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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DATELINE BUDGET DEAL A MIXED BAG A compromise was reached in the current struggle to fund the government for the remainder of 2011 fiscal year in a deal that pleases few. House lawmakers passed the 2011 funding bill by a vote of 260 to 167. While President Obama called the com- promise “…the largest annual spending cut in our history,” conservatives note the $38.5 billion in cuts is far lower than what the Republicans promised coming out of the recent elections and that the reality of the true cuts might be measured more in the hundreds of millions of dollars rather than billions. Progressives are displeased that any cuts were made at all even though they are practically insignificant compared to a budget of nearly $4 trillion. The news is mixed for the industry as well. The Low Income Home Energy Assistance Program receives $4.71 bil- lion in funding which is $390 million less than FY 10. However, it maintains the base formula grant to states at last year’s level of $4.51 billion. One issue of concern was cuts to fund- ing for the Commodity Futures Trading Commission. The industry won a sig- nificant victory in the Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on July 21, 2010. Relentless pressure from the financial and investment community has stalled the necessary rulemaking pro- cess to make the goals of the law a reality. Cuts in funding would hamper the CFTC in its mission and endanger the success of the law. The current budget actually increases funding by $34 million. This reflects, in part, the hard work of the New England Fuel Institute and the Petroleum Marketers Association of America and their members. Similar struggles are expected in the upcoming budget debates for 2012 not only for these programs, but biofuel subsidies as well and virtually any- thing that receives a federal dollar. ARTICLE STIRS CONTROVERSY In March a Fuel Oil News article “Ultra- Low Sulfur Fuel; Oil Effects” noted in an interview with John E. Batey, technical director for the Oilheat Manufacturers FEATURED NEWS Budget deal a mixed bag Article stirs controversy NEFI selects new president Formation of the Angus Advisory & Finance Group AEC chooses Tubman to lead Care to Ride event Aeroflo announces corporate name change Association that some preliminary research being conducted for the New York State Research and Development Authority had shown some potential issues with the longevity of conventional nitrile seals. Fuel Oil News has clearly and strongly supported the move to ULS-bio- fuel blends in the industry for a variety of political, marketing and operational rea- sons. However, to avoid potential industry liability and reputation issues the product must be turn-key in nature. Dr. Thomas Butcher, head of the Energy Conversion Group, Brookhaven National Laboratory; John Huber, pres- ident of the National Oilheat Research Alliance and Robert Hedden, executive director of the Oilheat Manufacturers Association, requested the opportunity to provide some additional input on the sub- ject with the following letter to the editor: Last month, Fuel Oil News published an article on the introduction of ultra low sulfur diesel and biodiesel in heating oil equipment. There were a number of con- cerns raised regarding the suitability of those fuels in heating oil that we felt should be discussed further. First, the heating oil that we are sell- ing today is far different from the heating oil sold 50 years ago. The refineries have changed their processing of the fuel, the sources of crude oil have changed, and even the sulfur level of “standard” heating oil is half of what it was twenty years ago. The product that this industry sells has always been changing, and no doubt sometimes the changes improve the performance, and unfortunately other changes create problems for us. Regardless, we have to work hard to make sure our equipment performs and accommodates the fuel that is sold to us. Second, the changes to the fuel discussed in the article will improve the product sold to customers. A low sulfur fuel will eliminate the need for cleaning the heat exchanger in most circumstances. It will also reduce the sulfur-related corrosion that occurs in the appliance, and the chim- ney. As discussed in the recent article, it will also improve the environmental char- acteristics of the fuel and make us as clean as natural gas. Additionally, the industry is now selling an expensive fuel because of its ties to the Mideast; biodiesel is our best opportunity to have a long term future heating America’s homes. It is manufactured in America; it is renewable and releases only a frac- tion of the greenhouse gases of heating oil. It is the best way for us to move forward, and compete with natural gas, propane and electricity. For this reason, most of the industry supports moving to a cleaner low sulfur fuel and having biodiesel in it. I would also like to point out that the article does not adequately cover the suc- cessful field study of pumps on Long Island, and that the owner of this company is very supportive of moving to ULSD. It is my understanding that in this study 100 homes used ULSD 2 years, and that all but one home completed the test, and the home that failed had a very old burner. Additionally, that thousands of heating oil customers are currently using ULSD in several states in the Midwest, and have been using this product for three years. The service manager for the largest heat- ing oil company in Wisconsin indicated they have used ULSD for three years with- out incident. Similarly, many countries in Europe currently use a very low sulfur fuel. Europe adopted a low sulfur fuel for on-road use in 2005 which is a 50 ppm standard. The www.fueloilnews.com | FUEL OIL NEWS | MAY 2011 3