Bloomberg Makes it Official: Low-Sulfur Heating Oil Required in NYC by 2012
New York Mayor Michael Bloomberg signed a bill on Monday that required lower sulfur content and at least 2 percent biodiesel content for heating oils used in the City. (image: gothamist.com)
According to New York Mayor Michael Bloomberg’s Twitter feed, he on Monday signed city intro. 194-A into law, which mandates lower sulfur content in no. 4 and no. 6 heating oils. No. 4 and no. 6 heating oils, often referred to as “residual fuels,” are made up of the low-quality end products of the oil refining process and are usually used to power ships and heavy machinery. In New York City, many condominiums, apartment complexes, and other large commercial buildings use the fuels for heating because they are relatively cheap. Unfortunately, what make the fuels cheap are the many impurities they contain, which cause inefficient combustion that results in unhealthy and unsightly black emissions.
The enactment of intro. 194-A requires that heating oils burned in New York City must contain no more than 1,500 parts per million of sulfur after October 1, 2012. It also requires all heating oil used in the city after October 1, 2012 to contain at least 2 percent biodiesel.
Mayor Bloomberg and City Council Speaker Christine Quinn jointly announced support for the measure in late July, so the signing of the law was just a formality. Now fully official, the new law means cleaner air for all new Yorkers and more energy-efficient heating systems in large buildings.
Some voices in the refining industry claim that the new mandates will bring higher heating oil prices for residential and commercial customers alike, but considering that the requirements will be phased in over a 26-month period and supplies of lower-sulfur heating oil are ample, DEP commissioner Cas Holloway called that claim “overstated.”
Senate Upholds EPA’s Authority to Regulate Carbon Emissions
Sen. Murkowski’s resolution lost, but the close vote may have dealt a blow to any possible climate bill. (image: upi.com)
In a vote that could have powerful implications for the fate of energy and climate legislation, the Senate voted down a resolution that would have prevented the EPA from regulating carbon emissions under the Clean Air Act, Politico reported on Thursday. By rejecting the resolution, the Senate has cleared the way for the EPA to regulate emissions unless climate legislation is passed that would preempt the EPA’s power.
Sen. Lisa Murkowski (R-AL), who proposed the resolution, has been working to restrict the EPA’s power since September. The resolution would have vetoed the EPA’s endangerment finding, which concluded that greenhouse gases are a threat to human health and therefore subject to regulation under the Clean Air Act. Murkowski garnered the support of all Republicans and a handful of Democrats who claimed that EPA regulation would kill jobs and represented what Murkowski called a “power grab” on the part of the administration.
While the EPA has preserved its ability to regulate greenhouse gas emissions, the narrow margin of the resolution’s defeat could be a victory for opponents of climate legislation. The resolution lost by a vote of 47-53; as the New York Times noted in a preview of the vote, if nearly fifty senators vote to reverse the EPA’s finding then how could controversial and far-reaching climate legislation win the support of 60 senators, the number needed to override a filibuster?
Legislation that restricts carbon emissions, whether through cap and trade or some other means, will increase the costs of energy producers and those costs will likely be passed on to consumers in the form of higher prices for heating oil, gasoline, and other fuels. However, in the absence of climate legislation the EPA will likely move ahead with regulation and could cut carbon emissions at even greater cost to both producers and consumers.
NYC Air Quality Still Suffers from Residual Fuels
Progress, but far from perfect. The New York metro area is a long way from a passing grade on particulate pollution. (image: stateoftheair.org)
New York City’s air quality has improved, says the American Lung Association (ALA), but when it comes to particulate matter—soot—New York still falls well short of the EPA’s standard. The culprit? Residual fuels—no. 4 and no. 6 heating oil—that are much dirtier than no. 2 heating oil but are burned by roughly 9,000 buildings in New York because of their lower per-gallon price.
Particulate pollution is linked to a variety of health and respiratory problems, including asthma, and New York City is unusual in that the soot can largely be attributed to buildings that burn heavy, residual fuels. The ALA’s State of the Air 2010 gives the New York metropolitan area a grade of “F” for particle pollution, confirming the conclusions of the Environmental Defense Fund, which in December reported that 87 percent of New York City’s particulate pollution came from the 1 percent of the city’s buildings that burn no. 4 or no. 6 oil. These heavy fuels, more commonly used in shipping or for industrial purposes, are exponentially dirtier than no. 2 heating oil, which is the fuel typically used in home heating.
