By Charlie Uglietto, Cubby Oil & Energy By now, there’s no doubt you’re aware that strategic electrification has been eroding the hydronic market for a number of years. Heat pumps of every shape and size are being selected in place of boiler retrofits. That’s a disservice to the customer, due to the longevity, efficiency and Read more
oil heat
By Charlie Uglietto, Cubby Oil & Energy
By now, there’s no doubt you’re aware that strategic electrification has been eroding the hydronic market for a number of years. Heat pumps of every shape and size are being selected in place of boiler retrofits.
That’s a disservice to the customer, due to the longevity, efficiency and comfort advantages that hydronic systems offer, and it means lost revenue for mechanical contractors and energy delivery companies. Reducing the nation’s home heating carbon footprint is a noble cause, but the effectiveness of our efforts will be determined by the methods we use to achieve the goal. There are better alternatives than electrification, and the best option we have available right now, at least for homes with an existing oil boiler, is Bioheat® fuel.
Bioheat is a liquid fuel oil alternative that’s 100% renewable and available right now. It can be produced from a variety of renewable agricultural products including soybean oil, inedible corn oil, used cooking oil, fats, tallow, canola oil and other recycled oils. Better yet, Bioheat can be used in new or existing oil boilers with minimal if any modifications necessary to the boiler.
Unpacking Electrification
“The people that stand to lose the most from electrification, aside from oil dealers, are those in lower-income households,” said Paul Nazzaro, president of Advanced Fuel Solutions. “Why should families who struggle to put food on the table need to pay $20,000 to retrofit their home with heat pumps?”
For more than 25 years, Nazzaro has helped secure biodiesel’s place as one of the fastest growing alternative fuels in the nation. He has written and presented extensively on all facets of biodiesel production. As the supply chain liaison for the National Biodiesel Board, he was a key figure in the conceptualization of Bioheat fuel.
A recent study by ICF International concluded that policy-driven electrification would increase the average residential household energy-related costs by approximately 38% to 46%, resulting in an increase to the average affected residential household of between $750 and $910 annually. Additionally, the electrification movement isn’t as green as it would lead you to believe. As of right now, only a small portion of the nation’s electric energy is produced with renewables, and the percentage of renewable vs. of fossil fuel energy production drops further with the onset of heating season, when standby fossil fuel-powered generation is brought online to handle the increased load.
Electrification does not reduce fossil fuel use. It simply changes where fossil fuel is being consumed. The further this trend goes, the less fuel oil is been used for heating.
“We used to have a 10+ billion gallon/year residential heating oil market,” said Nazzaro. “That number is now 4 billion, 3.2 of which is consumed in New England, N.J., N.Y. and Pa. alone. That’s serious market erosion.”
Luckily for mechanical contractors whose businesses rely heavily on hydronics, the use of Bioheat is a solution that can be implemented immediately to stop and even reverse the loss of market share, while simultaneously increasing the country’s use of renewable energy.
Renewable, Low Carbon and Feasible
As an ultra-low carbon, liquid heating fuel, Bioheat is renewably-sourced, nontoxic and biodegradable. As bio-blends have increased over the past few years, burner manufacturers Beckett Corporation and Carlin Combustion Technology have been in touch with me, NORA and other dealers to gauge our experiences with higher blends. At times, I’ve had their engineers ride along with me to visit homes using high blends of Bioheat.
“Based on my conversations with Beckett and Carlin, converting from fuel oil to Bioheat isn’t a conversion at all,” explained Nazzaro. “Simple air adjustments may be needed on the burner because Bioheat is more oxygenated than fuel oil.”
Bioheat is currently available in three blends, each mixed with #2 fuel oil: B10 (10% Bioheat), B20 (20% Bioheat) and B50 (50% Bioheat). B100, which is also available, does not include any fossil fuel whatsoever.
