Over the past several months, there have been significant developments that may lead to big changes in the fuel that Oilheat consumer's use.  Since 1990, the oilheating industry has been discussing whether sulfur in the fuel should fall to 500 ppm.  Several dealers began selling the fuel and were very happy with the results, and much of the science indicated that the low sulfur fuel would save on maintenance and might empower higher efficiency units.  However, the price disparities between that fuel and the regular heating oil were too large, and the majority of the industry continued to use the higher sulfur fuel.  In recent years, the debate has expanded to cover biofuels.  Some states and localities are now considering mandates that the fuel have a bio component.

While the debate on sulfur has been active for decades, the debate has moved beyond our industry and it appears that governmental entities are preparing to close debate and reach a decision.  Leading environmental regulators are now poised to sign a consent agreement that would limit the sulfur in fuel to 500 ppm in 2012 in the region from Greater New York City to Delaware, including Philadelphia and New Jersey, and the remainder of the northeast in 2014.  These levels of sulfur would fall further to 15 ppm in 2016 in the first area and to 15 ppm in 2018 for the remainder of the northeast.  

At this point, concerns in the industry have been voiced over the cost of the new fuel.  Essentially, heating oil would revert back to being in the same pool as diesel.  This may save on logistics.  However, making the fuel costs more and generally the refinery yields fewer gallons, so it is likely to raise costs.  Whether those costs will be a few cents or several dimes will not be known for several years.

The heating oil industry has historically been very concerned with the price of the fuel sold to the consumers, and in many respects has built its value as being a low cost fuel, that also delivers great value.  However, over the years, the industry has also had to deal with fuel performance problems and have remedied many with better filtration and additives.  However, the fuel still contributes to fouling of the heat exchanger, and is probably less stable than diesel.  

So, as we contemplate a future of a lower sulfur fuel, we should be mindful of its advantages and ensure that our customers know that the fuel they are buying is an improvement.  As the sulfur falls, the heat exchanger will stay cleaner longer.  That means that the equipment will deliver more heat to the home, and will require less maintenance.  Additionally, it will lower heating oil’s environmental footprint.  All of these are benefits of the lower sulfur fuel. 

So as we assess these proposals from the environmental regulators we should know that the improved fuel will likely increase costs, but will also provide many benefits.

The continuing high prices of oil and the last two warm winters create a lot of frustration.  These may be the two most important factors affecting the strength of our industry.  Unfortunately, it is impossible for those of us at NORA to resolve either problem.  However, instead of being frustrated, we need to always look at the product that we have to offer.

One of NORA’s initiatives of last year was to expand outreach efforts on the internet. We were very pleased that the campaign was well received by the public. Hundreds of thousands of customers and potential customers have visited oilheatamerica.com.