Is fuel oil a dying industry?

            An associate of mine told me that he recently attended a business meeting and was told that the oil industry was a dying industry. To say the least, I was somewhat defensive because, as I have said in the past, I have fuel oil in my blood.

When I asked why this statement was made, my associate said that he was told the gas companies are becoming a real threat because of the number of oil customers that are switching to gas and this was having a direct effect on oil. I have also been told that the number of cast iron oil boilers being manufactured has been reduced while gas boiler production and sales have increased.

            I have also noticed oil companies adding LP service and installations. Why? Because their oil customers are looking at this product as a relief from the high priced oil, and they have realized that many of their existing oil customers are also buying LP gas from another supplier. The thought process is simple ‘ if they can lock in the propane and oil, it is less likely that these customers will fall for one of the bait and switch tactics being offered.

            I’m not the least bit shocked to hear the number of switching to gas ‘STG” stories, especially with the higher than normal oil prices customers have experienced this past heating season ‘ $4.00 per gallon in some states. As usual I would bet the shareholders are getting richer, while the end users suffer trying to pay their bills. However, one fact still holds true, when it comes to efficiency, fuel oil will come out the leader in Btu’s per gallon over either natural or LP gas.

            I also remember the 1970s when there was both fear and panic from oil customers who were put on allocation by their oil companies due to the (created, I say) shortage of fuel oil. Even then the oil companies never let their customers run out of fuel, but some customers still put in gas burners. The reason ‘ they feared, a sentiment fueled by the media and other sources, that fuel oil was going to totally disappear.

The real sad part is, many of the companies that installed the conversion gas burner and removed the tank, never removed the fill and vent piping. I guess I don’t have to tell you the cost of the oil burner to gas burner conversions.

            There are several manufactures of oil heating equipment that are very aggressively investing in new technology that will lead us toward the reduction of fuel oil consumption. As an FYI, I recently saw a new oil burner that did not have a mechanically driven oil pump, and I must say, it really caught my eye. This new unit is equipped with an all-electric oil pump and a special combustion fan assembly. I’m hoping that it will be available for viewing at the up-coming National Oil Heat Service Manager convention being held in Hershey, Pa., May 22-26.

            So, is fuel oil dying? The best I can say is that it may be shrinking to some degree, but oil will be around for many years come.

China will boost oil consumption this year by 600,000 barrels per day and the U.S. will also increase consumption by 130,000 barrels per day this year as well. We will however need the continued support of Brookhaven National Laboratory, the National Oil Research Alliance and the National Association of Oil Heat Service Managers along with our own personal efforts to keep oil alive for the next generation.

In closing, I would recommend reading Drowning in Oil, a new book that is worth the money.