Writing for the Gotham Gazette, Rich Kassel of the Natural Resources Defense Council highlighted the ALA’s report, released on Wednesday, to emphasize the continuing need for New York City to take action. City officials have already announced plans to introduce regulations this year that would phase out the use of no. 4 and no. 6 heating oil. Along similar lines, New York State’s legislature is weighing a bill that would mandate lower sulfur levels for all heating oil. The low sulfur heating oil bill, which would bring down the sulfur content of no. 2 heating oil and effectively eliminate no. 4 and no. 6 heating oil, has received the joint endorsement of the New York Oil Heating Association and the American Lung Association of New York.
Though converting to cleaner-burning no. 2 heating oil represents a significant upfront cost for owners of buildings burning residual fuel, a study has found that the city could save $5 billion in health care costs, and save 188 lives per year. And once those buildings do convert, they’ll see the same advantages that ordinary homeowners see when they switch to low sulfur heating oil: a more efficient fuel that reduces fuel use and a cleaner fuel that lowers the maintenance needed on your heating system.
Senate Climate Bill to Be Released Next Week
Sens. Lieberman, Kerry, and Graham will take center stage next week when they unveil their energy and climate bill. (image: aprn.org)
Three key senators plan to release their proposal for comprehensive energy and climate legislation next week. Senators Kerry (D-MA), Graham (R-SC), and Lieberman (I-CT) hope to win bipartisan support with a sector-based approach that treats utilities, transportation, and industry separately, in addition to expanding offshore drilling and nuclear energy.
Though the bill rejects the economy-wide cap and trade system that the House passed last summer, the proposal still puts a cap on emissions from the utility sector—just don’t expect the trio of Senators to use the phrase “cap and trade.” While utilities face the added costs of an emissions cap, transportation would be subject to what might be called a “carbon fee on transportation fuels” (according to the Houston Chronicle) or a “gasoline tax” (according to the Los Angeles Times). The transportation fee—which would affect the oil industry—will be a “linked fee” that is tied to the price of greenhouse gas emissions for utilities. In that way, the senators hope to evenly distribute the impact between the oil industry and the natural gas industry, which powers many utilities. Industry will initially be exempt but will eventually be integrated into the emissions cap placed on utilities.
Several oil majors have already made clear their preference for a carbon tax rather than cap and trade, so the oil industry may decide to support this bill, or at least not actively campaign against it.
Passing the bill will remain extremely difficult, as the New York Times details. In their effort to win over skeptics, the bill’s trio of drafters has included language that would restrict the power of the EPA and could overturn state laws, Politico reports. While this may be necessary to win Republican votes, it could cost the votes of some Democrats who oppose restricting the EPA’s authority under the Clean Air Act.
The “tripartisan” lead taken by Kerry, Graham, and Lieberman could help lawmakers bridge the aisle and avoid some of the rancor associated with health care reform, but that’s far from guaranteed. The Senate also plans to take up financial reform, which could speed up the debate over energy and climate legislation or force it to the back burner, delaying any final action indefinitely.
Any energy and climate bill that becomes law will have some impact on the price consumers pay for heating oil. If costs for the oil industry increase, heating oil users will likely see higher prices. The oil industry’s tolerance, if not quite support, for the proposal developed by Kerry, Graham, and Lieberman could indicate that this is a climate bill that will have only a mild impact on heating costs.
Push Toward Low-Sulfur Heating Oil Part of Shift in US Refining Industry
Because of regional demand, refineries in the Northeast—like this one in New Jersey—are unique in their high output of heating oil. (image: cleanstation.net)
Export demands and forthcoming environmental regulations, including requirements for lower sulfur content in heating oil, are driving changes in the US refining sector, the oil industry newsletter The Oilspot News reported on Monday.
In recent years, demand for US-produced road diesel has grown, mostly in European and South American markets. Within that trend, demand for ultra low-sulfur diesel (ULSD) is expanding, as ULSD requirements for vehicle fuels take effect in countries like Columbia. The European Union and the US already require vehicle diesel to be USLD, and low-sulfur mandates will soon expand to cover maritime and railroad fuel in the US.
As foreign governments and other fuel markets across the board transition to low-sulfur fuel, the US heating oil market, which is heavily concentrated in the Northeast, is following suit. As HeatingOil.com has reported recently, several Northeastern states are in the process of applying new low-sulfur mandates to heating oil. To meet increased demand for low-sulfur heating oil, some refiners will simply produce more low-sulfur fuel that meets mandates for heating oil as well as vehicle fuels.
These facts appear to support the Independent Connecticut Petroleum Association’s Gene Guilford, who argued that increased demand for ULSD as a result of low-sulfur heating oil requirements would not constitute a major change to US refinery activity or raise consumer heating oil prices. Heating oil can currently contain up to 2,000 parts per million (ppm) of sulfur, a unique level of sulfur that is not shared by other fuels. Because of high regional demand, refineries in the Northeast (known as Petroleum Administration for Defense District I or PADD I) are unique in their higher output of heating oil. As The Oil Spot explains, “‘PADD I is the holdout here,’ said [Alfred Luaces with Purvin & Gurtz, Inc.], comparing the region’s high yield in heating oil output to the rest of the country.”
