basis. The average temperature 
of gasoline in the United States in 2003 was 66.6 degrees 
Fahrenheit. What would your automatic temperature control 
equipment do if it read a temperature of 66.6 degrees? Would 
the consumer get more gasoline by weight or less for the money?
    Mr. Gafinowitz. The gasoline devices, presuming that the 
compensating factor was set to 60 degrees, they would 
compensate that for 60 degrees, and you would get an increase 
in energy level once you would compensate.
    Mr. Kucinich. So you would get a little bit more for the 
money?
    Mr. Gafinowitz. Correct.
    Mr. Kucinich. That would be a net benefit for the consumer. 
Is that correct?
    Mr. Gafinowitz. I believe that would be.
    Mr. Kucinich. I want to thank Mr. Gafinowitz for his 
participation, as well as all the panelists.
    Mr. Davis, do you have any other questions?
    Mr. Davis of Illinois. I will just ask Mr. Suiter one 
question. Who primarily uses the information that NIST 
generates? I am trying to see if there is any way to make more 
effective use of the work that you and your colleagues do. It 
is primarily for whom?
    Mr. Suiter. Primarily what?
    Mr. Davis of Illinois. The information that you generate is 
primarily for the use of whom? Who uses it? What does it cause 
to happen as a result of the information?
    Mr. Suiter. OK. In this instance, the information that I 
think you are referring to was generated and presented as an 
educational tool for weights and measures officials, primarily 
to allow them to make an informed decision on the issues before 
the National Conference of Weights and Measures based on sound 
technical data.
    Mr. Davis of Illinois. And, Mr. Seibert, it seems to me 
that I heard you saying that one of the best ways for the free 
enterprise system to really work is when the consumer has the 
same information and understanding as the supplier so that 
decisions are being made on the basis of best interests from 
both vantage points. Would you say that is kind of accurate?
    Mr. Seibert. Extremely accurate, yes.
    Mr. Davis of Illinois. And so education, public education 
probably is also going to be greatly needed in order to make 
sure that the balance is there that seemingly we are looking 
for.
    Mr. Seibert. Certainly. And, in Canada, the oil producers 
and retailers were instrumental in helping Measurement Canada 
in their campaign, in their public information campaign to get 
that public acceptance and understanding of the system.
    Mr. Davis of Illinois. Thank you very much; and thank you, 
Mr. Chairman.
    Mr. Kucinich. Thank you.
    Mr. Cummings.
    Mr. Cummings. Yeah. Mr. Cleary, I want to come back to you. 
I just literally got your statement hot off the press, and I 
haven't even had a chance to read it, but this did catch my 
eye. It said, ``On January 16 and 17, 1905, the National Bureau 
of Standards, today known as the National Institute of 
Standards and Technology, invited the States to participate in 
the development of uniform weights and measures for the United 
States. The relationship grew into what is known as the 
National Conference on Weights and Measures. The United States 
is one of the only countries in the world without a Federal 
weights and measures regulatory agency. In the United States, 
each jurisdiction funds its weights and measures program based 
upon budgetary priorities in that particular State.'' And then 
it goes on and on. But it is a nice piece for me to start to--
just a few questions I want to ask you.
    When I go to the gas pump, they have these little stickers 
on there saying that this has been checked by the weights and 
measures or something like that. And I take it that what that 
means is if I get a gallon of gas at the Exxon station, for 
example, at Vine and Main Street, if I go up the street to 
Kossuth and Main, the gallon is the same gallon. Is that right?
    Mr. Cleary. That is correct, sir.
    Mr. Cummings. And what do you all have to do with that, if 
anything?
    Mr. Cleary. Generally, each State has regulatory officials, 
either at the local level or the State level, that goes out 
routinely, perhaps once a year, and tests that pump to set 
specifications to make sure that the pump is delivering 
accurately.
    Mr. Cummings. And so what do you all--your organization 
does what with regard to that?
    Mr. Cleary. Our organization, with regards to that, works 
with the States to develop model laws and specifications and 
tolerances that they accept as their State laws for testing 
those devices.
    Mr. Cummings. So that means if I was in Minnesota a gallon 
of gas--and I am not even dealing with the issues we are 
dealing with here. One of the major concerns, if I am in 
Minnesota--a gallon of gas is a gallon of gas in Florida. Not 
even dealing these issues. But, I mean, as far as the liquid is 
concerned. Am I right?
    Mr. Cleary. Yes. That is why we exist, is to try to make 
sure, through this voluntary effort, that States develop 
uniform specifications so that doesn't occur, so that you don't 
drive from Minnesota to another State and have a different 
standard for a gallon of gasoline.
    Mr. Cummings. OK. I asked you a little bit earlier about a 
vote possibly being delayed, and you said there has been 
discussion of it. Who votes in your organization?
    Mr. Cleary. The regulatory community votes, sir.
    Mr. Cummings. And is that--so that, based upon what you 
just answered a moment ago, that would be State folk; is that 
right?
