Heating Oil That Outperforms Natural Gas

Report states GHG emissions are lower at blend level of 1.7 percent biodiesel

The National Oilheat Research Alliance recently compared the greenhouse gas (GHG) emissions from Bioheat® fuel and natural gas and reached some encouraging conclusions.

In its recent report to Congress entitled Developing a Renewable Biofuel Option for the Home Heating Sector, NORA concluded that Bioheat fuel blends using ultra low sulfur heating oil (ULSHO) can match or exceed the performance of natural gas in terms of reducing GHG emissions.

NORA’s study states that the greenhouse gas emissions from Bioheat are equivalent to the emissions from natural gas at one of three levels, depending on the measurement criteria that are applied. In the most favorable measurement from an Oilheat perspective, Bioheat GHG emissions are equivalent to natural gas GHG emissions at a blend level of 1.7 percent biodiesel, or slightly less than B2. For the other measures, the equivalent blend numbers are 13.7 percent and 14.6 percent biodiesel.

B20 Looks Good

These statistics are particularly encouraging in light of the recent decision by ASTM International to publish new grades of heating oil that include up to 20 percent biodiesel (B20). This means that heating oil marketers can immediately supply an ASTM-approved fuel that outperforms natural gas on GHG emissions. ASTM had previously endorsed only B5 heating oil blends.

The new report suggests that the heating oil industry is in a better position than previously assumed to compete with natural gas on environmental terms. In previous studies, NORA had estimated that a 12 percent blend (B12) was required for Bioheat to outperform natural gas on GHG emissions.

NORA identified the three GHG emissions equivalency points based on three different criteria of measurement. Bioheat containing 1.7 percent biodiesel offers equivalent GHG emissions when measuring the global warming potential (GWP) of the different fuels on a 20-year time horizon.

Climate change scientists generally use both a 20-year horizon and a 100-year horizon to assess the impact of emissions, and natural gas scores worse in the 20-year evaluation. That is because methane has a shorter lifespan in the atmosphere than carbon dioxide does, so measurements using the 20-year horizon give more weight to natural gas’s methane emissions.

When compared the fuels over a 100-year timeframe, NORA found that Bioheat GHG emissions at a 13.7 percent blend level (slightly less than B14) are equivalent to natural gas GHG emissions. That measurement does not account for the effects of indirect land use change, which is a measure of carbon emissions attributed to land-use changes relating to biofuel production. When a 100-year timeframe is used and indirect land use change is taken into account, Bioheat GHG emissions at a 14.6 percent blend level match natural gas GHG emissions.

NORA pointed out that the International Panel on Climate Change (IPCC) has corrected its GWP values to reflect new knowledge about the global warming effects of methane and added, “It is imperative that our policy decisions reflect this new knowledge.”

The Alliance also advocated for use of the 20-year timeframe for assessing climate threats instead of the 100-year timeframe. “Focusing on near term targets for GHG impacts is both an effective strategy and recommended policy, as it can have a more dramatic effect in the short term than reductions in carbon dioxide, thus providing more time to develop appropriate carbon dioxide reduction strategies,” NORA wrote. “This means shifting from the conventional 100-year atmospheric lifetime to atmospheric lifetime assessment methodology to a more focused 20-year atmospheric lifetime assessment. Using the IPCC Fourth Technical Report’s 20-year shows that a less than 2 percent biodiesel blend with ULSHO is equivalent to natural gas with respect to [CO2-equivalent] emissions.”

Positive Effects of ULSHO

NORA created the new report as required by Congress upon reauthorization of the Alliance in 2014. In addition to the data about Bioheat GHG emissions, the report describes the environmental benefits of reducing the sulfur content of heating oil. “One of the biggest transitions in heating oil has been the move to ultra-low sulfur heating oil,” NORA wrote. “This fuel lowers maintenance, improves efficiency and reduces pollution from heating systems. However, it is also paving the way for the next generation of equipment, which may mean lower cost materials and more compact boilers and furnaces.”

NORA’s testing showed that reducing the sulfur content in heating oil causes a reduction in fine particulate emissions. “ULSHO contains a maximum of 15 ppm sulfur, is generally deemed equivalent in CO, NOx, SO2 and PM2.5 emissions to natural gas,” the report states.

The report also points out that heating oil can increase its emissions advantage over natural gas by raising biodiesel blend levels in the future towards B100. “With future research and applications, increasing the biodiesel blend reduces GHG emissions even further,” the Alliance wrote. “Bioblends for heating oil are a clean responsible alternative to natural gas heating systems and perform admirably against all other heating systems.” The report further states, “Given that biodiesel blends with heating oil GHG emissions can easily be lower than natural gas GHG emissions, there is no climate change reason for fuel switching from oil to natural gas.”

NORA used methane emissions data from the U.S. Environmental Protection Agency in the report and noted that the EPA’s estimates are generally considered conservative and that other estimates have varied significantly. “There is significant research underway which could increase the impact of [CO2-equivalent emissions] of natural gas,” the Alliance wrote.

Easy on Consumers

The NORA report also addressed consumer costs for home heating, noting that Bioheat blends are compatible with heating oil equipment and did not cause any equipment problems in tests. “As the Alliance reviews higher blends of biodiesel in the future, it is anticipated that existing equipment will be able to use significant blends of biodiesel with either no modification or minor modifications that could be accomplished during annual maintenance and tune up normally performed on most home heating oil systems,” the report states.

“Further, the Alliance is working to ensure equipment manufactured is designed for and can use higher blends without modification. As that equipment enters the field, it is likely that most consumers of heating oil will incur only minor additional costs for retrofitting their appliance prior to using biodiesel. This provides the oilheating industry a unique opportunity to transition their customers to a renewable fuel with minimal costs to the industry and its consumers.”

The report also took note of prices for oil and biodiesel. “With regards to pricing, the Alliance has limited information on the pricing of biodiesel versus conventional heating oil. However, the Alliance does receive periodic pricing reports from a supplier in Pennsylvania. In the last year, the price differential between heating oil and biodiesel has generally ranged between 5 and 13 cents per gallon for a B-20 gallon, although in many instances [Renewable Fuel Standard 2] credits or other state incentives allows biodiesel to be priced similar to or lower. If one assumes a 5 to 13 cent differential, the cost of using a B-20 gallon today in a home using 700 gallons per year would be between $35 and $91.”

The NORA report concludes with a discussion of the transition to renewable energy sources. “The biodiesel fuel and the move to renewable fuels present exciting opportunities for the heating oil industry and its consumers. First, such a transition to renewable fuels will be made with minimal capital costs by consumers. Thus, a significant barrier to the use of renewables will be avoided, as the industry transitions its customers to renewable fuel with no required or minimal upfront costs by consumers.

“Second, it provides an exciting opportunity for the local oilheat retailers to continue to serve their customers into the future, which will allow these companies to provide employment for individuals in service, marketing, and management in local communities.

“This transition to a renewable fuel also provides an opportunity to examine the relationship to competing fuels. As noted in the report, heating oil has continued to take steps to reduce its emissions profile and the recent reduction in sulfur in fuel is a significant step forward, and puts emissions of criteria pollutants on par with natural gas.

“Second, as the report noted, a close examination of greenhouse gases indicates in the short term, a transition to low levels of biodiesel in heating oil may be the most effective method to reduce greenhouse gas emissions, and a movement to natural gas may be far less effective.”

To download the full report, visit NoraWeb.org.

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