“Homes in Washington State have been using B100 for a number of years, and well over 100,000 homes in the Northeast have been using B20,” said Robert O’Brien, research and technical consultant for NORA (National Oilheat Research Alliance). “Even at 100 percent biofuel, old burners are capable of using it with a few adjustments.”
“There are very few barriers to large-scale implementation of Bioheat,” continued O’Brien. “Homeowners are open to it, especially younger ones. It’s cleaner, it’s cost-competitive, and it’s renewable. It’s the oil industry’s answer to the carbon problem, and a very, very good answer at that.”
The Providence Resolution—which proposes to reduce greenhouse gas emissions in heating oil by 15% by 2023, 40% by 2030, and reach “net-zero” fuel by 2050—was approved at the 2019 Industry Summit in Providence, R.I., on September 16, 2019.
“Those are lofty goals, but entirely achievable,” said Nazzaro. “The only way they’re possible is for heating professionals to commit to the use of Bioheat.”
Such confidence doesn’t come unfounded, though. Before the Providence Resolution was approved, consulting agency A.T. Kearny was hired by NEFI (National Energy and Fuels Institute) to determine whether or not net-zero carbon emissions were a possibility for the liquid fuel industry.
Having advised many of the biggest governments around the world and three-fourths of the Fortune 500 list, consultancy A.T. Kearney is regarded as one of the world’s foremost consulting partnerships in the energy space.
“We came to the conclusion that yes, successfully achieving the goals laid out in the Providence Resolution is achievable,” said Neal Walters, a partner at A.T. Kearny “That’s the reality.”
How? By adopting a B20 Bioheat fuel blend by 2023, B50 by 2030, and B100 by 2050. Some skeptics may wonder if producing 4 billion gallons of a plant- and recycled oil-based fuel is possible in a year.
Supply Capabilities
“People need to understand the upstream,” said Nazzaro. “Not only is the soybean industry capable of it, but there are countless feedstocks for biofuel. The volume of recycled oil in this country alone is staggering.”
Kearney’s research indicates that much, if not all, of the required supply, infrastructure and production capacity already exists.
“Today, the northeastern U.S. produces about 150 million gallons of biodiesel per year, and to get a B20 blend [to completely replace #2 fuel oil] by 2023 we’ll need 800 million gallons per year,” said Yuri Kopylovski, a manager at Kearney. “That might seem like a pretty big increase, but in 2019, North American production capacity was about 3 billion gallons, and only 1.7 billion gallons were actually produced.” The capacity figure accounted for biodiesel plants in the U.S. and Canada. “This means that with existing plant infrastructure, we have about a 73 percent increase in production that could be made without any additional capital investment or reliance on imports from outside North America.”
The future is bright for renewable liquid fuel, but only if heating professionals act now.
Educating Consumers
As heating professionals, we have a very crucial role to play in the future of low-carbon energy mix. We must educate consumers on our ability to immediately reduce greenhouse gas emissions in the heating sector at little or no cost to them. The time to act is right now. There is no time left.
A wholesale executive predicted to me that if we don’t act within five years, we will have lost 35 to 50 percent of our customer base. ISO-New England is predicting that they can convert 750,000 homes from fossil fuels to heat pumps within the next five years. That’s a lot of customers to lose and a lot of delivered gallons lost. Now is the time we need to invest in our industry.
The most important thing mechanical contractors and fuel delivery companies can do is to realize that status quo won’t work. They need to embrace change.
“What’s great about our industry is that we have a product that allows us to change very quickly,” said Nazzaro. “Propane and natural gas can’t pivot like we can because they don’t currently have a renewable alternative that’s scalable nationwide. We do. Implementing Bioheat is more than defense. It’s a long term play.”
Aside from NORA, NEFI, and a host of other organizations, the largest, most progressive energy delivery companies in the country have already committed to the change. In 2021 for example, PETRO (the largest fuel oil dealer in the US) made a commitment to deliver only B20 or higher blends as supply commitments are coordinated between PETRO and their wholesale partners. My company, Cubby Oil & Energy, has also made the same commitment.
