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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DECEMBER VOL.78 NO.12 Editor's Note EDITORIAL STAFF Editorial Office 1030 W. Higgins Road Suite 230 Park Ridge, IL 60068 847/720-5600 Editor W Keith Reid A Hopeful Holiday e have two interesting stories in the magazine this month that provide a compelling overview of the industry today. First, we have coverage of the moves underway in Connecticut and New York to expand gas pipelines and gas service to commercial and residential customers. While the New York initiative is still undecided, the good news in Connecticut is that conversions will not be subsidized. In fact, current gas customers as well as future customers will pay an additional rate depending upon their specific circumstances relative to the connectivity to a gas line that can be as high as 50 percent additional cost down to 10-30 percent for a residential customer. Potential customers will also have to pay for their new heating appliances with any switch. This represents a notable increase in cost. However, even with these additional costs, until a significant downward adjustment is made in the price of crude oil based refined products along with a subsequent dramatic increase in the price of natural gas, the home heating fuels industry has to remain vigilant and work harder than ever to keep their customers happy and in-the-fold. Additionally, we have a profile on Daigle Oil, a company that has become very successful by providing a diversified mix of business operations with a strong central heating oil focus. Daigle did not necessarily take on this diversification because of the natural gas threat, but because it operates in a sparsely populated area where successful growth almost demands diversification. The company does everything from motor fuels and convenience stores to propane, oil and wood pellets. As expected, HVAC installation and service is a notable part of the mix. In the face of all the industry's challenges, as we enter this holiday season it's a good time to reflect on the positives. First among those should be the camaraderie of an industry of peers that often resembles friends and family more than acquaintances and competitors. Remember that the industry's companies 8 doing business today - hopefully yours included - are proactive, efficient, competent and aggressive. For companies that have been around since the dawn of the industry, most of them began facing challenges with the shift from coal or ice delivery to heating oil. That transition was rapid and possibly far more disruptive than the challenges the industry faces today. And yet, life went on, the companies grew and prospered. Even with the pressure from natural gas and high, volatile oil prices, homes and businesses will likely still be kept warm in the winter by heating oil for many, many years. Fortunately, for large parts of the Northeast and Mid-Atlantic even the most aggressive natural gas pipeline initiatives will likely not result in a natural gas line being run to every home or business any more than in the rural areas elsewhere. For heating oil dealers and marketers in those areas, business planning decisions will tend to be proactive relative to such things as diversification. And with the price differential between propane and heating oil being minor compared to natural gas (today), there will remain more opportunities to be a traditional fuel oil dealer or a diversified home heating fuels dealer. For the heating oil dealer serving a more urbanized area, it would be an insult to try and downplay current and future challenges. But even there, the nature of the heating oil industry offers some significant advantages even with a more reactive push toward diversification. A denser market means more opportunities for any new venture that is adopted. Homes may be "lost" to natural gas (and others saved through efficient modern heating appliances), but heating oil dealers should have a leg up on existing competitors who lack the long-standing customer relationships our industry possesses. Companies in our industry that have listened and been responsive to their customers - year after year keeping them warm and comfortable - will be able to leverage that competency and trust among those customers in whatever the future may bring. l F O N DECEMBER 2013 | FUEL OIL NEWS | www.fueloilnews.com Keith Reid 847/720-5615 kreid@specialtyim.com Managing Editor Debra Reschke Schug 847/720-5618 dschug@specialtyim.com Columnists Charles Bursey, Sr. Shane Sweet George Lanthier List Rentals/ Reprints – Cheryl Naughton 678/292-6054 Fax: 360/294-6054 cnaughton@specialtyim.com PRODUCTION Production Manager – Karen Kalinyak 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