    Mr. Cleary. State directors and local government officials, 
yes, sir.
    Mr. Cummings. So does industry play a role in this at all?
    Mr. Cleary. They play a role with regard to testifying, 
being part of the consensus process, being able to sway opinion 
one way or the other, but they don't have a voting role at the 
conference.
    Mr. Cummings. Mr. Chairman, I just need 2 more minutes, 
because he just said something that I just have to get in. I 
couldn't sleep tonight if I didn't.
    Mr. Kucinich. The gentleman may proceed.
    Mr. Cummings. Thank you.
    You said they have a lobbying role. What did you say?
    Mr. Cleary. They are participants in the conference. They 
are members, and they are allowed to state their opinions for 
the record.
    Mr. Cummings. And you said sway.
    Mr. Cleary. Sometimes their arguments are persuasive, based 
on technical data that the regulatory officials don't have.
    Mr. Cummings. But they have no vote?
    Mr. Cleary. No, sir.
    Mr. Cummings. Do they sponsor travel or resort trips or 
anything like that?
    Mr. Cleary. They don't sponsor travel, no, sir. They 
occasionally will donate to a banquet or something at a 
conference. Their association will occasionally help out with 
an event that we are trying to do for the membership.
    Mr. Cummings. Would you be kind enough to get us the 
information over the last, say, 3 years as to what they have 
donated to the industry? You know what the industry is, right? 
I mean, you used the word.
    Mr. Cleary. Yeah, they have a group within the organization 
itself. I can get you any information that we have relative to 
that.
    Mr. Cummings. Staff will get you some written questions, 
because we want the American public to know, you know, what 
their State--how their State folk are being swayed. And, you 
know, they need to know that.
    And do they provide meals and gratuities, too?
    Mr. Cleary. No, sir, they don't provide meals to us, no.
    Mr. Cummings. So they just send you to a resort and say see 
you later?
    Mr. Cleary. No, the conference dues pay for all meetings. 
If you are traveling on business for the conference, the 
conference itself is incorporated and pays for those things. 
They are not sponsored or paid for by industry folks.
    Mr. Cummings. Well, why don't you tell me what does 
industry pay for?
    Mr. Cleary. Occasionally, the industry group within the 
organization will help sponsor, say, for instance, an after-
hours event that takes place at the annual meeting. For 
instance, this year in Utah we are having a conference. There 
will be a reception with some food and some drinks provided for 
the membership that will be helped by the association. But the 
conference itself pays for the great majority of that.
    Mr. Cummings. Wouldn't it make sense, though, when we are 
talking about something like this where the industry--I mean, 
based upon these votes or the delay of a vote can make, in the 
words of all of us, billions upon billions of dollars, that so 
that your State folk who are the voting members, who come from 
Maryland and Ohio and places like that, so they can feel that 
they have not been swayed at all--I mean, based upon any kind 
of--you follow what I am saying?
    Mr. Cleary. I understand completely what you are saying, 
but ethically we would never tolerate any particular industry 
doing that. I mean, that would not be tolerated. I mean, our 
people are ethical people who don't make decisions on the basis 
of the type of food that you would get at a reception that 
occurs in one of our conferences, sir; and I would invite you 
to try some of that food to determine whether or not you would 
be swayed one way or the other.
    Mr. Cummings. Are you trying to tell us the food isn't 
good?
    All right, just one last thing.
    Mr. Cleary. Yes, sir.
    Mr. Cummings. Has industry ever refused to comment on 
temperature compensation when asked to by the National 
Conference? I mean, have you all had formal discussions with 
industry on this? Formal?
    Mr. Cleary. Yes, we have had formal discussions with 
industry at our open hearings. Our open hearings are the basis 
where we provide anyone who has comment about a particular 
issue to come forward and debate it and discuss it. And, yes, 
they have.
    Mr. Cummings. So they have made it clear that they are for 
or against?
    Mr. Cleary. Certain groups within the organization, for 
instance, API, have made a statement that they are against 
temperature compensation. They have testified to that fact at 
our open hearings, yes.
    Mr. Cummings. Do they have any oil companies for it?
    Mr. Cleary. We haven't had any one as yet come forward from 
the oil community to testify for it, no.
    Mr. Cummings. Thank you, Mr. Chairman.
    Mr. Kucinich. I thank the gentleman; and I think it would 
be of use for this subcommittee to have Mr. Cleary provide us 
with information that you just spoke about, perhaps minutes of 
meetings, any letters or e-mails or logs of phone calls 
relating to the oil industry objection to the automatic 
temperature control technology. If you could provide the 
committee with that information, and our staff will send you a 
followup request.
    Mr. Cleary. Yes, sir.
    Mr. Kucinich. Thank you, sir.
    I want to thank the panel for its participation and for 
this discussion. The first panel is dismissed, and we are very 
grateful for what you have done to help enlighten us about this 
matter relating to consumers paying a billion and a half 
dollars for gasoline they are not getting.
