The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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MAY VOL.78 NO.05 Editor's Note EDITORIAL STAFF Editorial Office 1030 W. Higgins Road Suite 230 Park Ridge, IL 60068 847/720-5600 An Energy Company N 8 Keith Reid 847/720-5615 kreid@specialtyim.com Managing Editor Debra Reschke Schug 847/720-5618 dschug@specialtyim.com Columnists Keith Reid OCO Energy Corporation is celebrating its 80th year in business. From humble beginnings, it is currently a top-tier operation and one of the few that truly and fully lives up to the "energy" in its name. Diversification ranges from the full range of home heating and motor fuels to HVAC to convenience stores to real estate and environmental remediation. What's notable is that this process of diversification and expansion has been in place throughout its entire history. When opportunities arose that made sense, they were pursued. When the time came for the reassessment and rationalization of existing assets, that occurred. When the numbers didn't add up, tough business decisions were made devoid of sentimentality. As NOCO Executive Vice President Michael Newman noted, "I think diversification is critical. Obviously, in the energy business there is a lot of natural market correlation, but we try to be able to look at it as a continuum of risk. We have some things that are probably on the more risky side and some that are far less risky, and we try to make sure we balance ourselves across a number of them. If we have compression on our gasoline retail margins you can be assured that we have compression gasoline wholesale margins as well. So we try to put ourselves in the position that if any one thing happens, it would not kill us." Indeed. While NOCO has worked this model for much of its 80 years, the lesson is there for any operation today that comes across Editor opportunity. The industry is facing pressure, more so than at any point in recent years, but a time of challenge also creates opportunities for those in a position to take advantage of them. Some services, such as providing thirdparty residential and commercial gas and electric sales, might not be a fit for any but the most established operations with a strong back office capability. Operating convenience stores requires a specialized skill set that makes such a move far from "turnkey" for the typical heating fuels marketer or even a traditional motor fuels marketer, though that has been a traditional path. But, there is far more opportunity that is more mainstream. Homes and businesses heated with fuel oil will be around for many years to come. Opportunities exist to expand that business for those with the resources through acquisitions. Propane, while competitive, is also a business opportunity more alike than dissimilar to the heating oil marketer/dealer. Wholesale motor fuels distribution and commercial retail fueling have much overlap. This, of course, is far easier said than done. Financing, capital in general, costs, business disruptions, staffing concerns – there are obviously many, many challenges. But the operation focused solely on modest, but comfortable home heating oil deliveries will not find the challenges to that model decreasing. Even if natural gas prices go up (as they should, eventually) and oil prices go down (as they might, hopefully), the energy game is too volatile and dynamic to not consider an expanded business model. MAY 2013 | FUEL OIL NEWS | www.fueloilnews.com Charles Bursey, Sr. Shane Sweet George Lanthier List Rentals/ Reprints – Cheryl Naughton 678/292-6054 Fax: 360/294-6054 cnaughton@specialtyim.com PRODUCTION Production Director – Mary Jo Tomei Art Director – Brian Snook A d v ertisin g S ales East – Dave Campbell, Associate Publisher 413/528-2364 Fax: 413/528-8835 dcampbell@specialtyim.com Central & South Rich Alden 603/899-3010 Fax: 603/899-2343 ralden@specialtyim.com Barbara Reynolds 603/588-2086 breynolds@specialtyim.com West – Ken Jordan 972/540-2122 Fax: 972/540-2127 kjordan@specialtyim.com MAIN OFFICE 1030 W. Higgins Road Suite 230 Park Ridge, IL 60068 847/720-5600 • Fax: 847-720-5601 C ustomer S er v ice 845/856-2229 • Fax: 845/856-5822 Fuel Oil News P.O. Box 4290, Port Jervis, NJ 12771 Membership applied for 7/1/2010