Observations on the future of heating oil linked a number of speakers, including Arthur Marin, executive director of the Northeast States for Coordinated Air Use Management, and Carol Grant, commissioner of the Rhode Island Office of Energy Resources, at the Southern New England Energy Conference in Newport, R.I.
NESCAUM, based in Boston, is a nonprofit association of air quality agencies in the Northeast. Its board of directors consists of the air directors of the New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), and of New Jersey and New York. The association’s purpose is to provide scientific, technical, analytical, and policy support to the air quality programs of its member states, helping them implement national environmental programs required under the Clean Air Act and other federal legislation.
Marin’s key messages to the audience in Newport: Buildings are the second largest source of greenhouse gases in the region after transportation. “So there obviously has to be a strategy that targets those sources. I do see opportunities, but the bottom line is our job on behalf of NESCAUM is to provide technical support that will help [member states] figure out how to achieve state climate goals—and those are a 40-percent reduction by 2030 and 80 percent by 2050,” says Marin, speaking in a phone interview after the conference. “The reality is it’s going to take some dramatic transformations.”
NESCAUM uses the Energy Information Administration’s Annual Energy Outlook to help shape its GHG reduction goals. For commercial and residential buildings in New England, EIA projects that 90% will still be heated by some form of fossil fuel—primarily natural gas, a lot of distillates, and some propane, Marin says. “On the other hand, our projections show that to meet our targets we have to be just about the opposite: about ninety percent non-fossil fuel to heat those buildings.”
NESCAUM reviewed several scenarios. One introduces “a significant amount” of what’s projected to be the available biofuels into the heating sector. “That one’s a bit more optimistic for the industry, in that we show about a third of heating could be done with advanced biofuels,” Marin says. “That would allow traditional heating oil companies to deliver product and services much as they do today.” For this scenario, NESCAUM used a U.S. Department of Energy study that projected that there would be “significant amounts of biofuel available in the future—equivalent to about a third of our current diesel and gasoline use,” Marin says. In that case the size of the propane market would be “pretty small,” Marin says, “as would heat distillate fuel, but biofuels could be a fairly significant source of heating in the region under that scenario.”
The challenge is how to best use that available biofuel, Marin says. “Is it best used in aircraft and non-road equipment and long-haul trucks, or is it best used in buildings? We don’t know the answer yet.”
Another scenario focused primarily on electrification of heating, which would feature air-source heat pumps and ground-source heat pumps, Marin says. Referring to “the burgeoning air-source heat pump industry,” Marin notes, “Many of the major companies that are putting this technology in place are traditional heating oil companies. Obviously, it’s not the same kind of service opportunity that heating oil provides, but in terms of installations we see heating oil companies have the contacts, the credibility with consumers. So, if consumers want to put an air-source heat pump in they’re likely to go to their oil heat dealer because they know those folks.”
“Positive messaging” for the heating oil industry, Marin says, includes this: “We see natural gas as a bridge fuel. I know it’s been the primary competitor for heating oil. In some ways, we project that there should not be a lot more transitioning to natural gas heat if we’re to meet our climate goals.”
Marin says, “Every industry sector—from electricity generation to transportation to buildings—is going to have to change dramatically.” Reducing GHG emissions, he says, “is going to affect all industries, and the heating oil industry is no different. It really comes down to what vision does this industry have for itself and how does it transform in a way that allows it to capture new and emerging markets for heating.”
Marin adds, “We’ve always had good discussions with the heating oil industry.” He cites as examples the ongoing, and in some cases continuing, discussions about low-sulfur heating oil and biofuels. “So, I hope we keep the lines of communication open. We’ve done some really good things together when we’ve been creative and willing to listen to each other. I hope there are similar opportunities moving forward. We’re just sorting through this. We don’t pretend to know the answers.”
Rhode Island’s commissioner of the Rhode Island Office of Energy Resources, Carol Grant, says that from the state’s perspective, “fuel dealers can play and are playing a foundational role in driving toward the energy future we see. The fuel dealer industry has already made great strides toward developing a cleaner product for consumers in Rhode Island: From the 1980s to just a few years ago, through the use of new technologies, the fuel dealer industry reduced its carbon footprint by more than forty percent; Rhode Island’s bio-blending requirement will bring all heating oil sold in the state to a five percent bioblend by 2017. In 2018, the ultra-low sulfur heating oil requirement will become 15ppm, and fuel dealers will be able to offer new highly-efficient heating equipment with very low emissions—equipment that is much less expensive than that which is on the market today, making it much more affordable. At the end of 2014, ASTM International approved the use of up to twenty percent bio-blends. The approval is for use in new heating systems; the use is conditional in older systems.
“Fuel dealers are well positioned to increasingly take part in a new, growing clean energy economy to help the State achieve our energy, economic, and environmental goals,” Grant says. “We are keenly aware that the current crop of delivered fuels businesses have already historically successfully transitioned over time into new areas: once providing deliveries of coal and ice over a century ago to one that now delivers fuel oil, propane, kerosene and equipment installations and servicing. [Rhode Island Gov. Gina Raimondo] would never want an audience this distinguished to hear from her administration without a reminder of her number one priority—good jobs for Rhode Islanders. She has challenged the state to double its clean energy jobs by 2020, and we currently are more than halfway to that goal. Many of those jobs are traditional businesses, often small businesses, that are making transitions to include clean energy in their portfolios. You are a reliable industry for providing good jobs during all the technology transitions that are occurring. OER worked with Roberta [Fagan, executive director of the Oil Heat Institute, Rhode Island] and others this year and will continue to pursue all options going forward to support workforce development for your talented workforce to prepare for the changes ahead.”
The Southern New England Energy Conference is organized by the Connecticut Energy Marketers Association, Massachusetts Energy Marketers Association, and the Oil Heat Institute of Rhode Island. The event was held Sept. 18-19 at Gurney’s Resort & Marina in Newport. It included a series of technical workshops under the aegis of the National Oilheat Research Alliance, one of which featured Roger Marran, president of Energy Kinetics, a manufacturer in Lebanon, N.J., detailing how his company responded to a call by NORA to design a more efficient tankless coil boiler (coverage of Marran’s talk will appear in the December issue of Fuel Oil News).
Although primarily an educational event, the conference does accommodate some exhibitors, who this year included: Canary Compliance (cancomply.io/), a provider of a system that monitors underground storage tanks; Poem Technology, a provider of iLevel Tank Monitors (poemtechnology.com) and first-time exhibitor Ansir Communications, a telephone answering service for businesses, reachable at 203-281-9299.—Stephen Bennett
Stephen Bennett is the editor of Fuel Oil News.