It appears that the US refining industry is already in the process of producing more low-sulfur and ultra low-sulfur fuel in response to both foreign demand growth and shifting regulations around the world. New low-sulfur heating oil mandates, assuming they are adopted by several states in the near future, will likely bring about only nominal increases in domestic demand for low sulfur fuel.
As long as the requirements are implemented gradually, already-increasing levels of low-sulfur fuel production should be able to absorb growing demand and avert major heating oil price spikes for consumers in the Northeast.
Maine Passes Low-Sulfur Heating Oil Bill
Concerns about air quality at Acadia National Park prompted Maine to pass legislation that will lower the sulfur content of home heating oil. (image: nps.gov)
Maine’s Senate passed a bill on Thursday that would require heating oil to have lower sulfur content beginning in 2014 (full text available at the website of Maine’s legislature). Maine’s House of Representatives passed the bill on Tuesday, and now it only needs to be signed by Gov. John Baldacci.
The bill requires that all distillate fuels—heating oil and diesel—have a maximum sulfur content of 0.05 percent by weight starting January 1, 2014. By January 1, 2018, that limit is lowered to 0.0015 percent by weight. Those percentages correspond to 500 parts per million and 15 parts per million of sulfur.
Maine’s bill was first proposed in December, and officials cited poor air quality in Acadia National Park as one reason to limit the sulfur content of heating fuels. High-sulfur fuels emit sulfur dioxide, which adds to particulate matter that pollutes air and can cause respiratory problems.
Numerous Northeastern states have proposed legislation calling for low-sulfur heating oil, including Connecticut, New York, New Jersey, and Pennsylvania. The proposals in Connecticut and Pennsylvania also mandate that heating oil be blended with biodiesel, which the Maine bill does not. Massachusetts already has legislation that will require all heating oil to contain 2 percent biodiesel by July 1, 2010.
Maine has passed legislation on low-sulfur heating oil; Massachusetts has passed legislation requiring biofuel in heating oil. How long until other Northeastern states follow suit?
Industry Groups Spar Over Pros and Cons of Low-Sulfur Heating Oil Mandate in CT
ICPA President Gene Guilford and API Senior Communications Manager Jane Van Ryan. (image: heatingoil.com and rpi.edu).
The “greening” of heating oil has been in the news a lot lately around the Northeast, as many state governments in the region consider laws requiring lower sulfur content and higher levels of biodiesel in residential heating oil. Recently, legislation to that end took a step closer to ratification in Connecticut.
The environmental and health benefits of lower-sulfur heating oil are clear: when burned, sulfur produces sulfur dioxide gas which lowers air quality and detrimentally affects respiratory health. The less sulfur in the fuels we use for transportation and heating, the better.
However, the progression of low-sulfur heating oil legislation has revived the debate over the economic costs and benefits of such measures, specifically for heating oil consumers.
On Thursday, Jane Van Ryan, the Senior Communications Manager and New Media Advisor at the American Petroleum Institute (API), wrote a blog that laid out her organization’s opposition to the Connecticut bill; the API’s opposition was joined by Steve Guveyan of the Connecticut Petroleum Council in testimony to the state legislature. The API is the nation’s largest industry group “that represents all aspects of America’s oil and natural gas industry” (description from the API’s blog, “Energy Tomorrow”).
Like most statewide heating oil industry groups, the Independent Connecticut Petroleum Association (ICPA) strongly supports the potential low sulfur and biodiesel mandate. In an interview with HeatingOil.com last fall, ICPA President Gene Guilford stated that his group’s members “are primarily petroleum retailers like gas stations and heating oil dealers.”
What’s behind the opposing viewpoints on this major issue in the oil industry? Are low sulfur and biodiesel requirements good or bad for heating oil consumers? Take a look at the arguments below from both sides and make a decision for yourself.
Ms. Van Ryan begins her blog with an analogy that compares heating oil to gumballs, and argues that the proposed mandates would require complex and expensive changes to the manufacturing and distribution system of “gumballs” that would bring about higher retail prices. “As a gumball manufacturer, your job has become more complicated and costly, when all you’re trying to do is supply gumballs to people who enjoy them,” she writes. Mr. Guilford dismisses this premise, stating, “For 35 years API has always opposed every fuel specification change. These scare tactics and misinformation is [sic] nothing new.” Specific points of contention follow:
1. Competition for road diesel supplies. Reducing the sulfur content of heating oil to 15 parts per million (ppm) would make it nearly identical to the diesel fuel used by trucks and other vehicles. Van Ryan argues that this “would put homeowners in direct competition with motorists and truckers who vehicles require diesel fuel.” According to Van Ryan and Guveyan, increased demand for the product would drive up heating oil prices. Guilford calls this premise “false,” arguing that US refiners make massive quantities of low sulfur diesel/heating oil for export to other countries, and the mandates would only require a small portion of those exports to remain in the US for use as heating oil. He added, “Since API is exporting all this material using it for heat here obviously doesn’t compete with anything.”