    We are going to go to the second panel, and we are 
fortunate to have an outstanding witness on this second panel. 
I say ``witness'' because we had intended to have the 
executives of ExxonMobil and Shell here, and they are obviously 
not appearing.
    Let the record show that Mr. Rex Tillerson, CEO of 
ExxonMobil, was invited and declined to attend; that Mr. John 
Hofmeister, president of Shell, was invited and declined to 
attend; and let the record reflect that this subcommittee will 
be persistent in its efforts to continue to extend invitations 
to ExxonMobil, Shell, and the executives of other oil companies 
so they will have an opportunity to be able to put their 
position on the record.
    Mr. Columbus, I want to apologize. You are the lone witness 
on the panel. As I stated in my opening statement, it was our 
intention that you would be accompanied by ExxonMobil and 
Shell. But, judging from your resume, I have no doubt you will 
be able to hold your own nevertheless. I want to thank you for 
coming.
    It is the policy of the Committee on Oversight and 
Government Reform to swear in witnesses before they testify. I 
would ask you, Mr. Columbus, if you would rise, raise your 
right hand.
    [Witness sworn.]
    Mr. Kucinich. Thank you. Let the record reflect that Mr. 
Columbus has answered in the affirmative.
    Mr. Columbus, as with panel one, I ask that you give an 
oral summary of your testimony and keep the summary under 5 
minutes in duration. Bear in mind that your complete written 
statement will be included in the hearing record.
    Mr. Columbus, the floor is yours.

  STATEMENT OF R. TIMOTHY COLUMBUS, GENERAL COUNSEL, NATIONAL 
    ASSOCIATION OF CONVENIENCE STORES, AND GENERAL COUNSEL, 
           INDEPENDENT GASOLINE MARKETERS OF AMERICA

    Mr. Columbus. Mr. Chairman, thank you. Members of the 
committee, thank you for showing up today. And Congressman 
Cummings, I am the guy that you are waiting for; and I tell you 
I look forward to your questions much the way a piata looks 
forward to being the center of the party.
    But I, in fact, am Timothy Columbus. I am a member of the 
law firm of Steptoe & Johnson, and I appear today in my 
capacity as the General Counsel of the National Association of 
Convenience Stores and the Society of Independent Gasoline 
Marketers of America. The collective membership of these two 
trade associations sells approximately--I don't know--somewhere 
between 60 and 85 percent of the gasoline and diesel fuel sold 
at retail in the United States.
    There have been a number of things upon which parts of your 
inquiry have been premised that I think I would like to set 
straight.
    The first one is that automatic temperature correction is 
an issue really centered around the motivation and interests of 
big oil. And by big oil I assume we are talking, Mr. Chairman, 
about the integrated oil companies to whose profits you 
previously made reference.
    The reality is this isn't about big oil. This is about 
little oil. Big oil owns and/or operates under 10 percent of 
the retail outlets in the United States. The retail segment is 
overpoweringly dominated by independent businessmen and women, 
most of whom are small businesses. For example, NACS estimates 
that approximately one-half of the convenience stores in the 
United States are operated by single-store operators. So, from 
our view, the claims that big oil is doing something nefarious 
here are misdirected. If you have a problem, it is with us, not 
the integrated oil companies today; and I think after a little 
discussion I hope you will feel that you don't have a problem 
with us.
    I sincerely appreciate the focus of the committee's 
questions today, because what you have aimed at is consumer 
welfare, and I think that is where we should start. As in all 
inquiries relating to marketing practices, consumer welfare 
really is supposed to be the primary value that we are seeking 
some certainty on. And, historically, the role of government in 
this kind of inquiry has been to identify deceptive and/or 
fraudulent practices, to act to enhance market transparency so, 
as Mr. Davis pointed out, well-informed consumers can make 
well-informed and self-interested decisions, and to minimize 
consumers' costs by assuring that consumers benefit from 
efficient and competitive markets.
    I believe the review of the facts relating to each of these 
policy objectives indicates that government action mandating a 
change in retailers' marketing practices in selling non-
temperature corrected, ``gross gallons,'' would produce no, no 
increase in consumer welfare, is more likely to harm consumer 
welfare than help it, because I think what you are going to do 
in net, net is raise consumer prices. Retailers selling gross 
gallons of motor fuels does not constitute a deceptive 
practice.
    Let's talk about what a deceptive practice is. It is a 
broken promise. A deceptive practice I think is when someone 
looks up and says I am going to sell you this and delivers 
something other than the promised good.
    The transaction at a retail motor fuel outlet is simple. 
The consumer comes in and purchases a standard gallon, defined 
as 231 cubic inches of a hydrocarbon mixture which meets the 
definitional standards of gasoline or diesel fuel as set out by 
ASTM for that standard gallon and pays the price posted on the 
big sign out in front of the outlet. I submit that is exactly 
what happens and that all consumer expectations as to what they 
are going to get have been fulfilled.
