By Steve McCracken, President, AMERIgreen Energy
The days of representing yourself as only an “oil company” are over. You are the energy company that will thrive as your customers’ children and grandchildren buy houses and take over the market. You will grow with the new generation. The only question is … How?
One approach to this question that has worked for the distributors we’ve worked with is biodiesel. When I started in this business eight years ago, biodiesel distribution was becoming customary. Distribution has expanded substantially in the past 10 years, making blending and marketing biodiesel a reality for many distributors.
While biodiesel isn’t new, its benefits are still new to many. There are obvious performance, domestic, and environmental benefits, as well as intangible benefits that are not widely known. Steve Oehlert, owner of Oehlert Bros, Inc., near Philadelphia, is a passionate and daring marketer of biodiesel who has been distributing blends up to B20 for several years. Oehlert moved to biodiesel nearly 10 years ago. “It positioned us to gain a new relationship with our customers and the market,” he said. “I wanted to deliver the latest energy technology to my customers. I believe it represents the progressive nature of our business and we’ve been able to capitalize on that.”
I am not suggesting you redesign your company’s logo or color scheme, but make no mistake: Biodiesel will play a pivotal role in our industry’s future. Your ability to embrace that will improve your chances to grow your business. NORA (National Oilheat Research Alliance) is back and spreading the word about using B20 and higher blends. The ASTM is balloting 20 percent biodiesel in the specification for heating oil. There is a renewed excitement in our industry.
Biodiesel was used primarily in low blends until recently. The bad rap against it said, “It was too expensive,” when actually a B5 blend costs a penny or two more than conventional heating oil. I don’t mean to demean the pricing difference—a lot can be made in those few cents—but I want to be clear about the difference.
It is conversions and discounters that are still the most glaring threats to our customer base. Biodiesel will not cure conversions or eliminate one-truck operators from driving around with a discounted price on their truck. Biodiesel will give you a foundation for addressing those threats.
“When the economics were not favorable, a 5 percent blend achieved the performance and marketing benefits to tell the story about this fuel,” says Steve Oehlert. His perspective on moving from B5 to B20 blends is, “Now that there is a benefit, we can take an opportunity to distribute a better product to the market at a discount to conventional heating oil competitors.”
Traditionally fuel dealers are apprehensive about scaling up to B20 due to rumored service-related issues – or more specially, the fear of them. The fact is, when you are using Biodiesel that passes the latest ASTM specification and comes from a reputable supplier – you have the basis for confidence in the blends you are distributing. Of course standard operating practices and winter treatments still apply.
Promoting higher blends of biodiesel, up to B20, gives us an opportunity to promote the cleanest heating fuel. B20 ultra low sulfur heating oil (ULSHO) burns cleaner than natural gas. Many companies have reported significantly less maintenance for heating systems that would usually require more work during annual cleanings. These are real and direct benefits that will support the service side of your business, provide something to promote to your customers, and make your service contracts more profitable.
Biodiesel is a powerful, dynamic, strategic tool. It seems odd to classify a fuel that way. But it is.
My initial introduction to biodiesel was as a retail fuel distributor. When we made the switch to biodiesel we didn’t have an overly scientific method for testing functionality. After using B5 for a month, trucks seemed to get just as good if not better mileage, and drivers reported smoother engine mileage and less emission smell. The resounding difference was that the employees believed in biodiesel’s performance.
Employees began talking with each other and with customers about these changes. The employees became promoters of the fuel – technicians reported cleaner equipment parts, and drivers shared their mileage stories. We marketed the new fuel and its direct benefits, and soon the dialogue on the phone changed from discussions about price to ones about energy and comfort solutions. It provided the opportunity to promote the principles of what lead us to Bioheat® fuel and how those same principles are present in our other programs like payment and service plans. Best of all, customers believe it and trust us, because we believe it to be the best solution for them.
The new fuel that started off with an honest level of skepticism provided a foundation for discussion inside, then outside the company. The conversation changed the way customers responded to us and the way we looked at ourselves. Biodiesel will not change your business. It’s your job to do that. It will give you an opportunity to look at your business differently and progressively promote your business for the next generations of energy customers.
Consider making the first step to using a blend of biodiesel, and then make the plan to help it grow your business.