2. Higher cost of road diesel. According to Van Ryan, “Statistics for the past three years show that diesel fuel has ‘almost always’ been more expensive than home heating oil, ‘ranging up to 18 cents a gallon more.’” Guilford refuted this assessment, saying “There have been weeks during this past winter when dyed ulsd (ultra low sulfur diesel) has been less expensive than traditional #2 oil.” The validity of the arguments depends on how long the timeline the price comparisons are placed on, as well as the type of diesel fuel used. Ultra low sulfur diesel has lower sulfur content than does low sulfur diesel. A quick snapshot of EIA data that averages all types of road diesel shows the national average retail price for road diesel on March 18, 2010 was $2.904 and the national average retail price for heating oil was $2.919. On March 15, the average road diesel price was $2.924 per gallon and the average heating oil price was $2.929 per gallon.
3. Timetable for switch to low-sulfur heating oil. Van Ryan argues that the switch to low-sulfur heating oil, as set by the pending bill, would happen too quickly and put an excessive burden on refiners. She also warns, “Connecticut’s heating oil recipe would be the only one like it in the country, a fact which could complicate the fuel’s delivery.” To counter this argument, Guilford again refers to the huge quantity of diesel exports from the US: “Given the 80 million barrels of ulsd that were exported in 2009, the fact we want a tiny percentage to be left here is hardly a dramatic impact on domestic refining.” In response to Van Ryan’s second claim, he posits that the requirements would actually give American heating oil users access to a larger supply pool, which could bring lower prices, writing, “ulsd is a worldwide standard and if there is an unusual spec it is 3000ppm heating oil. CT would have far stronger sources of supply if we were plugged into a worldwide ulsd distillate pool.” Most US heating oil currently contains 2,000 to 3,000 ppm of sulfur.
4. Operation of biodiesel in cold weather. Finally, Van Ryan states that “Significant cold-weather problems have occurred with biofuels, and there is no large supplier of biofuels in the Connecticut area.” Poor performance in cold weather would obviously be a major concern for heating oil users; a lack of adequate supply implies higher prices. Guilford responds vehemently to these claims, writing, “This is so laughable as to be beneath the dignity of a national petroleum association. We have…sold biofuels here for more than a decade for both heat and transportation without issue. The National Biodiesel Board (NBB) verified that there is ample material available for blending to meet even a national mandate for heating oil.” He also claims that Van Ryan’s citing of “cold-weather problems” with biodiesel was motivated by political strategy and not fact. According to Guilford, “API’s lobbyists here approached the CT BioFuels Association, our partners on the ulsd/bio legislation, and told them that they had NO issue with the bio part of our bill - and API asked CT Bio Assn to split off from us and pass just the bio part and oppose the ulsd part.” If that account were true, API’s concerns about biodiesel’s performance in cold weather as stated by Van Ryan would be disingenuous. Reached for comment on Guilford’s staement, Guveyan (who is a registered lobyist for API) said that he himself did not approach the Connecticut Biodiesel Association with the alleged proposition. He added that the prospect of contracted lobbyists making such a proposition “did not ring a bell,” and stated that API opposed all mandates and bans on additives to liquid petroleum fuels.
Clearly, the API and the ICPA do not see eye to eye on the issue of lower sulfur/higher biodiesel mandates in the state of Connecticut. We encourage heating oil users to use the above summary as a starting point of their own research on the pros and cons of green heating oil mandates in Connecticut and other states where such mandates are being considered. Please let us know what you think in the comments section and keep visiting HeatingOil.com for updates on the legislative progression of mandates throughout the Northeast.
With Health Care Fight Over, Congressional Dems Prepare Push for Climate Bill
With the ink barely dry on the health care bill, the Senate turns to climate and energy. (image: DoubleSpeak Media via flickr.com and media.cleveland.com)
On Friday, just two days before the all-important health care vote in the House of Representatives, 22 senators sent a letter to Majority Leader Harry Reid urging him to make comprehensive energy and climate legislation a priority in the near future. The letter echoed previous arguments of proponents for climate and energy action that connect limiting carbon emissions and stimulating green industries to job creation, energy independence, and economic health.
