The heating oil industry is in the fight of its life. We are in danger of continuing to lose market share to other energy sources while under threat of being legislated out of business.
As an industry we have recognized many of our shortcomings. We know that for our descendants, we want them to live on a cleaner greener planet and carbon-based fuels are not part of that plan. Thankfully, there is a plan to transform our industry and provide arguably one of the cleanest, greenest, and most renewable fuels available. As always, our path forward is fraught with challenges. There are many stakeholders – customers, legislators, our own employees – who need convincing that the heating oil industry is no longer a dirty fuel provider.
While there is some uncertainty in the future, what’s crystal clear is that we will not win this battle by staying the course. That’s why so many industry leaders are getting behind what’s become known as “The Providence Resolution” which establishes an industry-wide (and industry-saving) target of achieving net-zero carbon emissions by 2050. I probably won’t make it to 2050, but it is important to me that the industry which has given so much to so many family-owned businesses, survives.
As with all good causes, it will not be an easy venture. We are fighting the “electrify everything” movement. The people and politicians waving the electric flag fail to consider where electric power comes from. Sure, electric panels on roofs and on solar farms are clean energy, however only around 1.8% of the electricity generated comes from solar, 62.7% comes from fossil fuels and 19.7% from nuclear according to EIA.
Renewables account for 17.5% and they make up the fastest-growing segment. The delivered fuels industry can be part of that growth and we can continue to support the family-owned businesses that provide high-paying jobs in local communities. The key is to have a comprehensive plan. The industry is in the process of coming up with one. But it will take money, lots of money, to implement such a plan. We need to get the word out to the masses.
The heating oil industry has lots of know-how when it comes to fighting for its rightful place. We fought for the National Oilheat Research Alliance (NORA) and were able to get legislation passed to assess $.002 gallon on all heating oil for education and research purposes. Those funds cannot be used to market against other fuels such as natural gas, and that industry continues targeting heating oil. In response, our industry formed the American Energy Coalition to point out the shortcomings of natural gas. Hundreds of thousands of dollars were contributed by fuel dealers and vendors serving the fuel industry. Their efforts have shown real progress.
A Penny for Your Thoughts
So how much will it cost to fund the kind of campaign I am proposing? Someone close to the net-zero carbon movement told me they thought it would cost around one million dollars a year — that works out to about nineteen thousand bucks a week. Chump change I say! For comparison purposes, consider that NORA generates eight times that at 20 points a gallon. For the campaign I am proposing, I think we would need to raise more than double that amount, and go to ½ cent. Do you think that your customers would mind paying ½ cent per gallon ($3.75 a year for 750 gallons) to promote and help implement a cleaner fuel with no carbon? I think it’s a no brainer. Collecting $.005 would generate around $20 million a year to help develop a clean fuel for future generations while saving an industry.
I don’t know how the cards will play out, but I do know that this is a great shot at long-term delivered fuel industry survival and a cleaner plan for our future generations. Support the industry. Let’s move the ball forward on net-zero carbon.
Steve Abbate is managing director, principal, at Cetane Associates (www.cetane.net), which provides financial advisory services to owners of heating oil and propane distribution businesses.