From the beginning of the modern petroleum industry in the early 1900s, both industry and the federal government have recognized the problem that temperature-induced changes in volume present for inventory control. Specifically, the fact that petroleum products, like most other substances, expand when heated and contract when cooled means that the amount of fuel in the inventories of retailers changes, literally, with the weather. Following a study of the issue conducted by the American Petroleum Institute from 1912 to 1917, the United States and Great Britain established the standard measure for petroleum products: at an ambient temperature of 60 degrees F, 231 cubic inches equals a gallon. The effect of temperature on fuel volume varies depending on the density of the fuel. For example, gasoline’s volume changes approximately 1 percent for every 15 degree temperature change, whereas diesel, which is a more dense fuel, changes approximately 1 percent in volume for every 22 degree temperature change. In practice, the density of gasoline and diesel sold to consumers varies depending on such things as the crude oil used to produce the fuel and the addition of other components to achieve certain ends. For example, federal efforts to reduce petroleum consumption and greenhouse gas emissions require the increased use of some components in fuel blends, such as ethanol, biodiesel, and other alternative fuels. In addition, ethanol is added to gasoline in certain geographic areas to help reduce the emissions that contribute to the formation of ground-level ozone, which has been linked to respiratory and other health problems. As a result, the composition and density of gasoline and diesel products vary considerably across the country. In 2004, at least 45 different kinds of gasoline were produced in the United States. Certain properties of fuels other than volume, such as mass and energy content, do not change in response to changes in temperature. However, energy content can be affected by changes in the density of fuel that arise from the addition of alternative fuels or other blending components that have densities different from the gasoline itself. In the United States, the petroleum industry often adjusts for temperature- related changes in wholesale transactions for gasoline and diesel and in retail sales for other petroleum products, such as home heating oil, liquefied petroleum gas, and prepackaged liquids such as motor oil. In contrast, virtually all gasoline and diesel sold at the retail level is sold at 231 cubic inches per gallon regardless of the temperature of the fuel. Temperature compensation can be achieved through several methods. First, volumetric changes can be calculated manually when the fuel density and temperature are known. Second, technological advances have led to the development of devices that automatically measure both the volume and temperature of the fuel at the time of purchase and correct the volume to the amount that would exist if the fuel were at 60 degrees F. Finally, in areas where the ambient temperature remains relatively constant throughout the year, pumps can be recalibrated to dispense the volume a gallon would occupy at 60 degrees F. For example, if the temperature in an area is relatively constant at 75 degrees F, pumps can be recalibrated to dispense 233 cubic inches per gallon. Gasoline and diesel are distributed nationwide to fuel wholesalers through a supply infrastructure composed of pipelines, barges, tanker vessels, marine terminals, railroads, trucks, and storage tanks. At various points along the distribution chain, fuel is stored at terminal stations that generally have several large storage tanks. Fuel is then distributed, usually by trucks, to retail gasoline stations, where it is typically stored in underground tanks (see fig. 1). Changes in the temperature of gasoline and other petroleum products can occur for several reasons from the time these products leave the refinery until they are deposited into a vehicle. For example, retail fueling stations located near a refinery or a pipeline may receive fuel that is still hot from the refining process, and the heated fuel will affect the temperature of the fuel already in the storage tank. In addition, the use of underground storage tanks—particularly those with double walls—may lengthen the time required for the fuel to cool to ground temperature of about 55 degrees F. A common misconception is that the use of underground storage tanks helps ensure that fuel remains at or below 60 degrees F. According to a 2004 NIST study based on 2 years of data, the average temperature nationwide for fuel stored underground was about 64 degrees and varied among states from about 82 degrees in Florida to 53 degrees in Minnesota. Finally, the temperature of the fuel in the supply line to the pump will affect the temperature of the fuel initially deposited into the vehicle. State and local governments adopt and enforce weights and measures regulations, including those to ensure that retail fuel pumps accurately measure motor fuels. Unlike many other countries, the United States does not have a federal weights and measures regulatory agency, although two federal agencies help oversee the marketplace generally, and a third oversees aspects of the retail petroleum industry. Among other things, NIST cooperates with other entities, including state and local governments, to establish standard practices, codes, and specifications. The FTC enforces consumer protection