I Love Recycling

This is getting so easy.  The Republic is trotting out old stories, so I get to trot out old responses.  We can function on auto pilot. 

Last year the Republic ran a series of stories out of Kansas about hot gasoline.  The theory is that since gasoline expands when it gets hot, gasoline sold at a higher temperature is a rip off because it has less energy per gallon.

I exposed the logical fallacy of that reasoning in a piece I called "These Go to Eleven."

Almost exactly one year later, the Republic has trotted out the same old fallacy. 

Each time drivers fill their fuel tanks in Arizona's simmering summers, they likely see $1 or more evaporate.  Because gasoline expands in the heat, that's the estimated dollar amount of energy they purchase but they never receive.

Here's my response from last year.

"If you haven't seen the mockumentary This is Spinal Tap, you have missed a rare treat.  Here's a great scene in which Nigel explains the unique feature of his amp.

Nigel Tufnel: The numbers all go to eleven. Look, right across the board, eleven, eleven, eleven and...
Marty DiBergi: Oh, I see. And most amps go up to ten?
Nigel Tufnel: Exactly.
Marty DiBergi: Does that mean it's louder? Is it any louder?
Nigel Tufnel: Well, it's one louder, isn't it? It's not ten. You see, most blokes, you know, will be playing at ten. You're on ten here, all the way up, all the way up, all the way up, you're on ten on your guitar. Where can you go from there? Where?
Marty DiBergi: I don't know.
Nigel Tufnel: Nowhere. Exactly. What we do is, if we need that extra push over the cliff, you know what we do?
Marty DiBergi: Put it up to eleven.
Nigel Tufnel: Eleven. Exactly. One louder.
Marty DiBergi: Why don't you just make ten louder and make ten be the top number and make that a little louder?
Nigel Tufnel: [pause] These go to eleven.

Nigel never gets it.  It's like the joke I used on my kids when they were five.  "We are getting a large pizza, do you think we should cut it into 8 slices or 16?"  They look at me quizzically and I say. "Let's cut it into 16 because I'm really hungry."

The Republic is falling into the same trap with two A1 above the fold articles about the new scourge that were are facing...gasoline that is sold warm in the summer. 

"Hot" fuel is costing him the price of a good lunch today, Duke reckons, and as much as $700 a year.

Duke, you see, is one of the few Americans who realize that fuel is often sold at temperatures much hotter than the federal standard of 60 degrees. It's a standard agreed to nearly a century ago by the industry and regulators but virtually unknown to the average consumer.

Why is the Republic re-printing two stories from Kansas A1 above the fold to complain about warm gasoline?  It seems like a vehicle to bash "Big Oil" but it's pretty lame even with that as a goal.  Isn't there anything important happening locally?

More importantly, are they right?

Well, Duke may "reckon" that his warm gasoline is costing him money, but he's like Nigel "reckoning" that his amp plays louder at eleven. 

The price of gasoline floats according to supply and demand.  If the gas is warm throughout the city, then that will be reflected in the overall price.  It's just like switching to liters.  Is gas more expensive by the liter?  Obviously not. 

Sure, If a gallon costs $2.95 at 50 degrees, it's better than a gallon that costs $2.95 at 90 degrees.  But if all the other conditions remain the same, the market will charge less for summer gas than winter gas.  So while it is tempting to compare the same price per gallon at different temperatures and reckon like "Duke" that you are being ripped off.  The real comparison is $2.95 per gallon at 50 degrees and, say, $2.80 at 90 degrees.

The Republic will never understand the difference.  They just found a story from Kansas that seemed to score a few points against "Big Oil" and decided that they were the most important stories of the week.

Comments

[Le Templar]

Greg might have a valid argument on why we don't need to change the pricing standards for "hot" gasoline. But his criticism of the Republic for reporting on this issue is off-base. There is a big push in several states and in Congress to mandate pricing changes based on gasoline temperatures. Any newspaper is doing its job when it explains current debates about public policy proposals to its audience.

[ron]

I used trade a nickel to my kid brother for a dime - because the nickel was bigger :)

[Scott Gustafson]

Greg, My take on the issue is similar to yours. And I also recycled my answer.

http://azecon.blogspot.com/2007/09/got-physics-right-but-economics-wrong.html