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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www.fueloilnews.com | FUEL OIL NEWS | MAY 2014 21 tomers need it? What we are finding is that this is impacting the distribution infrastructure that affects almost every fuel and refined product. Pipelines that historically, from the moment they were built, transported product from the Gulf coast to the Midwest and the Northeast are being reversed to ship other product toward the Gulf Coast to be exported. We have one pipeline that comes from Canada that supplies the Midwest and that line was down for three weeks this year, in the heating season I might add, but in the summer that line will be totally reversed to carry a different product back up into Canada. You can see how transformative those changes to our distribution infrastructure are becoming. We need to study them, catalog them and figure out what we can change because it is an infrastructure that has reliably serve its customers for decades, and we need to make sure that it can continue serving those customers. If you look at the domestic price of pro- pane versus the international price propane it didn't really argue that you should have many imports, and we have import termi- nals in both Florida and the Northeast. For several years we haven't had any product going into those terminals, so what happens when you try to make up that lost product? You are either going to truck it or use rail. So when you take the volume that comes in from an offshore terminal and now you put it into trucks and you put it into railcars — it puts added stress of those aspects of deliver- ability. That's another area that needs to be studied, and we have a high-level task force looking into that right now. FON: NPGA was out in front in a very public way on most of these issues, but you must be happy the heating season is coming to a close. Roldan: As we finished out the heating season things have been stabilized. Although things are still tight, we've been meeting customer demand, and the cold weather has continued longer than expected. But, you can't control the weather, as I stated earlier. If you look at the waterborne imports, the market tended to correct when there was a situation of pretty severe stress. But you have to realize that in our industry when the market corrects it takes several weeks — up to 20 days — for that product to get where it needs to go. FON:What have been some of the spe- cifics with the Northeast? Roldan: As an industry we are look- ing at things we can do to strengthen reli- ability, and one of those things is to invest in additional storage. We have a company in our industry that has invested millions of dollars putting in 88 million gallons of underground storage in the Finger Lakes region of New York. This involves technology we have used in our industry for very long time that is safe, reliable and all we need is for the governor of New York to say go ahead and put it in. If that 88 million gallons of storage had been in place this year we would not have seen the stress on our southeastern artery or in the Midwest at the levels we saw. So, we have to go back and address those issues of siting and policies that can at the federal, state and local level discourage storage. We need to rethink those. After you've gone through winter like this, reli- ability is the main thing focus. Obviously we wouldn't do anything that is not safe or environmentally sound. FON: These new challenges aside, are there some more conventional issues NPGA is working on right now? Roldan: We share one thing with the different energy industries in that we are totally focused on growth. Fuel effi- ciency is a good thing and we are for that, but it means that you have to make up for fuel efficiency with new markets. The best thing our industry can do to make sure that the economic incentives exist for our delivery infrastructure to grow and become more reliable is to build year- round demand. We are trying to make the By Keith Reid Fuels