Our location gives us access to a number of wholesalers that sell biodiesel blends. There are parts of the country where these blends aren’t as readily available, but that’s changing rapidly. More and more wholesalers are starting to provide biodiesel blends at their terminals.”
Those wholesalers and oil dealers that refuse to offer biofuel blends risk being regulated out of existence. Massachusetts has implemented a new APS (alternative portfolio standard) incentive program including 80 dealers, in which the dealer receives an energy credit for every 33 gallons of B100 sold. Connecticut, Rhode Island and New York have blending mandates which are increasing the amount of renewable fuel being sold. In those three states, B50 will be the minimum standard by no later than 2035.
“The industry has made a commitment to liquid renewable fuel,” said Nazzaro. “We’re part of the solution to greenhouse gas reduction, not part of the problem. We’re doing now what others are hoping to accomplish later.”
“Installers of hydronic systems should be educating themselves,” he continued. “They should be speaking with their organizations about actions either being taken or that can be taken, and they should be educating customers.”
There are a variety of resources available to contractors right now:
- MyBioHeat.com is an excellent source of information for the consumer.
- NEFI.com hosts much of the latest Bioheat news concerning incentives, legislation and regulations.
- NORA, which has conducted a great deal of research on Bioheat’s use, transportation, handling and performance, publicizes information at Renewable Fuels – National Oilheat Research Alliance (noraweb.org) in order to help everyone in the industry transition to the renewable fuel.
- Cubby Oil’s website has an entire page dedicated to educating customers Clean-burning Bioheat® and Dependable Bioheat Delivery – Cubby Oil
“We are gaining momentum but we’re far from mature,” said Nazzaro. “We can’t compete with the utilities or heat pump manufacturers from an ad budget standpoint, so dealers need to educate themselves and talk with customers. I believe this will be the biggest lost opportunity our industry will ever see if we don’t act right now. You can have an impact today!”
Charlie Uglietto owns Cubby Oil & Energy in Boston, Mass. In addition to his 45 years’ experience in the deliverable fuels industry, Uglietto has been instrumental in deploying higher blends of Bioheat over the past decade. Despite owning the company, he spends plenty of time in the field and holds pipefitter, burner and HVAC licenses.
As OESP—the National Association of Oil and Energy Service Professionals made up of about 1500 dedicated energy professionals who service the energy needs of the Northeast portion of the United States—revs up for its annual trade show and convention May 17-21 in Hershey, Pa., it will be the last under the directive eye of Judy Read more
As OESP—the National Association of Oil and Energy Service Professionals made up of about 1500 dedicated energy professionals who service the energy needs of the Northeast portion of the United States—revs up for its annual trade show and convention May 17-21 in Hershey, Pa., it will be the last under the directive eye of Judy Garber; however, she will be active in the association.
Recently, I had the chance to speak with Judy about her journey, OESP and the future.
MH: How did you get involved with NAOHSM/OESP?
Garber: Oddly, I was looking for a new job. I was tired of traveling and I knew Bob Boltz, V.R. Boltz. Lebanon, Pa., who happened to be the president of the association at that time. I met with him and discussed ideas that I had. I thought that I would like to sell for a local contractor. He, being one of those, suggested that I just hold tight. He later told me to apply for the job as the director of NAOHSM. I had no idea what an association was but I “trusted” him. I was a vendor at the show for many years so I at least was familiar with the group. Honestly, it was one of my favorite shows. My experience is/was in sales and marketing. I was a sales manager, and honestly these are two skill sets that really can work well for an association. And, because I didn’t come from the association world, I had no “bad habits.” I was quite comfortable asking “why are we doing it like that” and didn’t hear the words, “because we always do it that way.” I learned quickly, and I truly have made some wonderful friends.
MH: How has the association evolved over the years?
