With This Message, We Can Win

May2016_ManMountain

By Richard Rutigliano, PriMedia, Inc.

It’s time for Oilheat to make some noise.

The tables have turned dramatically in the Oilheat vs. natural gas debate, and last month’s news that Kinder Morgan is walking away from the Northeast Energy Direct natural gas pipeline only strengthens Oilheat’s position.

Our industry has a much-needed opening to gain favorable treatment from policymakers and put an end to government-assisted poaching by the natural gas industry. With the Sempra/National Grid/Eversource partnership still petitioning the Federal Energy Regulatory Committee (FERC) for their Access Northeast pipeline plan, we need to strike while the iron is hot.

The Connecticut Energy Marketers Association recently demonstrated how Oilheat can leverage its message advantage. CEMA wanted to thwart Gov. Dannel P. Malloy’s ambitions to increase state support for natural gas expansion, so members staged the “March on Hartford” lobbying event in February. CEMA scheduled meetings with more than 100 state legislators and dispatched representatives of member companies to educate their local representatives about Bioheat® fuel. The fate of Malloy’s policy ambitions in unknown, but there are signs that CEMA members are succeeding in swaying state energy policy.

Oilheat is now positioned to dominate the heating-fuel debate with an outstanding set of talking points. Not only can Oilheat outperform natural gas on greenhouse gas (GHG) emissions, but it also has the potential to displace more fossil fuels with clean-burning biodiesel – without government-sponsored investments in new heating equipment. Now is the time to forge allegiances with some once-unlikely bedfellows and make the case that heating with oil is – yes – good for the environment.

Let’s take a close look at the key pillars of the pro-Oilheat argument in 2016.

1. Pollution Reduction. Policymakers who want to reduce greenhouse gas emissions and air pollution have a friend in heating oil. Our fuel offers a clear, existing path for emissions reduction through increased biodiesel blending. In this, we have a pronounced advantage over natural gas.
The facts speak for themselves:

• Parity on emissions is at hand with the combination of ultra low sulfur heating oil and biodiesel. NORA determined in 2015 that Bioheat® fuel’s GHG emissions are equivalent to natural gas at a blend level of just 1.7 percent biodiesel, or slightly less than B2. Once the last major heating oil states switch to 15ppm sulfur (ultra low) on July 1, 2018, all heating oil that contains at least 2 percent bio will burn cleaner than natural gas.

• Greenhouse gas emissions decrease as the biodiesel blend level increases, and ASTM has already approved a specification for B20 heating oil. While some manufacturers contend that equipment modifications are needed to accommodate higher blends, B20 heating oil is an approved specification, and our industry is positioned to deliver it on a widespread basis. This is a tremendous advantage that we need to leverage with policymakers. Biodiesel blending has the endorsement of the nation’s strictest standard setters – the California Air Resources Board. CARB studied petroleum alternatives in 2015 and found that biodiesel reduces greenhouse gas emissions by at least 50 percent and often by as much as 81 percent versus petroleum. And here sits the heating oil industry in the Northeast, perfectly positioned to displace fossil fuels with biodiesel.

B20 is not the endpoint, either. NORA and the National Biodiesel Board are working to push blend levels, and it is perfectly feasible that a home heated with oil today could be heating with B50, B80 or B100 within a few years – with basically the same equipment.

Any notion of converting heating oil homes to natural gas heat for environmental reasons is utter madness at this stage. It is Oilheat that has the emissions reduction solution, not the methane industry. The New York Oil Heating Association saw the light on emissions back in 2011 and worked with city and state officials to transform heating oil to 15ppm sulfur and 2 percent biodiesel. Now NYOHA is a partner to environmentally minded city officials, working with them to achieve clean air goals.

Meanwhile, public officials in New England keep trying to squeeze out heating oil in the name of GHG reductions, and heating oil companies suffer customer losses as a result. It is time to wield the truth and root out the institutional ignorance that is damaging the excellent local companies that deliver heating oil. Natural gas has used its superior financial resources effectively for years to make the most of its advantages in emissions and commodity costs. Now those advantages have waned, and it is time to follow the lead of NYOHA and CEMA and leverage our strengths to the advantage of Oilheat.

2. Reduced Investment in the Home. Government entities at all levels are under tremendous financial strain, and officials are always vowing to protect the middle class from tax increases. And yet somehow public officials and politicians continue to float illogical plans to convert heating oil homes to natural gas on the backs of taxpayers and/or ratepayers. There is only one explanation: The natural gas industry has succeeded in persuading politicians that natural gas is a better choice, and those politicians are using their policy and budgetary powers to execute a pro-natural gas agenda.

As we drive home positive messaging about Oilheat’s environmental advantages, let’s also advocate for taxpayers and ratepayers and work to stomp out government-supported fuel conversion once and for all. New England Fuel Institute and NORA have already taken up this fight at the national level, where they successfully challenged President Obama’s attempt to use LIHEAP funding for fuel conversion. Presidential candidate Hillary Clinton recently published her own proposed energy policy that also called for subsidized residential fuel conversions, and NEFI and other associations immediately reached out to her campaign with a challenge.

