REU 2000 – Moral Hazard

This year’s project with Veeder-Root involves monitoring vapor return equipment for gasoline stations. When a vehicle refuels at a gas station, gasoline vapors escape from the vehicle’s tank into the atmosphere. Environmental regulations now require stations in several states to capture these emissions and prevent their escape into the atmosphere. In addition, the EPA has mandated controls on all new cars and light-trucks to capture these gasoline vapors. Our goal for the project is to determine when the vapor return system at the gas station has failed. Failure occurs when the system returns no vapors. We must determine when little or no vapor returned is due to the refueling of these new vehicles or to the failure of the vapor return equipment. Various statistical tests are employed to determine true failure of the vapor return systems.