    Mr. Chairman, the fact that many--in fact, most retailers 
buy gasoline--and let's just talk about gasoline. We will get 
to diesel fuel if you want to focus on that, too--on a net 
gallons basis as opposed to a gross gallons basis is of 
interest, but it is not dispositive as to different 
transactions. And we can talk about--and I am sure I am going 
to get a chance, based upon your prior questions--about why 
people use net and gross at different levels. The terms upon 
which the retailers bought motor fuel are not relevant to the 
terms of the transaction, which is a retail sale.
    Now some have asserted even today that consumers have an 
expectation of a certain number of British thermal units in a 
gallon of gasoline and that ATC, automatic temperature 
correction, will assure that the same amount of energy is in 
each gallon. Mr. Chairman and members of the committee, I deny 
that is going to happen. And it is not because anybody has 
anything nefarious about it. It is because today there are 
virtually no two gallons of motor gasoline which have the same 
number of Btu's in them. The number of British thermal units in 
a gallon of gasoline is going to be a function of what crude 
oil was processed at a refinery, what machines took the off-put 
of the distillation towers and turned it into whether that is a 
catalytic cracker or reformer or an alkalization unit. There 
are a whole lot of them.
    One of the things that is absolutely going to positively 
affect how many British thermal units there are in a gallon of 
gasoline is whether or not you blended ethanol with it. A 90-10 
blend of ethanol is going to diminish the number of British 
thermal units in a gallon of gasoline.
    So if that is our principal point of inquiry today, Mr. 
Chairman, I urge you to run right over to the Commerce 
Committee, because they are on their way to a 38 billion gallon 
ethanol mandate. And if Btu's is the coinage of choice, we 
should be concerned about that. The fact is that the standard 
definition of gasoline, which is an ASTM definition, doesn't 
even reference Btu's. It is a performance standard.
    Now, in summary, as long as the product meets the 
appropriate definition performance characteristics set out by 
the association--the American Society of Testing and Materials, 
I think it is--and the consumer gets 231 cubic inches of that, 
I believe the retail transaction has not been deceptive and the 
consumer has purchased what he or she intended to.
    Now the question is, would ATC, automatic temperature 
correction, equipment being installed at retail enhance 
consumer welfare? I think the answer to that is no.
    First of all, as I pointed out, we still are not going to 
know, based upon temperature, how many Btu's there are in the 
gallons sold on the east side of the street as opposed to the 
gallons sold on the west side of the street. They may come with 
different--I know I am running long, Mr. Chairman, but give me 
a break here. I am asking for some leniency before I take my 
whipping.
    Due to different API-specific gravities, there is going to 
be an increase in cost. And you can talk whether it is $2,000 
or $3,000 per pump--the average outlet in the country has four 
pumps, all right? So you are talking $8,000 to $12,000 for a 
retrofit.
    Now, last year, the average convenience store in the United 
States made under $34,000 of pretax profit. That is the average 
store. So that means there are a bunch who made less than that. 
So you put that kind of capital requirement onto those stores 
and you are going to see the marginal outlets in the market 
leave.
    The loss of those outlets may or may not have an upward 
price pressure, but two things are true. No. 1, normally 
increased concentration results in higher prices. No. 2, it is 
certainly a loss of consumer choice. And consumer choice has 
historically been viewed as a primary consumer benefit. The 
higher capital costs imposed on the remaining retailers are 
going to be recovered in higher product prices. And permissive 
with respect, Mr. Chairman, and I would be happy to talk to you 
about this today, I believe that the permissive use of ATC in 
this economy would be a nightmare for consumers.
    So, finally and most importantly, I am telling you what I 
am hoping you are going to understand. The allegation from Mr. 
Seibert is that somehow consumers are not getting what they are 
paying for and that really what ought to happen is that when 
somebody buys a gallon they ought to get more product. Well, 
OK. You can define a gallon of gasoline any way you want. You 
can define it as Hawaii has, as 234 cubic inches; you could 
define it as 500 cubic inches. One of the things I am pretty 
sure of is, if a greater measure of value passes out in a 
transaction, the price term is going to change on that. You 
know, if you buy a 4-ounce candy bar as opposed to a 3-ounce 
candy bar, my guess is you are going to pay more for the 4-
ounce candy bar. Mandating or permitting on an unrestricted 
basis ATC at retail motor fuel sales I believe will deliver no 
increase to consumer welfare and very well may risk consumer 
welfare by generating a loss of consumer choice and, in fact, 
increased consumer confusion in the event of permissive and 
higher prices.
    You have been very patient. Thank you, Mr. Chairman.
    Mr. Kucinich. Thank you very much, Mr. Columbus, for your 
testimony.
    [The prepared statement of Mr. Columbus follows:]

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    Mr. Kucinich. Before I ask my questions, I would just like 
to say that you spent a lot of time talking about the 
differences between Btu's here and Btu's there.