When NEFI engaged the U.S. Department of Health and Human Services on the use of LIHEAP money for fuel conversions last year, the Department of Energy weighed in and asserted that there is no economic benefit to fuel switching and that the money earmarked for fuel switching is better spent on weatherization.

Millions of Americans have oil-fired heating equipment in place. The soundest plan is to continue using that equipment and to support future upgrades to reduce energy consumption and emissions. NORA is investing millions of dollars each year to develop new equipment that will improve heating efficiency and facilitate a transition to higher biodiesel blending. This is the correct path forward for Oilheat homes.

Given heating oil’s advantages, our industry can make a strong case against the leveraging of taxpayer and ratepayer money to promote fuel conversion. Let’s make this a core plank in the policy agenda we promote and push it hard. Fuel conversion is a fool’s errand, and it’s time to bring that message to policymakers in force.

3. Fabric of the Community. Heating oil companies play vital roles in our communities: delivering fuel, servicing and installing equipment, responding quickly to heat emergencies, and providing expert advice. They provide good jobs.  They pay property taxes. They support local charities and organizations.

In these challenging economic times, heating oil companies are as valuable as they have ever been to their communities. Policymakers everywhere appreciate the value of local businesses, and our industry can strengthen critical allegiances by reminding officials of Oilheat’s community benefits. It is time for all government entities to abandon any and all policies that harm Oilheat companies.

4. Reduced Infrastructure Investment. During those difficult years when commodity prices were giving natural gas a strong advantage, there was little hope that Oilheat could recruit the allies it needed to halt the runaway natural gas train. But times have changed, and as the Kinder Morgan decision shows, there are opportunities to thwart natural gas expansion plans.

The natural gas industry has spent millions on lobbying to convince policymakers and politicians that the Northeast region needs more pipeline capacity to meet its energy needs. Kinder Morgan’s failing aside, pipeline developers have done a remarkable job of securing government support for their plans to build new pipelines with the financial support of ratepayers. Several states have signed on to add billions of dollars to ratepayers’ utility bills for years to come to help pay for these pipelines.

But as one disturbing development has followed another, influential government officials have begun standing up to challenge the pipeline developers. These include New York Gov. Andrew Cuomo; U.S. Sens. Chuck Schumer, Kirsten Gillibrand, Edward Markey and Elizabeth Warren; and Massachusetts Attorney General Maura Healey. Even Republican Massachusetts Gov. Charlie Baker is hinting that the pipelines might not be the right solution.

As the American Energy Coalition has documented in its weekly news alerts, two important anti-pipeline arguments are gaining traction. The first is the notion that the region does not, in fact, need more pipelines, because renewable energy supplies from wind and solar are likely to increase. Healey and others are now arguing that ratepayers could get stuck paying for pipelines that could be severely underutilized. It is a fairly esoteric argument, but powerful nonetheless.

The second argument is more visceral, with the potential to drive policymakers of all stripes into the anti-pipeline camp. It is the notion that the natural gas pipelines – which developers tout as regional solutions – are actually intended to support natural gas exports. Markey and others have pointed out that it is not the region’s consumers and businesses that stand to gain but, in fact, the natural gas producers. The real goal, they say, is to link the natural gas fields in Pennsylvania to an LNG export facility in Canada to support natural gas exports. If policymakers come to believe that they have been duped into authorizing ratepayer subsidies to support a for-profit export project, support for pipeline expansion could dry up overnight.
The Oilheat industry can be a positive voice in this debate. If New England is to forego the pipelines, the region must manage its natural gas demand to make best use of the available capacity. As we promote the emissions-reduction potential of Oilheat and Bioheat, let’s also promote the idea that maintaining and even expanding Oilheat market share is a regional benefit.

We don’t have to stir up opposition to natural gas; rather, we need to aggressively promote the long-term benefits of Oilheat and help policymakers see that anti-Oilheat policies are destructive; pro-natural gas policies are counterproductive; and that fuel neutrality is truly the only tenable policy position.

Industry leaders at NEFI, CEMA and the Massachusetts Energy Marketers Association are already cooperating with an LNG importer (GDF Suez) and a prominent environmental advocacy group (the Conservation Law Foundation) on these issues. Let’s continue forging new allegiances. Our clean, flexible, portable fuel is the perfect solution for many Northeast homes and businesses, and we can help influential people see that.

Now that the case for Oilheat is so strong, it’s time for the entire industry to embrace the positive message, show some chutzpah, and leverage our considerable grassroots strength. I encourage our industry associations to ramp up their lobbying efforts while also building public support with robust public relations and advertising campaigns.

Oilheat needs to “come off the ropes” and start throwing punches.

To discuss ways you can help spread the Oilheat message, please give me a call at 800-796-3342 or email me at rrutigliano@primediany.com.

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