Oil Dealers Seize the Moment to Assail Pro-Gas Policy

by John MacKenna

Connecticut’s independent marketers of Oilheat and Bioheat® Fuel have seen more than enough of Governor Dannel P. Malloy’s aggressive, pro-natural gas energy policy.

With new developments and information contradicting every purported advantage of natural gas, the oil dealers are heading to Hartford this month to tell their compelling story to state lawmakers.

The Connecticut Energy Marketers Association (CEMA) has scheduled a “March on Hartford” event February 18. Oilheat and Bioheat dealers and their employees will hold a rally and then will meet with individual legislators to discuss energy policy.

CEMA is looking to reverse the policy that Malloy initiated in October 2012. At a time when natural gas had a significant price advantage over Oilheat, the governor persuaded the state legislature to sign on to a policy of subsidizing natural gas expansion on ratepayers’ backs and converting 300,000 homes to natural gas heat.

Since then, there have been significant developments that have changed the outlooks for heating oil and natural gas.

• Heating oil prices have declined by about 44 percent. The U.S. Energy Information Administration reports that when Malloy was promoting his pro-natural gas policy in late 2012, Connecticut heating oil prices were averaging about $4.00 a gallon, compared to today’s average price of about $2.24. On a BTU-equivalent basis, Oilheat is once again very competitive with natural gas throughout Connecticut.
• Ultra low sulfur Bioheat Fuel is rapidly replacing heating oil as the industry standard. Connecticut has already cut the fuel’s maximum sulfur content by 83 percent and will switch to ultra low sulfur heating oil (15 parts per million sulfur) in 2018. Many Connecticut dealers are also moving to Bioheat blends.
• Biodiesel is getting great reviews as a petroleum alternative. The National Oilheat Research Alliance (NORA) recently concluded testing that showed that ultra low sulfur Bioheat blends have lower greenhouse gas emissions than natural gas with a blend level as low as 1.7 percent biodiesel. A recent report by the California’s Air Resources Board affirms that biodiesel reduces greenhouse gas emissions by at least 50 percent and often by as much as 81 percent versus petroleum. This gives biodiesel the best carbon score among all liquid fuels.
• Natural gas pipeline expansion is coming under increasing public scrutiny. A study commissioned by Massachusetts Attorney General Maura Healey revealed that the proposed pipelines are not the best solution to the region’s energy needs. Meanwhile, the Conservation Law Foundation and others are arguing that New Englanders would reduce energy costs in the long run by making better use of the existing liquefied natural gas infrastructure instead of paying billions to add new natural gas pipelines.

Armed with those powerful facts, CEMA members will try to help legislators understand that Malloy’s energy policy is harmful to Connecticut homeowners and businesses. “If the circumstances that exist today with prices and the cleanliness of heating oil had existed three years ago, would the state government have embraced Malloy’s natural gas policy?” asked CEMA President Christian A. Herb. “Probably not.”

The door opened for Malloy a few years ago when natural gas gained an unprecedented price advantage over heating oil. “That allowed for the first time in history for people who did not like oil to adopt an aggressive strategy to move people away from our product to utility fuel,” the CEMA executive explained. “Three years ago there was not much of a defense you could make with $4 oil versus $1.50 natural gas. It was not an enviable position with that price picture and with our fuel at 3,000-parts-per-million sulfur content. Now circumstances have changed, and we want to make sure policymakers are intimately aware of the misguided policy they adopted. This gives them an opportunity to rethink that plan.”

The Malloy administration is expected to roll out the second phase of its natural gas expansion plan in 2016, and CEMA wants to make sure the plan goals are not expanded and that new incentives are not added for pipeline expansion or fuel conversion in homes or businesses.

Herb believes his members can empower their legislators with excellent information. “We have reduced the sulfur in the fuel. Bioheat is a gift from heaven for emissions reduction. This really sets the stage for a reconsideration of our energy policy,” he said. “And now there is no price pressure. If customers criticize a legislator for backing off the natural gas expansion, they will have good data in hand to back them up. They can tell a citizen, ‘you already have a clean, affordable, reliable fuel in heating oil and Bioheat. It doesn’t make sense to invest ratepayers’ money for natural gas expansion in your neighborhood.’”

The February 18 event is inspired by the annual Petroleum Marketers Association of America Day on the Hill event. “When we have talked about Bioheat during Day on the Hill events, we have had great success changing the tone and focusing on positives,” Herb explained.

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