    Mr. Columbus. Right.
    Mr. Kucinich. And I would like to suggest that this isn't 
so much about the Btu's as it is about the b-u-t's.
    Mr. Columbus. OK.
    Mr. Kucinich. But Canada has this technology, and the 
United States does not. But Americans are paying more for 
gasoline they are not getting and Canadians are not. But oil 
companies are gaining a windfall of $1.5 billion, according to 
this staff report, just in the summer of 2007, and but there is 
no evidence that the retailers are getting this money from this 
scheme. And but you are saying that customers may have to pay 
more if you have this automatic temperature control, but they 
don't have it and they are paying more? So the oil companies 
apparently have the people coming and going.
    No, that's not acceptable. I don't think that we can let 
the American consumers be hostage.
    I have some questions here that relate to your testimony. 
We have heard from retailers who claim that the profit they 
make on a sale of gasoline is slim to nonexistent.
    Mr. Columbus. That is correct.
    Mr. Kucinich. We have heard that the profits are in the 
food and other concession sales at the convenience mart. Now is 
that generally true for your members?
    Mr. Columbus. I believe that is so.
    Mr. Kucinich. OK. At the same time, they are making slim to 
no profits on the sale of gasoline.
    Mr. Columbus. Correct.
    Mr. Kucinich. ExxonMobil, Shell, and other integrated oil 
companies are making very significant profits. In 2006, 
ExxonMobil made $39.5 billion in profits alone. They are the 
envy of every business, and I bet your members are wondering 
how it is they sell the gasoline and ExxonMobil earns the 
profits. What do you tell them?
    Mr. Columbus. Actually, they don't ask me that question 
because they already know the answer.
    Mr. Kucinich. But what do you tell them?
    Mr. Columbus. What do I tell them? They don't manufacture 
this. They are price takers at the wholesale level, and in a 
special way they are price takers at the retail level. The 
market sets the wholesale price. It is what it is.
    If we had a lot more gasoline supply in this country, Mr. 
Chairman, my bet is those wholesale prices would be lower. As a 
representative of buyers of gasoline at the wholesale level, we 
love long supply situations. We don't have that today. I 
suspect that my people will do what they have continued to do, 
which is they will buy gasoline at the best price that they can 
find it in the market, and they will sell it at the best price 
at which they can sell it in the retail market and, by trying 
to control their costs, maximize the profit that they realize 
out of the difference between those two prices.
    Mr. Kucinich. OK. So what we have established here is that 
these retailers are making slim to no profits. They are not the 
ones keeping the profits in gasoline sales. So it would stand 
to reason that they are not the ones keeping the profits from 
hot fuel sales.
    Mr. Columbus. Well, if I may respond, sir?
    Mr. Kucinich. Of course.
    Mr. Columbus. The theory is that retailers--I mean, when we 
are talking about automatic temperature correction, we are 
talking about it at retail. So the theory must be that the 
retailers are somehow making a lot of money on this.
    Your staff I think in briefing you, Mr. Chairman, if I 
understand the premise of your question, has suggested that 
somehow these guys are getting free gallons. I think if you go 
into--and I am talking about the retailers. If you go into the 
retailers' books, what you will see is that any inventory gain 
on expansion fundamentally goes to reduce costs of goods sold.
    And that is how they will account for it. But the reality 
of it is that the profitability on motor gasoline of the retail 
segment of this country's petroleum industry is very, very 
thin.
    Mr. Kucinich. Let me ask you this. How do you think the 
Exxons and the Shells get the hot fuel premium once they have 
sold the gasoline to retailers in temperature compensated 
gallons?
    Mr. Columbus. I believe they don't, sir, because I believe 
that the, ``hot fuel premium,'' is a characterization of 
something that I think my people disagree exists.
    Mr. Kucinich. OK. Now we are getting existential. Is there 
such a thing as thermal expansion?
    Mr. Columbus. There is. There is also thermal contraction. 
And earlier you asked someone else why do people in Canada do 
this on a permissive basis? Because for years retailers in 
Canada saw, saw, actual inventory shrinkage because they bought 
at 60 degrees and they were selling something less than 60 
degrees. And if they were competing with someone whose sole 
source of profit was not retail sales and therefore did not 
feel a need to recover that shrinkage in the retail market they 
were being penalized. So when the Canadians went to this it was 
in the retailers' economic interest to get rid of that 
inventory shrinkage. That doesn't make them bad people; that 
makes them business people.
    Mr. Kucinich. Do oil companies buy and sell to each other 
at wholesale at the 60-degree standard?
    Mr. Columbus. Yes, sir, they certainly do. And there is a 
good reason for that.
    Mr. Kucinich. And at retail isn't it true that oil 
companies buy at one temperature and sell to consumers at 
another.
    Mr. Columbus. My people are oil companies, and they sell 
retail at gross. So the answer is yes.