Garber: I really don’t like to use clichés, but it sure isn’t a “good ol’ boys club” any more. Our organization is really committed to our mission of education. They care so much about the oil heating industry but they also are aware of an evolving energy industry and many of them are part of that. I remember being at a meeting in Washington, DC a number of years ago and the speaker predicted that the future of energy would include a menu of energy choices. I have never forgotten that. It will be. Since I became the exec in 1999, this industry has really changed. At that time we had strictly oil companies involved. Now there are few of them. Most have added propane to their mix of offerings. They also rely more upon the service department for revenue.
MH: What have been some of your major challenges?
Garber: Keeping both vendors and members motivated, energized and happy. I see some areas in our market that are “pumped” and others, sadly, just don’t care. I have learned the benefits of an association and that means being part of something bigger than yourself. Strength is in numbers for sure. Members that are “active,” meaning don’t just pay dues but actually attend meeting and events, gain so much. True networking often times takes place at that happy hour that takes place before the meeting.
MH: What has been the most rewarding aspects of the job?
Garber: The most rewarding part of my job is probably the Awards Banquet. When I see five or six young people receive the acknowledgement of a scholarship—it is a delight. Their parents are so proud of them. Since we started the scholarship in 1999, we have awarded well over $275,000 in awards. For a small association, that is pretty amazing to me. Oil Heat Cares, too, has been something of which I am proud. It is beautiful to see the pride that our members show when they have done something special for another individual.
I also enjoy the annual convention. Someone once told me that its like a family reunion. I have to say, that is a good description of our event.
MH: Can you describe behind the scenes at OESP, including those that have worked their tails off?
Garber: This is a great question, John. Any officer of our association works hard. If they don’t . . . Our convention committee, comprised of Jay Moser, Harris Comfort; George McQueeney, East River Energy; Dave Bessette, MacFarlane Energy really help pull the show together, as well as the sitting president, which happens to be Al Breda, Sippin Energy. These gentlemen really put in the time. Ralph Adams, Parker Fuel, is one that stands out because he puts so much into the education side of the association. I can’t miss two other my buddies: Bob Boltz who suggested I apply for this position and Dan Holohan who has become a great friend, as well. I know that I am missing others but these guys stand out. They truly are awesome and you have to commend their bosses for encouraging them to be involved.
MH: As you relinquish your executive director duties, Who will be taking over?
Garber: We won’t start the search until very late fall. We have a OESP 2-day Forum in August and that will be one of the topics. I am encouraging them to look toward the future. Maybe we should hire an individual with strengths in technical education vs. association management. We won’t know until it is discussed. But associations, in general, are evolving and we need to think “outside of the box,” as well.
MH: Are you confident in the direction of OESP?
Garber: I am because we have such quality volunteers. I will be around long enough to guide if needed.
MH: Just saw the release where OESP/AREE have partnered on trade show/convention for 2016. How that came about?
Garber: The simple answer is, its time. Something needed to happen. There are too many shows with too few people attending them. In my humble opinion, we need to build an outstanding product that attendees know they need to attend. The oil industry is shrinking but it sure isn’t going away. OESP is evolving but it will take time to attract those in other energy businesses. For example, those that specialize in alternatives, plumbing, AC.
Our focus is on service and installation and by partnering with AREE we are stronger and we can together be a very strong show in the Northeast when it comes to Oil and Energy. We’ll focus on the technical side of the business and their strength is on the management side. So that combination is good. The job of the service manager has evolved, too, and they are more of a GM vs. someone who is solely the technical guy, so our members can take advantage of the additional management training that will be offering.
MH: I know that you will still be involved with OESP, but stepping down as ED makes you feel ______?
Garber: Why? Until June of 2016 I really don’t know. I love working and enjoy the energy business so I don’t know. But I don’t want to be one of those that just hangs around.
MH: Oil Heat Cares is always an important aspect of the organization. Any new projects?