Just a few hours after President Obama signed the health care reform bill into law, three prominent senators got back to work at promoting climate and energy legislation. The Hill reported on Tuesday that Senators Kerry (D-MA), Graham (R-SC) and Lieberman (I-CT) made a PowerPoint presentation to 19 senate colleagues in an attempt to drum up support for their climate bill, meant to attract support from both parties. In their presentation, the trio laid out the basic principles of their plan, including limiting carbon emissions, expanding domestic oil and natural gas production, and offering incentives for low- and no-emission power plants and transportation. After the meeting, Sen. Lieberman explained that the aim of the presentation was to get feedback from senators that will inform the first draft of the planned bill, to be written during Congress’s two-week recess that begins on March 29. Sen. Kerry reinforced the group’s accelerated timetable, saying, “we have some really key meetings in the next few days . . . we have a lot of work to do in the next 48 hours.”
Determined activity by Senate heavyweights in close proximity to the end of the health care battle that had consumed both houses of Congress for over a year hints that the next item on the ruling party’s legislative agenda will be climate and energy. Opposition to energy or climate action (or a combination of the two) will be strong, but probably not as vehement as Republicans’ resistance to health care reform. For example, expansion of offshore drilling for oil and gas, long a cause of Republican lawmakers, is a central part of two of the three climate/energy proposals currently floating around Congress (blogger Donnie Fowler wrote up a clear and concise summary of all three for the Huffington Post last week), which will likely win some Republican support or at least tone down opposition.
Further support for moving climate and energy legislation along sooner rather than later comes from Sen. Kerry’s claim in late February that Majority Leader Reid, who sets the Democratic agenda in the Senate, is “deadly serious about making progress this year on climate and energy reform.” According to Mother Jones, Kerry elaborated further in comments to the Washington Post:
Senator Reid made it clear to me the other day that he wants a bill and he wants it soon. I can’t give you an exact timeline, but we are working very very diligently with our colleagues and all of the stakeholders to think this through carefully and get this done right, and get it done in a way that can pass the Senate.
With the Majority Leader and at least 25 other senators on board with making climate and energy legislation the next big push in Congress, chances are that it will happen soon. Legislative efforts on that front will be focused in the Senate, as the House passed a climate and energy bill (known as the ACES or Waxman-Markey bill) in June of last year.
Most observers agree that the best hope for passing climate and/or energy legislation in the next few months is to tie the legislation to job creation and economic recovery and include concessions to satisfy Republican interests. The American economy is still suffering, and unemployment rates remain extremely high, which make job creation the number one action that Americans would like to see come out of the halls of Congress ASAP. If supporters can make a strong case that a comprehensive energy bill will create a significant amount of American jobs, the bill will gain pubic support and make opposition a risky tactic for any politician. Furthermore, if consulting with Republican senators in sessions like the Kerry-Graham-Lieberman PowerPoint presentation yields Republican ideas that make it into a final version of the bill, the minority party could take some ownership of it and maybe even throw some votes behind it (although only one Republican besides Sen. Graham, Sen. George Voinovich (OH), attended the PowerPoint session).
The biggest question is what form a final Senate bill on climate/energy will take. With two bills and one proposal in various stages of development and approval, one can bet that the basic principles of the final energy bill are already in circulation.
Until that final bill is written, it is impossible to say whether it will be a positive or negative development for heating oil users. For instance, the Waxman-Markey bill includes funding increases for programs that provide heating oil to needy Americans, but also includes a cap and trade system that would increase the prices of consumer petroleum products like heating oil.
Take a deep breath, America. The brutal political battle over health care reform is essentially finished, but the fight over climate legislation and our country’s energy future is about to begin.
PA Is Latest State to Consider Low-Sulfur Heating Oil Mandate
Pennsylvania’s state capitol is the scene of the latest push for low-sulfur heating oil. (image: media.pennlive.com)
On Wednesday Pennsylvania State Sen. Ted Erickson introduced a bill (full text of Senate Bill 1282 available here) that would require heating oil to have a maximum sulfur content of 15 parts per million and be blended with biodiesel. With this bill Pennsylvania joins a growing list of states to propose a shift to a cleaner heating fuel for home heating oil consumers.
The bill in Pennsylvania would amend a 2008 bill known as the Biofuel Development and In-State Production Incentive Act. The low-sulfur mandate would go into effect on May 1, 2011; heating oil in Pennsylvania is currently allowed to have a sulfur content of up to 2,000 parts per million. The requirement for heating oil to include 10 percent biodiesel would go into effect on May 1, 2013.