    Mr. Kucinich. Thank you. Mr. Davis.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman. 
The more I listen and the deeper we get into this discussion it 
reminds me of a limerick that says never ask of money spent 
where the spender thinks it went. Nobody was ever meant to 
remember or invent what they did with every cent.
    As I guess for the consumer trying to figure out who got my 
money, I mean you spend $50 to fill up the tank and you are 
trying to figure out, well, if the convenience store operator 
didn't get it because they are barely making it, I mean their 
profit margins are not that great, if the guy who brought it to 
the station isn't getting it, he is just a regular working 
person who is hauling or transporting gasoline, the person 
working at the foundry----
    Mr. Columbus. Didn't get it.
    Mr. Davis of Illinois [continuing]. Didn't get it, where is 
it. Well, the oil companies when we look at their profit 
margins must have gotten something that produce these 
tremendous profits. Now, we know that the cost of living, the 
cost of things are constantly rising. But have other things 
risen as much as the price of gasoline seems to be rising?
    Mr. Columbus. The short answer, what I can focus on for 
you, and I hope I help you with, is how it works at retail, 
because ATC is really focused at retail. And if it turns out 
that the good dog is hunting the wrong beast then my mission 
has been accomplished here today. Something that has gone up a 
lot faster than retail and gasoline prices is credit card fees. 
At $3 a gallon that retailer is sending any place from 6\1/2\ 
to 9 cents a gallon to credit card companies. Because at $3 a 
gallon people want to use that card, they don't want to use 
cash any more, Mr. Davis.
    When I started working for this industry I had hair, I had 
a jaw line, I had a waist. That is 30 some years ago. At that 
time the domestic industry's manufacturing capacity overhung 
demand by about 2 to 5 percent. Today we are a net importer of 
gasoline. And if you are looking for what happened to gasoline 
prices, I urge you to start there because it is the old saw, it 
is supply and demand. When product is tight, prices go up 
whether or not the cost to manufacture it does. The market 
prices this product. And if we were to look at all these 
retailers and say, OK, now we are going to automatically 
temperature correct every gallon that you sell, OK, if rather 
than 231 cubic inches that customer gets 234 cubic inches, I 
believe, maybe I am a pessimist, but I believe the price for 
that 234 cubic inches is going to be different and higher than 
it was for the 231. That is exactly what has happened at the 
wholesale level.
    As to the chairman's inquiry about why are we using net 
gallons, temperature corrected gallons at wholesale as opposed 
to retail, most of it is the nature of the transactions for 
which this was aimed. And that is bulk transactions. We are 
talking pipeline tenders, cargos, barges, moving between 
terminals. And not just within the same market area, Mr. 
Chairman. These guys balance their supply imbalances normally 
by trading. You may tradeoff with somebody. You can put a 
pipeline tender in the Colonial Pipeline system, which is the 
major source of gasoline for this city, in Pasadena, TX and it 
comes by us, goes up to Linden, NJ. That is 2\1/2\ weeks. In 
that time it will all change. So when these guys were settling 
their books at the end they wanted a constant temperature up, 
down, north, south, east, west. I think that is why it 
happened.
    In contrast, retail motor fuels in this city all come from 
one of three terminals. They either come from Baltimore, they 
come from Fairfax or they come from Newington down south on 95. 
They go into trucks through the same ambient air temperature 
with the possible exception of differences in water tables. 
They have the same ambient water temperature. We don't see 
those kinds of differentials that require that. So the guy 
across the street probably has gasoline that came from the same 
terminal via the same route and went into a tank with the same 
temperature. So it really is apples to apples.
    Mr. Davis of Illinois. Let me just finally make sure that I 
just heard you suggest that it would be a nightmare if we went 
to utilization of this system.
    Mr. Columbus. On a permissive basis, that is right. Let's 
assume that you and I are across the street from each other, 
you are a retailer, I am a retailer. I decide to put ATC in, 
you don't. Now, I am going to have my gallon priced on a 
temperature corrected basis and you aren't going to have that 
done. What is that going to mean to the consumer? This isn't 
going to the Safeway and saying here's the 10-ounce can of peas 
and here is the 8-ounce can of peas and I have unit pricing to 
tell me which is the better deal. Most people buy gasoline on a 
decision that takes place while they are doing 25 to 50 miles 
an hour. And how are you going to compute? Am I going to know 
that temperature corrected gallon because I have 234 cubic 
inches as opposed to 231 on a per cubic inch basis is going to 
be better?
    Mr. Davis of Illinois. Or would the consumer go where they 
thought they were getting the best price?
    Mr. Columbus. The consumer is going to go where he or she 
thinks. Today everybody is buying 231 cubic inches of the same 
product across the street from each other. They are getting 
that. This has been the most price transparent and, from my 
perspective, consumer friendly in the sense that there is very 
little consumer confusion about what you buy in the commodities 
market in the United States. I think it has served the consumer 
well, sir.