Garber: 2015 was kind of a “quiet year” for Oil Heat Cares. I am certain it was because of the long cold winter here in the Northeast. I suspect we’ll be bombarded this summer. One of the better ones this year has to do with a World War II veteran and his daughter who is his caregiver. This family truly is why Oil Heat Cares exists. It is there for those that fall through the cracks. Mr. Bullis’s daughter worked for a local hospital and after years of service lost her job. Thus, when the heating appliance needed to be replaced they didn’t have the funds. Our guys from the Fairfield County Chapter came to the rescue under Oil Heat Cares.
The New York City Chapter, too, does a great job of identifying a project and invites the Saunders Technical School, Yonkers, New York to join them. The students learn how it feels to work side by side with energy professionals and also to give back to their communities. It is a winning combination for all.
MH: Finally, the last time you said, “Today is a great day,” you were doing what?
Garber: Last Saturday when my husband, Larry and I went to our grandson’s confirmation in DC. The weather was beautiful, the service was wonderful, and I couldn’t believe that I have a grandson 14 years of age. I also have a granddaughter who is 16. Life is precious and, as the years move forward, I am reminded of that each and every day.
Prediction backed-up by both US and Global On October 7, the National Association of State Energy Officials, in partnership with the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability and the U.S. Energy Information Administration (EIA), convened the 2014-2015 Winter Energy Outlook Conference in Washington, D.C This year’s conference included a presentation Read more
Prediction backed-up by both US and Global
On October 7, the National Association of State Energy Officials, in partnership with the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability and the U.S. Energy Information Administration (EIA), convened the 2014-2015 Winter Energy Outlook Conference in Washington, D.C
This year’s conference included a presentation on EIA’s 2014 Winter Fuels Outlook as well as panel discussions with well-known industry representatives and energy experts about factors likely to affect energy markets this winter in the United States and globally.
The EIA projected a decline in heating costs for consumers. With lower consumption anticipated and retail price projections showing a reduction, homeowners using heating oil will spend 15% ($362) less, on average, than last year if long-term weather forecasts hold. If temperatures are as little as 10% warmer than anticipated, the savings may be as high as 24%.
This analysis was supported by Seth Kleinman, Global Head of Energy Strategy, Citi Group, who highlighted various worldwide and domestic forces that should continue keep oil prices down:
- Pipeline and other infrastructure developments in the U.S. has led to downward pressures on pricing for U.S. produced oil. Additionally, the amount of shale oil entering the market is affecting international markets.
- The geopolitical pricing premium for crude oil appears to be shrinking as speculators have been liquidating their positions and the amount of oil traded by speculators on ICE Brent is down 75 percent from its peak
- At the same time the supply situation is looking positive, the demand side of the equation also points to lower prices. Mr. Kleinman indicated that Citi economists continue to forecast tepid global GDP growth in 2015 with only pockets of outperformance here and there. August revisions cut the 2014 outlook by 10 basis points to 2.8% and trimmed 2015 global growth estimates to 3.4% from 3.5%. Japan and Europe are likely to expand quantitative easing programs later this year but with negative real rates and sluggish inflation expectations, growth is expected to keep struggling in these major economies in the coming year.
- Additionally, there are a number of new refineries coming online in the Middle East, south Asia and the former Soviet Union, which will continue to put pressure on refinery margins.
The continued downward movement of heating oil prices in recent weeks supports Mr. Kleinman’s remarks.
At the same meeting, John Huber, President of National Oiheat Research Alliance, described the efforts of the heating oil industry to improve its product. He reported on the efforts of the Northeastern states to move to a low-sulfur heating oil product which improves efficiency and dramatically reduces emissions. He said that this step would also lead to long-term improvements in heating equipment as it is offered to consumers.
Additionally, Mr. Huber described the efforts of the Oilheating industry to move to ever-increasing blends of heating oil and renewable biodiesel. These steps will reduced greenhouse gas emissions and position the industry to be a long-term solution as a renewable fuel for millions of American customers.
For more information about NORA and its programs or services, call 703-340-1660 or visit the web site, www.NORAweb.org