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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32 OCTOBER 2014 FUEL OIL NEWS | www.fueloilnews.com Bio: Shane Sweet is an energy and management consultant with clients in the heating oil, propane and motor fuel sec- tors and is a partner with the firm of Lake Rudd & Company. He served the industry as president & CEO of the New England Fuel Institute "NEFI" from 2007 to 2011, and as EVP/director and lobbyist for the Vermont Fuel Dealers Association "VFDA" from 1993 to 2007. CoNTACT: He lives in Shaftsbury, Vt., and may be reached at shanemsweet@gmail.com or 802-558-6101 cell/text. Suggestions by readers for future column content, as well as general comments, are welcome. http://www.linkedin.com/ pub/shane-sweet/7/a52/701 Shane Sweet OPERATIONAL INSIGHT A friend of mine is fond of saying: "Repetition is learning." He says if you say something often enough it starts to sink in (even if it is not true). For decades the natural gas lobby has spent vast sums of [ratepayer] money trying to convince any- one who will listen that natural gas has been, is and will be the best thing since sliced bread. Given my roots in the retail fuel industry, I always thought of natural gas in terms of heating homes and buildings. Power generation was an obscure use of the fuel as far as I was concerned. I did not concern myself with power generation, because, in general, the retail energy people like me did not sell fuel for firm power generation. Way Back When, the bias of regulators, envi- ronmentalists and policy wonks in favor of nat gas was by comparison, subtle, unspoken and when complained of out loud—vehemently denied. Nowadays, the bias is palpable, like a taste in the back of your throat that you cannot get rid of. Back then I was thinking heat, not power, but as I worried about getting oil, propane and kerosene to boilers and furnace and space heaters the rush to nat gas for power generation had, no pun intended, exploded. In New England it grew from less than 30% in 2001 to over 50% today. Today, the combination of energy efficiency (conservation) and distributed resources (grid- connected generation) show New England electricity demand as essentially flat. It is projected to grow only about 0.1% annually. The experts that live the day-in-day-out busi- ness of making power supply a seamless effort are saying there's a real problem with growing nat gas demand for power. The competition for nat gas between nat gas power plants and local nat gas utilities has resulted in users paying premium prices for nat gas. Not enough pipelines = not enough nat gas for power generation = higher nat gas prices. Houston, we have a problem. Despite the situation, politicians, environmental- ists, regulators and bureaucrats continue to extol the virtues of natural gas. Whether they are oblivious to the infrastructure problem, ideologically predis- posed to the public policy mandate of the utilities or something else—what is done is done. A clear case of oversold and under-delivered. As power generators seek to retire older and less efficient plants, the regional electricity organization reports that the power "generation queue" is still more than 60% natural gas-fired: DOUBLE that of 2001. So, the electricity people, I suppose you could say, are counting on new distributed resources to be there to save the day when and if the nat gas pipeline people cannot get nat gas to the half dozen new nat gas plants set to be built in New England in the next few years. Generally, distributed resources in this context mean large solar and wind installa- tions that will push big blocks of electrons to the grid, and not the small homeowner or small busi- ness wind or solar installations that some readers are already providing their customers. By the way, the FOUR new plants in process are biomass, wind, solar and natural gas. No oil, no propane. The capacity of the SIX plants coming off line is much larger than what is coming on line. Building pipelines, while politically acceptable and in furtherance of so called "public necessity," are major projects that require a lengthy, expensive and a not-necessarily-gonna-happen process. On the other hand, if the move is towards distributed resource (generation) projects—more numerous, smaller, quicker from application-to-in-service— and we, either individually or collectively, can play a role in their creation and profitability. l F O N Oversold. Under Delivered.