    Mr. Davis of Illinois. Thank you very much and thank you, 
Mr. Chairman.
    Mr. Kucinich. Thank you, Mr. Davis. The Chair recognizes 
Mr. Cummings.
    Mr. Cummings. I tried to hang with you, I tried. And it has 
gotten--I mean, I am just confused, but I am going to 
straighten myself out with your help.
    Mr. Columbus. I am going to do the best I can for you, sir.
    Mr. Cummings. You made the argument that retrofitting 
existing pumps and buying new pumps with temperature 
compensation technology would be a burden, is that right?
    Mr. Columbus. Yeah. It is a cost and it is not a productive 
source in the sense if you put a new computer in your business 
you may be able to cut down costs. This is just a cost. I am 
not going to sell one more drop than I did before I put it in. 
So yes, sir.
    Mr. Cummings. So I take it that you consider it a benefit 
when we put in card readers enabling customers to use their 
credit cards? That is the difference you are making?
    Mr. Columbus. The short answer is yes, we put them in 
because that is what the consumer wanted. Paying the current 
credit card fees that we are paying, Congressman, we do not 
view as a benefit.
    Mr. Cummings. Well, you are helping me because I tried to 
give you a softball to hit a home run and you just said 
something that you are putting them in there----
    Mr. Columbus. Right.
    Mr. Cummings [continuing]. But you are saying that doesn't 
help you.
    Mr. Columbus. It helped take unnecessary traffic out of our 
stores which was slowing down the time of a transaction at the 
counter. The fact that we are dealing with people who have 
very, very substantial market power, perhaps monopoly market 
power in terms of charging us what the consumer--you know, we 
are paying a multiple in the United States on credit card fees 
of what they pay in Australia or Canada or Europe, sir.
    Mr. Cummings. I got you. Do gas pumps last forever?
    Mr. Columbus. I'm sorry, sir?
    Mr. Cummings. Do gas pumps last forever?
    Mr. Columbus. No, they don't. My understanding is unless 
there is some huge technological breakthrough that renders 
everything obsolete, these things are normally good any place 
from 8 to 12 years. The gentleman from Gilbarco probably knows 
a lot more about that than I do.
    Mr. Cummings. Isn't it a normal business operation to phase 
old pumps and install new ones?
    Mr. Columbus. Well, it is. But what you may have noticed 
around town in the retail market is that there are a lot of 
retail outlets that companies have turned over to other people 
because they can operate them less cheaply. They don't have to 
have labor 24/7 because you have a little entrepreneur who is 
sitting there. That person will hang onto those pumps as long 
as he or she can, Congressman, because to replace that pump is 
a solid five figure investment. I bet, what is it, 10, maybe 20 
percent of, for example, the pumps in the country are still 
mechanical.
    Mr. Cummings. Some of them will be replaced, that is my 
point.
    Mr. Columbus. Yes, sir, they will be.
    Mr. Cummings. So how come temperature compensation is being 
singled out as a burden? And let me just tell you where I am 
going. Let me give you a shortcut. You know, I am sitting here 
and I have to tell you when I go home I don't know whether this 
is on C-SPAN or not. But I can tell you today when I go to the 
Safeway buying my fruits and vegetables somebody is going to 
say I saw you on television and they really must think you are 
not bright. I am telling you, that is what they are going to 
say. They are going to say because we heard all those 
arguments, but the gas price is still going up. And do you know 
what, they are going to talk about Davis, they are going to 
talk about him. And they will say Davis said the right thing, 
somebody is making some money. And the question is, they are 
going to say, hey, Cummings, where is the money going? And then 
they are going to say, you had that guy Columbus, was that his 
name, that is what they are going to say, he tried to tell you. 
I can hear them now. You are going to be big time popular in 
the city of Baltimore. Then they will say that he sat there and 
tried to tell you that these gas stations aren't making money. 
And then I remember you reading from his testimony on page 2 
where he said that government should take no action related to 
this matter we are discussing today.
    Mr. Columbus. Automatic temperature correction, sir.
    Mr. Cummings. So my folks are going to say you know why are 
you there, Cummings?
    Mr. Columbus. If you want, and this is free counsel, so 
take it for what you are paying for it.
    Mr. Cummings. I need your help.
    Mr. Columbus. I will suggest that you should answer that 
one of the reasons that the chairman and you all came to this 
hearing today was to try to find out if this was the beast that 
could really help you provide some relief to your folks on that 
issue. And I love the limerick because I am telling you my 
folks would love more of this money. I mean they would love a 
lot more of this money. And they are not getting it. And if I 
look up at you and I think I can document to all your 
satisfaction that we are not the people taking this money, the 
question is well, then if temperature correction is a retail 
issue and they are not getting the money now, what the dickens 
am I doing jumping on this? And the answer is I think that you 
have been offered a very attractive proposition that somehow 
the consumer is getting short-changed something here. And the 
terrible thing about my task, Congressman, is this is a 30-
second complaint and like a 40-minute answer, and that doesn't 
play as well on C-SPAN as I would like it to.
