Pun Salad

Witness witless Jamie Court at the Huffington Post, who huffs "'Hot Gas' Shorting Drivers $2.3 Billion And Who Cares?". Sample:

When you are filling up this Labor Day Weekend, if the temperature is more than 60 degrees, you are getting ripped off by about three cents per gallon in one of America's most longest-standing, outrageous ripoffs. That's roughly $2.3 billion per year.

Well, it's that—as you may remember from some course you took—matter expands when it gets warmer. As you may also remember, "matter" includes, specifically, gasoline. According to this NIST document, gasoline expands by a factor of 0.00069 for each increased degree Fahrenheit. When (say) you pump a given volume of 75-degree fuel, you're getting about 1% fewer gasoline molecules than you would at 60 degrees. (Conversely, when you pump 45-degree fuel, you're getting about 1% more.)

It takes a guy like Jamie, however, to look at this physics and detect a Big Oil Conspiracy. "US fuel pumps do not adjust for temperature, unlike their Canadian counterparts," he intones ominously. (Why does he specify 60 degrees as the point at which the outrageous ripoff begins? Because the American Petroleum Institute set that long ago as a standard temperature for measuring the density of petroleum products. It's an arbitrary temperature, picked for convenience, but Jamie thinks it's been handed down by the fossil-fuel gods, or something.)

What Jamie glosses over: this is a matter of regulation. Gas stations price by actual delivered volume because they are required by your local state government to measure fuel that way, with pumps regularly inspected for accuracy to make sure they're measuring that, and nothing else. State and federal taxes are also levied against actual delivered volume. (Aha! The government benefits from the "ripoff" too!)

So? That could easily change. For example, since Jamie thinks that varying-density gasolines should not have the same price, a workaround would be to charge by weight instead. End of "ripoff."

But that's hardly the only way to do it. We could charge by the Joule: how much energy would be released by the gasoline you're pumping? Or—here's one Al Gore could get behind—we could force stations to charge per carbon atom, since a lot of those will wind up in the air floating around as CO₂.

But the key point is, despite Jamie's outrage, none of this really matters. Obviously there would be some major administrative and infrastructure costs in switching over to a new pricing scheme for gasoline, but after that, consumers would be paying …about the same as they would have anyway. Because gasoline prices are set by supply and demand, not by tweaks to the pricing scheme. If Jamie's desired "adjustment" happened, we wouldn't suddenly and magically save the $2.3 billion he trumpets; how could that even begin to be true?

Jamie's unstated assumption is that there's some number Out There, which is the True Price for gasoline. And—obviously!—if you're paying more than the True Price, you're being ripped off! That's economic illiteracy, but the Huffington Post doesn't care.