laws, including laws related to unfair and deceptive practices in the marketplace. EPA and authorized states regulate underground storage tanks that store petroleum. These regulations require a leak detection system on the underground storage tanks. None of these agencies has formally endorsed or opposed the implementation of automatic temperature compensation. State and local governments develop regulations for weights and measures with input from NCWM and NIST. Established in 1905, NCWM is composed of state and local weights and measures officials, as well as related public and private sector members. A key goal of NCWM is to help ensure that consumers get the quantity of goods they pay for and that businesses sell the quantity that they advertise and intend to sell. NCWM helps ensure that uniform standards are applied to commercial transactions by developing regulatory standards for consideration by each jurisdiction, with technical, scientific, and administrative support provided by NIST. Membership in NCWM is open to all interested individuals, including regulatory officials, device manufacturers, and consumers; however, only regulatory officials may vote on the disposition of proposals under consideration by NCWM. Most proposals for regulatory standards that come before NCWM originate in one of its regional weights and measures groups located throughout the nation or in one of its four standing committees, each of which focuses on a specialized area, such as laws and regulations. At each of NCWM’s annual conferences, standing committees review the proposals submitted for consideration and hold open hearings to discuss them. Final reports containing the NCWM-approved model regulatory standards are presented in open forum to representatives and voted upon. Actions or subjects under consideration, but not proposed for voting, may be carried over for further consideration at a later time. NIST publishes NCWM’s newly adopted model regulatory standards in handbooks. If a state chooses to adopt the model regulatory standards in state law or regulation, they will then have the effect of law in that state. For over 30 years, NCWM has debated the pros and cons of compensating for temperature-induced changes in the volume of petroleum products, including gasoline and diesel. This debate is guided in part by NCWM’s principles that any method of sale or measurement must provide accurate and adequate information about products so that purchasers can make price and quantity comparisons. In 2007, a standing committee recommended a proposal to allow, but not require, automatic temperature compensation at the retail level. NCWM did not reach consensus on the proposal, and the issue was deferred for further consideration. In 2008, a steering committee established by NCWM recommended a proposal to require automatic temperature compensation following a 10-year period during which retailers could decide when to purchase the equipment based on their business needs. According to the committee, this would allow the marketplace to determine when and whether to adjust retail sales for temperature. However, NCWM members did not reach consensus on the proposal, and the issue was deferred for further consideration. Also in 2007, the California legislature directed the state Energy Commission to study the costs and benefits of using automatic temperature compensation devices for retail sales, among other things. The commission is to complete its work by February 2009. Stakeholders said that implementing automatic temperature compensation for retail fuel sales would involve costs to purchase, install, and inspect new equipment on gasoline pumps, as well as costs to educate consumers about the change. Some stakeholders estimate the costs to purchase and install the temperature compensation devices would range from $1,300 to $3,000 per pump. To provide context for the estimates from stakeholders, we obtained information from two equipment manufacturers. These manufacturers said the costs can vary by the type of equipment. More specifically, the price of retrofit kits for electronic pumps ranges from $900 to $1,800, plus $200 to install them. Costs to retrofit mechanical pumps are higher: $2,000 to purchase and install a kit for one hose and $3,800 for a dual hose pump. The costs to individual retailers would vary, in part, depending on the number of pumps, the number of hoses per pump, and the mix of electronic and mechanical pumps that would need to be replaced or retrofitted. In addition, an equipment manufacturer said that maintenance costs for electronic pumps would be negligible over the useful life of a pump, 10 to 12 years. Some stakeholders noted that the magnitude of costs has not been estimated, in part, because certain data, such as the number of mechanical pumps still in use across the country, are not available. As a result, the costs to adopt automatic temperature compensation are not known. Several stakeholders said costs to purchase and install temperature compensation equipment could also be affected by other factors. For example, under a phased implementation schedule, retailers could upgrade their equipment in the normal course of replacing equipment, whereas immediate implementation would require retailers to invest in the equipment without regard to their business plans or ability to pay immediately. Also, a small number of companies in North America manufacture new pumps equipped to automatically compensate for temperature or kits to retrofit existing pumps.