EPA to Undertake Comprehensive Study of Hydrofracking
The EPA is taking on the controversy surrounding hydrofracking, and plans to deliver an answer in 2012. (image: asmalldoseof.org and sierraactivist.org)
Following years of controversy over a technique used for extracting hard-to-reach oil and natural gas called hydraulic fracturing (a.k.a. hydrofracking), the EPA announced on Thursday that it would invest two years and almost $2 million to study hydrofracking’s possible threats to human health and the environment. The Wall Street Journal reported on the agency’s announcement, as made by Paul Anastas, assistant administrator for EPA’s Office of Research and Development:
Our research will be designed to answer questions about the potential impact of hydraulic fracturing on human health and the environment. The study will be conducted through a transparent, peer-reviewed process, with significant stakeholder input.
Representatives of Heating Oil Industry and American Lung Association Team Up to Urge Passage of Low-Sulfur Mandate by NY Senate
The American Lung association in New York and the New York Oil Heating Council have teamed up to support a bill that would lower the sulfur content of heating oil in New York state. (image: nyoha.org and lungusa.org)
An opinion piece published on Wednesday by the Buffalo News encourages the New York State Senate to pass a pending bill that would lower the sulfur levels in home heating oil. The article’s two authors are an unlikely pair: the CEO of the New York Oil Heating Association, John Maniscalco, and the CEO of the American Lung Association in New York, Scott Santarella.
The article is short and to the point, and makes a case for the Senate to take action on the bill immediately, citing the reduction of particulate and greenhouse gas emissions:
The sulfur content permitted in heating oil in New York State is up to 15,000 parts per million, or about 1,000 times the amount allowed in diesel fuel for vehicles. Requiring a shift to the ultra-low sulfur heating oil would reduce sulfur by 99 percent. That is the equivalent to shutting down 2 ½ coal-fired generating plants in the state, and would dramatically reduce the amount of nitrogen oxides—key ingredients in the formation of smog—by as much as 30 percent.
The authors also cite the health and environmental benefits of reducing heating oil’s sulfur content that would come in the form of reduced sulfur dioxide emissions, which qualify as particulate emissions. The article goes on to argue that the diverse coalition in favor of the bill, which includes environmental and labor groups along with the heating oil industry, speaks to its broad appeal and overwhelmingly positive impact.
Speaking on behalf of the consumer, the article foresees cost savings, a smaller carbon footprint, and better quality heating for users of low-sulfur diesel:
Since ultra-low sulfur heating oil burns more efficiently and is readily available, the industry expects there could be as much as a $40 million annual savings from lower maintenance costs and as much as a 4 percent savings per household in equipment efficiencies. In addition, it makes heating oil on par with natural gas in environmental pedigree.
The bill the authors support, S1145c/A10108 was passed by the New York Assembly in June of last year, by a vote of 146-1. Since then, the bill has been the subject of sporadic debate while the Senate has considered it. Opponents of the bill are primarily business interests and petroleum refiners. The New York State Business Council has stated its belief that “this measure will increase prices on oil providers who will be forced to make major capital investments to meet the requirements of this bill. These costs will ultimately get passed on to consumers.”
The bill is one of several pieces of pending legislation on low-sulfur heating oil in Northeastern states, including Maine and New Jersey. Along similar lines, the City of New York announced an initiative to phase out use of high-sulfur and high-particulate residual fuels, known as nos. 4 and 6 heating oil.
The heating oil industry throughout the Northeast has been consistent in its support of legal action to require cleaner heating oil wherever possible. Industry representatives such as Gene Guilford of the Independent Connecticut Petroleum Association have called for consistent low-sulfur requirements across state lines to ensure smooth transition to lower-sulfur heating oil for refiners and wholesale suppliers.
With low-sulfur legislation making its way through the statehouses in many of the biggest heating oil-using states, those consistent regulations could soon become a reality.
NJ Cap and Trade Funds Siphoned under Deficit Strain
Gov. Chris Christie of New Jersey reached into his state’s Global Warming Solutions Fund to help resolve New Jersey’s budget deficit. (image: media.nj.com)
New Jersey is one of 10 states taking part in the Regional Greenhouse Gas Initiative (RGGI), a cap and trade market in the US Northeast that caps emissions from power plants and auctions off emissions permits. Profits raised through the auctions were intended to fund clean energy projects, but New Jersey has moved the nearly $65 million that auctions have earned since late 2008 from its Global Warming Solutions Fund to its General Fund, reported Reuters.
The state faces a huge budget deficit, and Gov. Chris Christie decided to move the $65 million away from clean energy to help close that deficit. Any revenue raised by the auction of emissions permits through June will be included in the transfer of funds.
Environmental groups have opposed removing money from the Global Warming Solutions Fund, saying it will harm the environment and delay job creation that could be spurred by investments in clean energy.
