By Paul Nazzaro, President, AFS
The Situation
No matter what your position in the heating oil industry (or on this issue), it’s time to stop questioning the impact of your customer base on climate change and start considering the flip side of the equation. What is the impact of climate change on your customer base? Your response to the former question is nobody’s business. Your response to the latter is the business of every industry stakeholder and colleague you know.
Say what you will about the planet, there’s simply no denying that the climate of our industry is changing. As petroleum industry lawyer Mark Barron told a room full of energy executives at an Independent Petroleum Association of America (IPAA) meeting this summer, “It doesn’t matter whether [manmade global warming is] real, or not real, or what the issues are. That ship has sailed from a political perspective.”
The inconvenient truth that Barron concedes here is that carbon-intensive fuels have fallen out of favor in the eyes of voters, and legislators are taking notice. And not just on the left. A slew of bi-partisan carbon bills have been introduced in the House and Senate in recent months. In July, a national survey found that more than two-thirds of millennial GOP voters believe the Republican Party needs to do more to address climate change. Does this mean that they all subscribe to the idea that climate change is manmade? Of course not. They’re simply looking out for the welfare of their party, because, increasingly, it appears that voters do.
My point is, when it comes to carbon-intensive fuels, the ship has sailed from a business perspective as well (just exchange the word “customer” for “voter” in the paragraph above). Even without carbon taxation, traditional heating oil has become less and less marketable every season. Yet, despite all of the factors conspiring to erode heating oil gallons, I still see the tank as half full. The good news is that our ship hasn’t yet disappeared on the horizon. With all hands on deck, we can turn this thing around.
The Strategy
An interesting fact worth noting is that ships don’t technically turn around; they rotate at the center. You should be encouraged, as I certainly am, that the trade associations at the center of our industry have unified around a strategy for a 180-degree shift in how we buy, sell, and market liquid heating fuels in the future.
In June, the New England Fuel Institute (NEFI) resolved to henceforth refer to the heating oil industry as the “renewable liquid heating fuels industry.” Some four months later, at the Northeast Industry Summit held during the 2019 HEAT Show, more than 300 industry leaders from New England and New York voted unanimously to achieve net-zero carbon dioxide emissions by 2050. The course our leaders have charted seems simple on paper: achieve a 15% reduction in greenhouse gas emissions by 2023, a 40% reduction by 2030, and net-zero emissions by 2050. But make no mistake: Until ever retailer, wholesaler, equipment manufacturer, and technician start pulling in the same direction, we’re still all drifting aimlessly out to sea.
The Solution
In 2003, when I first uttered the term “Bioheat” in the basement of my home, where I started my business, the concept had nothing to do with carbon taxation or climate change. I helped conceive and bring to market this unique product because I felt that it was a better, more marketable heating fuel for our industry. When sourced, blended, and stored responsibly, that initial theory has been validated countless times over—most recently by Brookhaven National Laboratory’s report, B20 to B100 as Heating Fuels.
While there are some exciting renewable liquid heating fuels potentially on the horizon (i.e. renewable diesel and ethyl levulinate), at the moment, there is absolutely nothing that can compete with Bioheat’s performance, equipment compatibility, accessibility, or its impact on advancing our industry into the future. I sincerely hope for increased supply of renewable diesel in the Northeast, and I’ll be rooting for ethyl levulinate to achieve commercial viability. But the industry can’t wait for either of these scenarios to materialize. We need to act today.
To that end, I would encourage every fuel dealer to collaborate with their respective leadership groups and upstream suppliers on how to achieve a seamless transition to higher biodiesel blends over the coming heating season. And don’t forget to include your customers in the conversation. The new consumer website, www.mybioheat.com, has a wealth of information and resources you can use to educate them on the sea change happening in our industry. As we collectively hoist a new flag and work to change our course through unforgiving seas, it’s vital that our valued passengers don’t jump ship during the process.