Renewable Energy Group Inc., the nation’s largest producer of biodiesel fuel, is very interested in working closely with the heating oil industry and helping energy marketers protect their customer bases and get on the right side of air emissions policy.
That is the message delivered by REG President and CEO Daniel Oh at the recent Atlantic Region Energy Expo, in Atlantic City, N.J. REG was a Diamond Sponsor of the Expo, and Oh was the featured speaker at the Expo’s Opening Session.
Oh told attendees that REG is working to help make renewable energy a part of the everyday experience for heating oil customers in the Northeastern states. “Together we can serve customers, make money and improve the value of the services we provide,” he told the energy marketers in attendance.
Biodiesel is a great fuel whose production can revitalize both rural and urban areas while improving the country’s energy security and diversity, but none of that matters if the businesses in the supply chain are not profitable and built to endure, according to Oh. “It’s hard to find products that matter and bring value and that people will pay more for,” he added.
REG aspires to work in parallel with the petroleum industry, creating similar products. “Our path is to sell through the same distribution channels into the same blending channels to the same customers,” Oh said. An immediate goal is to create “supply assurance” for marketers by providing reliable fuel predictably with risk management services and no worries about fuel quality.
“It’s your brand being presented to the customer, and we have to deliver a product that doesn’t create problems and that delights the customer and gives them a reason to keep using heating oil and bio oil and not think abut it because of all the values delivered,” Oh said.
Earlier this year, REG created REG Energy Services, LLC, a division that sells heating oil, ultra-low sulfur diesel (ULSD) and BioHeat® blended heating fuel at 15 locations in the Northeast. The division is headquartered in Portsmouth, N.H., and led by petroleum industry veteran Barry Knox.
Diverse Feed Stocks
While REG is known as a processor of virgin vegetable oils such as soybean oil, the company has broadened its feed stock base to include waste cooking oil and animal fat. “We will arbitrage whatever raw material mix works best,” he told the audience. Multi-feed stock biodiesel can actually be higher in quality than biodiesel made exclusively from soybean oil, he noted.
Oh said REG is dedicated to the heating oil industry and aims to assist companies and industry associations however it can. He noted that many policymakers are focused on reducing harmful air emissions, and heating oil associations like the New York Oil Heating Association have been instrumental in promoting biodiesel blends as a solution. He urged marketers to connect with REG Energy Services this offseason and work to increase biodiesel penetration before the cold weather returns.
“This is a great part of the country to distribute biodiesel as part of heating oil,” he said. “We can sell biodiesel all over, but we see a fundamental need in New England to serve through Bioheat, and I believe we can be a great partner. We see Bioheat as a strong way to counter what natural gas is doing in the New England area.”
With all the challenges facing heating oil marketers, including uncertain weather and aggressive competition from the natural gas industry, biodiesel fuel can help marketers sell more effectively, according to Oh. “This is a great time to begin [selling Bioheat® fuel]. The infrastructure is in place, the feedstock is in place, and it is absolutely important that it be embraced,” he said.
“We’re all in on Bioheat,” Oh said of REG. “We’re happy to be a petroleum distributor to get Bioheat out there. We want to support you because it’s mutually beneficial. We appreciate you and what you’re doing. Hopefully we will find ways to do things together.”