    Mr. Cummings. Mr. Chairman, I just have one more thing. The 
fact is that--if I could boil your argument down, it is that 
the retailers are not getting anything out of this.
    Mr. Columbus. Correct.
    Mr. Cummings. Second, that the reason why you are sitting 
there and you are against this--there are two reasons, one, you 
don't think the information is necessarily accurate, although 
you did answer the chairman's question saying there is a 
difference, I don't know which you think, and two, that it 
would be a burden for your folks, is that right, the retailers?
    Mr. Columbus. Yes. And I will add one other thing. I don't 
think the consumer is going to know more after this than 
before, and therefore there is no increase in consumer benefit.
    Mr. Cummings. And that leads me to my final point. Is it 
possible that if we had the machinery--let me tell you 
something. I have people in my district that make $300, $400 a 
week, a family of three and four, I have a lot of single 
mothers that drive long distances to get to work.
    Mr. Columbus. That is brutal.
    Mr. Cummings. And there is a flip side to your argument. 
And that is that we have a radio station in Baltimore, and I am 
sure that they are popular everywhere, where they tell you 
where the lowest gas is. And everybody tunes into where is the 
lowest gas. And when you go to that gas station people are 
lined up, lined up trying to get some gas because it may be 3 
cents cheaper than anywhere else. And I guess what I am saying 
to you is I think you underestimate the consumer. I think you 
underestimate maybe, just maybe if they had this machinery and 
people knew that they were going to get more miles, do you 
follow what I am saying, for that gallon or whatever, maybe 
just maybe when they are on a limited income they would say, 
just like when they listen to the radio station and they line 
up, they would say, well, maybe I need to go somewhere where I 
can get an extra 3 or 4 miles because I don't have this kind of 
money, I can't go on vacation, I can't take my kids on 
vacation, I can't even go shopping, they may be saying, because 
I have to reduce the number of trips that I make because I have 
a limited income. And so they take the moments to try to 
educate themselves so that they can say, ``a penny saved is a 
penny earned.''
    I know people don't believe people live like this. Let me 
tell you they do. And lot of Americans do. People sitting in 
this room may not, but a lot of Americans are pinching pennies 
and a lot of those pennies are falling into those billions upon 
billions of dollars that these companies are making.
    I am sorry, Mr. Chairman. It just aggravates me when it 
seems as if folks don't understand that people are in pain and 
they are suffering.
    Mr. Columbus. Congressman, let me respond. No. 1, I agree 
with you completely, I think people really are pushed today. I 
think a lot of people are pushed. No. 2, I think anybody who 
underestimates the wisdom and intellect of the consuming public 
is crazy and destined to bankruptcy. Now, No. 3, there is a 
fact assumed in all this that is not in evidence, and that is 
if we had this equipment someone would get 3 cubic inches more 
of gasoline at the same price that they got 231 before. And 
that is the premise that I challenge, sir. It is not that they 
wouldn't be motivated economically and smart enough to go find 
the best value for themselves. They do. They do the best job 
they can. I just don't think they are going to get the value 
bump that the proposition postulates.
    Mr. Kucinich. Mr. Cummings, you raise an excellent point 
here, which further justifies the purpose of this hearing. When 
any of us are looking for a place to buy gas we are looking at 
the signs and we are looking at what they are paying for 
regular or premium, depending on the kind of gas we buy, and we 
will study the corners or we might drive down the road and 
decide we are going to get a better deal here.
    Mr. Columbus. Yes, sir.
    Mr. Kucinich. When consumers learn that because of this 
thermal expansion they end up paying for gasoline they are not 
getting, that choice that they make becomes somewhat 
questionable because they see whether they go one place or 
another place, they are still paying anywhere from $1 to $3 a 
tank for gasoline they are not getting.
    Now, here is what we found out from this hearing today that 
is very interesting. We heard from an industry association that 
hasn't wanted the automatic temperature control devices, we 
have heard from retailers who do not want the automatic 
temperature control devices, we know the oil companies don't 
want the automatic temperature control devices and yet the oil 
companies are making as much as a billion and a half dollars 
off of consumers for this summer alone for gasoline that they 
are not delivering. This committee, this Domestic Policy 
Subcommittee is going to continue to explore this vital 
consumer issue, and we will once again invite the oil companies 
in to testify.
    I want to thank all the members of the committee for their 
participation. Mr. Columbus, thank you and all the witnesses. 
Today's hearing of the Domestic Policy Subcommittee, the title 
has been ``Hot Fuel: Big Oil's Double Standard for Measuring 
Gasoline.'' I am Congressman Dennis Kucinich of Cleveland, OH, 
chairman of the subcommittee. Thank you for all attending. This 
committee stands adjourned.
    [Whereupon, at 11:15 a.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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