Going strong at 70

Feature Story

Going strong at 70
Much like the industry it chronicles, FON has survived in challenging conditions

By Chris Traczek

When choosing a year to start a new entrepreneurial enterprise, there had to have been better choices than 1935. First of all, the country was still battling to shake the grip of The Great Depression, a battle that some would argue went on until December of 1941, when the United States entered World War II following the Japanese attack on Pearl Harbor.

Secondly, when your new brainchild is a magazine devoted to the fuel-oil industry, what chance could there be for success in a world that would have coal as its foremost fuel for another 20 years?

But Curtis C. Klinger had a dream and in 1935 he made that dream a reality when he founded a magazine and called it Fuel Oil News.

Amazingly, 70 years have passed since Mr. Klinger produced that first issue of FON and the publication remains a vibrant, relevant part of the fuel-oil industry, an industry, like many, that has been buffeted by change and threats both at home and abroad. But for seven decades it has soldiered on, and in this issue of FON we would like to acknowledge its 70th anniversary.

In 1935, the overall oil and fuel industries in the United States were still shaking out. By the time of World War I in 1917, coal had passed wood as the fuel of choice in city homes. Then, by the 1930s, fuel oil and kerosene had begun to replace wood as a primary energy source. Heck, as the 1940s dawned, the United States was still the leader in oil production with the U.S. producing 65 percent of the world’s oil in 1940. That changed with the discovery of the “supergiant” oil fields in Kuwait and Saudi Arabia.

As most of you are well aware, the majority of fuel-oil consumption in this country occurs during the winter heating months of October through March in the Northeast, so how that fuel consumption goes in the Northeast helps to greatly determine the health of the industry.

To say that the industry has never been stronger would be a lie. But to say that it is one of the most resilient around, with the ability to adapt to a never-ending series of challenges, would hit the nail on the head.

True, projections by the Energy Information Administration have said that fuel-oil consumption in the Northeast would be138 million barrels this winter, down from 224 million barrels in 1980. But if predictions of fuel oil’s demise were to be believed, the spigot would have run dry 30 years ago. In the mid-1970s, with the major oil companies having withdrawn from the market and utilities beginning to cut into the oilheat customer base, experts were predicting that oilheat was practically obsolete.

However, two occurrences were able to help lift the industry off the mat. The first was a brilliant ad campaign created by the Metropolitan Energy Council that said, “Gas Heat Makes Me Nervous.” At the same, research facilities like Brookhaven National Laboratory were making technological inroads in equipment that was designed to improve oilheat efficiency and indoor comfort. An effort was also made to upgrade old, antiquated, fuel-guzzling oil-fired systems.

True, while the EIA said that while residential fuel oil use in the Northeast has declined by about 20 percent since 1980, as natural gas availability and energy efficiency have decreased the amount of heating oil consumed in the region, since 1992, heating oil prices in the Northeast have been lower on average than natural gas prices, allowing heating oil to retain its market share.

Since 1993, the number of heating oil customers in the Northeast has remained relatively constant, and oil has maintained a 30-percent share in the heating market for new single-family homes, offsetting the number of customers switching to gas over the same period
The use of fuel oil also continues to rely heavily on the fickle ways of Mother Nature. While a string of warmer-than-normal winters at the dawn of the 21st century suppressed fuel-oil consumption, the past two harsh winters have been a boon to fuel-oil dealers.

Looking at the country as a whole, approximately 7.7 million households use fuel oil to heat their homes in the winter with 70 percent ‘ or 5.4 million ‘ located in the Northeast. In 2001, 5.4 billion gallons of heating oil were sold to residential consumers in the Northeast, or 82 percent of total residential fuel oil sales. That year, the Midwest accounted for 9 percent of residential fuel oil sales, the Southeast 6 percent and the West Coast 3 percent.

With oil prices creeping higher and higher, the need for innovation has led to the creation and increased use of alternative fueling options. The growing popularity of bioheat blends, which combine fuel oil with a percentage of readily renewable plant-based fuels, has the potential to drive the industry into the future. New additives are making it easier to store fuel safely and without loss of product. And, as mentioned earlier, advancements in technology ‘ from burner design and operation to the added efficiency of GPS-aided fuel deliveries ‘ will also help the industry move ahead. And in an example of history repeating itself, the industry got a much-needed shot in the arm a few years ago with the creation of the spiffy advertising campaign for the National Oilheat Research Alliance’s Clearburn Science.

In 1985, Fuel Oil News was celebrating its 50th anniversary and George Schultz was in his third year as editor of the magazine. At that time, George, who would eventually edit this magazine for 20 years before passing away three years ago this month, assessed the state of the industry and its continued validity in this way:

“Sometimes if you’re too close to a situation you can’t see the problems clearly. They can only be seen by some a ‘step removed’ who has a better perspective and is more objective.

“Although Fuel Oil News is an integral part of the oilheating industry, we are outside the day-to-day business activities involved in operating a marketing organization so we can look at the industry from many different angles. Because we are in constant communications with all levels ‘ marketers, suppliers, association executives, government officials and consumers ‘ we are able to assess all the facts and provide our readers with some ideas that perhaps they may not have thought of themselves.

“We hope we can continue to serve the industry in this manner for many years to come. Nobody has all the answers, but by constantly examining our actions, we can learn from our mistakes. We’re never too old, or too young, to learn.”

It is our hope, as FON celebrates 70 years, that we have lived up to those words and will continue to do so for at least another seven decades.

Major Events of 1935

January