Cap and Trade to Be Left Out of Latest Senate Climate Bill
The reputation of “cap and trade” has been so tarnished that the newest Senate proposal avoids it altogether. (image: cafepress.com)
In the latest effort to craft a climate bill capable of passing the Senate, the trio of senators at the center of the legislative push—John Kerry (D-MA), Lindsey Graham (R-NC), and Joe Lieberman (I-CT)—have gotten rid of cap and trade in favor of a plan that would target sectors of the economy most responsible for carbon emissions, the Washington Post reported on Saturday. The Senators themselves have not offered any details on the upcoming legislation, but the Post cites “sources familiar with the process.”
Graham, Kerry, and Lieberman have been working on an alternative to cap and trade since December, as cap and trade’s opponents have tarnished the idea and made a cap and trade plan politically untenable. But although the phrase “cap and trade” may be dead—the new emphasis is on “pricing carbon”—some of its meaning may live on. One key part of the proposal involves a cap on emissions from electric utilities; according to Scott Segal, a lawyer who represents utilities and refiners, “It is hard to imagine a policy which imposes a cap but does not allow trading among those that are regulated.”
ConocoPhillips, BP America Leave Climate Lobby
As USCAP sheds members, its ability to push through climate legislation wanes. (image: triplepundit.com)
Two major oil companies, ConocoPhillips and BP America, announced on Tuesday that they were leaving a diverse coalition of industry and environmental groups working for climate change, reported the New York Times. Conoco and BP pulled out of the US Climate Action Partnership (USCAP) because of their perception that the group’s lobbying efforts favored coal and utility companies at the expense of oil refiners. Caterpillar also left USCAP at the same time, saying it would focus its efforts on developing new technology to reduce emissions.
USCAP’s membership includes such unlikely partners as Shell and the Environmental Defense Fund, and helped shape the climate bill that passed the US House last summer, reported the blog SolveClimate. The allotment of free emissions allowances under that bill’s cap and trade system was skewed heavily toward utilities. The bill would also make refiners responsible not only for their emissions but for the emissions of consumers who used refined oil products.
The departure of two major oil companies from USCAP could further undermine the prospects for a climate bill to pass the Senate this year, and further fragments the diverse range of interests that any climate bill needs to appease.
Obama Embraces Copenhagen Accord; Pledges Cuts Without Senate Backing
President Obama follows through with Copenhagen promise, but the Senate’s role is still unclear. (image: timesonline.co.uk)
In encouraging but slightly underwhelming news, the United States gave formal notice to the UN last week that it would embrace the Copenhagen Accord and reduce greenhouse gas emissions. According to the Guardian, Todd Stern, the State Department envoy for climate change, told the UN that America “could cut carbon emissions by 17% from 2005 levels by 2020.” Of course, he added, such action would be contingent upon Congressional climate change legislation.
The Guardian found the announcement especially encouraging coming on the heels of Wednesday’s State of the Union address, in which President Obama promised to move forward with his energy and climate change agenda. The 2020 commitment is only a first step, to be followed with a 42 percent cut in 2030, and a cut of more than 80 percent by mid-century.
Under the watered-down accord reached in Copenhagen, countries were expected to offer formal proposals of action by January 31. But with an “elastic” deadline, many fear any momentum generated by the Copenhagen talks has fizzled. Obama’s recent pledge to continue with the climate agenda, as well as his embracing the Copenhagen Accord, is hoped to generate some continued movement.
Energy Issues in Obama’s State of the Union Speech
Support for domestic oil drilling and nuclear energy expansion was a point of common ground in the President's address and the Republican response. (image: cbc.ca)
In his State of the Union speech on Wednesday, President Obama urged the U.S. Senate to pass comprehensive energy and climate legislation, and turned away from any discussion of cap and trade or putting a price on carbon to focus on job creation and energy independence. Such legislation can put Americans work today, “building the infrastructure of tomorrow,” said Obama.
Framing clean technology in terms of national competitiveness, Obama went on to say that “There’s no reason Europe or China should have…the new factories that manufacture clean energy products.” Building the facilities to create clean energy and offering homeowners rebates for making their homes more energy efficient will create those jobs in the US.
Study: NYC Could Save 188 Lives, $5 Billion per Year With Ban of Dirty Heating Oils
Any number of the New York City buildings seen here could be particulate polluters that use no.4 and no. 6 residual oils as heating fuel. (image: Kaldoon via flickr.com)
As HeatingOil.com reported earlier this month, New York City is gearing up to introduce regulations phasing out the use of No. 4 and No. 6 heating oil. And as The Daily News reported Thursday, a new study found that such a move could save up to 188 lives per year. By switching to the much-cleaner No. 2 fuel oil, the city would lower particulate airborne pollutants, saving lives and money.
