After a four-year outage, Oilheat has a check-off program again
The Oilheat industry can reignite its research and education programs in 2014 with the support and leadership of the National Oilheat Research Alliance, which is back in business after a four-year hiatus caused by gridlock in Congress.
NORA returns with a new five-year authorization through 2018 after supporters succeeded in including the measure in the new $956 billion Farm Bill, which passed the U.S. House on Jan. 29 and the U.S. Senate on Feb. 4. President Obama signed the bill into law on Feb. 7. NORA had been without Congressional authorization since Feb. 6, 2010, following the expiration of the previous five-year authorization.
John Huber, President of NORA, said the Alliance will be working under a new set of rules that will shift the emphasis of its efforts. “We will be much more focused on research and development, and unfortunately the consumer education aspect will be reduced,” he said. “Additionally, there will be some more administrative steps to ensure we continue to provide value to the industry and its consumers. Finally, we will be working more closely with low-income consumers of oilheat to help reduce their consumption.”
The reauthorization ends a four-year struggle caused by gridlock in Congress and opposition by one key U.S. Senator. Industry leaders had been trying to secure NORA reauthorization since 2008, when NORA was still in business and trying to ensure its continuation. In 2010, the Alliance’s authorization ended, and it could no longer collect the assessment of two-tenths of a cent ($0.002) per-gallon that funded an annual budget of $12 million.
“There were two main issues with Congress,” Huber explained. “With the change in Administration in 2008, and the Tea Party Victory in 2010, the Congress was changing its directions and thinking of how it governed. To that end, all programs were under increased scrutiny, and the pace of legislation was very slow. Secondly, the Congress has not been working on relevant energy legislation.”
NORA leaders tried again and again to attach the reauthorization to a bill in Congress, but no opportunity materialized. The reauthorization effort was also obstructed for several years by New Mexico Sen. Jeff Bingaman, but he left office in 2012, freeing NORA to pursue reauthorization without opposition.
After several fruitless years of effort, NORA finally spotted a solid opportunity in the new Farm Bill, which emerged in late 2013 as pertinent legislation that had a shot at enactment. “We saw the Farm Bill as a potential vehicle for NORA based on its energy provisions,” Huber explained. “We then turned to our key supporters including Senator [Jeanne] Shaheen to start paving the path for our effort.
“They talked to the senior personnel in charge to see if this was viable. After some positive feedback we began to bring in a greater level of supporters. This nationwide effort included Representatives from across the country, Oregon, Washington, Nevada, Illinois, Nebraska, Georgia, Mississippi, who all pitched in with our traditional allies to push us over the top. Thankfully, our strong community ties nourished for decades encouraged many members to support us.”
Perseverance was the key to victory, according to the NORA President. “At times, it seemed impossible, and one hurdle turned into two new hurdles. However, through hard work, we just kept moving forward, one step at a time.”
New England Fuel Institute (NEFI) President and CEO Michael Trunzo concurred. “Everyone knew this would be a heavy lift given years of gridlock in Washington, but through a collective effort, we managed to pull the proverbial ‘rabbit out of the hat,’” he said. “This victory was made possible thanks to a determined and united industry at all levels – state, regional and national.”
Trunzo credited the victory to the combined efforts of many organizations and individuals, including the staff and volunteer leadership at NEFI, the Petroleum Marketers Association of America (PMAA), the National Association for Oilheat Research and Education (NAORE) and various state and local oilheat associations. “Even non-oilheat PMAA member associations reached out to key members of Congress on our behalf,” he noted.
The recent reauthorization keeps NORA’s mission intact with a few changes.
- It expands the assessment to include nearly all distillate fuel and distillate fuel blends, including biofuel blends, used for nonindustrial commercial or residential space or water heating.
- It explicitly prohibits dealers from passing-through NORA assessments to residential customers, reinforcing NORA as an industry (not consumer) funded program.
- It allows up to 30 percent of assessments to be used for consumer education programs, including on the proper use and benefits of Oilheat and Bioheat® heating oil.
- It requires that at least 30 percent of assessments be used for research and development of new energy efficient technologies and renewable home heating fuels such as Bioheat® heating oil.
