www.fueloilnews.com | FUEL OIL NEWS | JUNE 2015 15
FUELS
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Drivers also care about their vehicles. Biodiesel has a higher
cetane number than petroleum diesel and superior lubricity
while providing similar horsepower, torque and fuel mileage.
Bioheat blended fuel users are already aware of how biodiesel's
lubricity reduces friction and wear in their heating equipment.
They also know that biodiesel, when stored and handled prop-
erly, works fine in harsh Northeast winters, where heating oil
use is most prevalent.
Also, the heating oil offseason coincides with the time of
year biodiesel has an economic advantage over No. 2 ULSD.
Retail outlets that offer biodiesel blends at the pump often
increase their blend level—for example, they'll go from B5 to
B20—in the summer because certain cold-weather steps aren't
necessary. When biodiesel is less expensive than No. 2 ULSD,
increasing blend levels helps increase margins.
Finally, even bigger savings can be had in states with eco-
nomic incentives, often in the form of tax incentives, tied to
selling biodiesel. Additionally, some states and communities
call for the use of biodiesel blends with on-road diesel or with
heating oil. Pennsylvania, for example, requires a B2 blend in
on-road diesel. New York City requires a B2 blend of heating
oil, and the New York state assembly has considered a state-
wide biodiesel blended heating fuel incentive.
Heating oil companies that operate in jurisdictions that
incentivize or dictate biodiesel use will have the experience
and the infrastructure that will make it easier to expand into
offering biodiesel as a transportation fuel.
GET STARTED
This isn't to say there are no barriers to heating oil companies
that want to get into summer blending of transportation fuel.
One constraint in the Northeast is less-than-ideal terminal
positions, according to Knox. Also, there are some players in
the heating oil market that are already established in supplying
on-road fuel.
Knox suggests that companies that want to get into the bio-
diesel market start by making sure they have the right infrastruc-
ture, including storage tanks, and are knowledgeable about proper
handling. The good news, he said, is they are already experienced
with handling fuel of various types. And some states offer financial
assistance for biodiesel-related infrastructure improvements.
"There's an economic and monetary improvement that you
can realize by selling biodiesel blends in the summer provided
that you have the hardware to handle it," Knox said. "This is
where the industry is going. Do you want to fight it, or do you
want to embrace it and be a leader?"
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