In his recent “State of the City” address, Mayor Michael Bloomberg addressed the initiative by saying his administration would make “our air cleaner by greening the heating fuels used by schools and large buildings.” Though he did not go into further specifics within the speech, he does have plans to put the aforementioned regulations in place within the next few weeks, an NYC energy blog reported.
Particulate matter found in soot left over from residual oil (another name for no. 4 and no. 6 oils, as they constitute the residue or “leftovers” from the distillation process) can be inhaled deep into the lungs, causing serious health consequences. Michael Livermore, executive director of NYU’s Institute for Policy Integrity, the organization responsible for the study, told reporters Thursday that “In New York City we see higher instances of asthma, bronchitis, impaired lung development in children, and heart attacks, because of PM [particulate matter] pollution.”
The institute’s study explains where residual oil, the source of all this particulate matter, comes from. Heating oil is classified into six types, numbers one through six. While there are a variety of factors that go into number designation, the important thing to note is that the higher the number, the more viscous the fuel, and the more particulate emissions. The heaviest oils, like No. 6, are so viscous that they resemble tar or asphalt at room temperature. No. 2 heating oil, a light “distillate” fuel, is much cleaner, emitting a fraction of the particulate matter of the heavier oils.
As HeatingOil.com reported in December, a study by the Environmental Defense Fund found that there are approximately 9,000 buildings in the five boroughs of New York City that are still using No. 4 and No. 6 oils for heating fuel. By phasing out this “unrefined sludge laced with pollutants,” the city could save $5.3 billion in health care costs. According to NYU’s study, “over a twenty year period, if full conversion takes all twenty years, a minimum of nearly 600 mortalities will be avoided…however, it is equally likely that the actual number of mortalities will be 1,540 over twenty years…for each year quicker that full conversion is achieved.”
In other words, get cracking New York. The health and economic benefits of such a change would far outweigh the inconvenience and cost to a select number of landlords.
Murkowski Gains Democratic Allies to Block EPA Emissions Regulation
Senator Lisa Murkowski (R-Alaska). (image: images.morris.com)
Politico.com reported on Thursday that Sens. Blanche Lincoln (D-Ark.) and Mary Landrieu (D-La.) are collaborating with Sen. Lisa Murkowski (R-Alaska) in her efforts to block the Environmental Protection Agency from regulating greenhouse gases under the Clean Air Act.
Lincoln, who hails from a Republican-leaning manufacturing state, said that, “Heavy-handed EPA regulation, as well as the current cap and trade bills in Congress, will cost us jobs, and put us at an even greater competitive disadvantage” relative to China, India, and other countries.
Murkowski planned to formally introduce on Thursday a “resolution of disapproval,” a rarely used legislative tool that allows Congress to overturn agency rules. Although this time she has gathered some support from Democrats, the resolution is not the first time that Murkowski has tried to deny the EPA jurisdiction over greenhouse gas emissions.
MA Special Election Could Have Huge Effect on Climate Legislation
Massachusetts Senate candidates Martha Coakley and Scott Brown. (image: 3.bp.blogspot.com)
Tuesday’s special election in Massachusetts could have serious implications for climate legislation, SolveClimate.com reports. As voters go to the polls to elect a replacement for late U.S. Senator Edward Kennedy, they will be helping determine the fate of climate bills under consideration in Congress. Democrats currently enjoy a 60-vote majority in the Senate, a crucial number that can stop a Republican filibuster.
The candidates represent both sides of the climate debate, with Republican candidate Scott Brown, a state senator, clearly stating that he opposes cap and trade. If elected, he would “eagerly” side with Republican leaders against the regulation of greenhouse gas emissions. Democratic candidate Martha Coakley, on the other hand, is an attorney general with a strong record in environmental policy. It was her office’s lawsuit against the EPA that resulted in last year’s declaration by the EPA that greenhouse gases are a public health hazard. If elected, Coakley will throw her support behind the impending climate change legislation.
Oil Industry Group Opposes NJ’s Plan For Lower-Sulfur Heating Oil
(image: rebuildingtogether.org)
As we reported last week, New Jersey is considering lowering the allowable sulfur content of heating oil. Currently, No. 2 oil may have 3,000 parts per million (ppm) of sulfur; under the proposed regulations, that would be reduced to 500 ppm by 2014, then step down further to 15 ppm by 2016. In this, New Jersey is moving in the same direction as other Northeast states, such as Connecticut and Maine, which are also contemplating similar reductions.
The reason for the reductions is to reduce air pollution. (Among other things, sulfur emissions contribute to acid rain.) Overall, the heating oil industry has been supportive of the shift to lower-sulfur fuels, noting that to remain a viable fuel option, heating oil needs to be in tune with consumers’ growing eco-consciousness and become even more efficient and environmentally friendly than it is. That’s also why the industry has embraced raising the percentage of biofuel in heating oil.