- It sets aside 15 percent of assessments for the creation of a new program that aims to replace or retrofit inefficient oil-fired heating systems in low-income households.
With reauthorization in hand, NORA can now return to its mission of supporting the Oilheat industry with research and development, industry education, consumer education and more. As of early February, NORA’s Executive Committee was expected to meet soon and decide when to resume collecting the assessment on every gallon of heating oil sold in the NORA states.
While NORA’s assessment rate is unchanged at $0.002 per gallon, collections will be lower than before. “Due to improved efficiency, our expectations of revenue will be reduced from our last full year of consumption,” Huber said. “Our expectation is that revenue will be $9 million to $10 million, compared to $12 million in 2009.”
The key tasks for the next few months are making sure that collections resume smoothly, and bringing NORA’s education and research programs back to their robust level, according to Huber. “Biodiesel will continue to be a priority, and making sure the industry provides great service with the new equipment will be vital to our future,” he added.
Reaction to the news was celebratory throughout the Oilheat industry. NEFI’s Trunzo said the reauthorization of NORA was critical to the home heating industry. “For a decade NORA has helped provide R&D, in conjunction with Brookhaven National Lab, that has led to more efficient, cleaner burning appliances and renewable biodiesel-blended fuels. This has reduced the industry’s carbon footprint and helped our customers save money on fuel and maintenance costs. Reauthorization means we can move onto the next phase of R&D, technician training and consumer-focused programs.”
“Having NORA back will truly revitalize the industry,” said Michael Ferrante, President of the Massachusetts Energy Marketers Association (MEMA). “It will pump new life blood into so many important programs and activities that have been absent for four years, and provide a much-needed morale lift to everyone working in the industry.”
Kevin Rooney, CEO of the Oil Heat Institute of Long Island, agreed. “You cannot possibly overestimate the importance of NORA being reauthorized,” he said. “Not only does it mean that the industry has a revenue source for a whole lot of very worthwhile programs, but it gives everyone a new sense of faith and optimism in the future. I think this is one of the most important things that comes out of this. We know that a lot of good things that have been put on the back burner or canceled are going to be reactivated and lead to more positive developments in terms of the fuel we distribute, the equipment we sell and the quality of service that we provide.”
NORA’s return is also eagerly anticipated in Connecticut. “The work that NORA will do now that it is reauthorized will go a long way to improve and strengthen the foundation of our industry,” said Chris Herb, President of the Connecticut Energy Marketers Association. “NORA will allow for a consistent and sustained effort over the next five years promoting consumer education, technical education and research and development.”
In Vermont, Matt Cota, Executive Director of the Vermont Fuel Dealers Association, said, “NORA is critically important to the success of the Oilheat industry in Vermont. More than half of Vermonters choose to heat with oil, and NORA ensures that these consumers will have access to more efficient heating equipment and highly trained technicians.”
Looking ahead, John Maniscalco, President of the New York Oil Heating Association, said NORA can help the industry build a better future. “I’m a firm believer in polishing up the industry’s image,” he said. “The pricing issue, at this juncture in time, appears to be one that is outside the realm of reality, and because of that many naysayers opine that the oil heating industry no longer has a future. But as we await energy pricing parity, and I do believe parity will return, we can meet and exceed the competition in the area of air emissions.”
He pointed out that Oilheat has made big strides in New York City by switching to a blend of ultra low sulfur heating oil and biodiesel. “In opposition to my naysaying brethren, I say, ‘Yes, we do have a future!’ What we need is the staying power as we await energy price parity, and an image building bridge as we await that parity. And that bridge, in my humble opinion,
is Bioheat® heating oil.”
MEMA’s Ferrate said he is eager to hear how the renewed NORA program will work. “I’m especially excited about the focus on Bioheat® heating oil and equipment replacement and energy efficiency. Those are going to elevate much-needed customer products and services from our retail members.”
Julie Gill, Executive Director and CEO of the Oil Heat Institute of Rhode Island, said it’s never too early for NORA to focus on its getting a longer extension. “NORA’s leadership and John Huber, in particular, have done an excellent job in knowing what needs to be done for our industry. Since we only have a five-year window, we need to begin right away to get a longer extension. Hopefully, the stalemate we have seen in Congress will subside, and it won’t be as difficult going forward,” she said.