Welsh Oil Thefts Up 500%
Heating oil tank locks can help prevent thieves syphoning oil. Thefts of heating oil tanks have spiked in rural areas of the UK. (image: cusworth.net)
Organized criminal groups are tailing heating oil delivery trucks and casing rural British properties before returning at night to steal the “liquid gold”.
A spike in the price of fuel oil across the UK has contributed to a 500 percent increase in the number of Welsh heating oil thefts in the last five years, the BBC reports. There is now the equivalent of one heating oil theft every day. The numbers jumped from 68 in 2007 to 364 last year, according to statistics released under the Freedom of Information Act.
Insurance specialists say the rise in heating oil thefts is closely linked to the commodity’s volatile price. When prices spike, heating oil becomes more attractive to criminals. Heating oil thefts are much more common in the UK than here in the US, though instances of American thieves targeting the fuel have increased in recent years as prices climbed.
The cost of oil has risen sharply in the UK this winter, when temperatures plummeted to 30-year lows. Nicola Whittaker, rural affairs specialist from insurance firm NFU Mutual, said there had been a noticeable increase in claims from farmers and rural homeowners.
Just before Christmas, a Welsh property near Welshpool was hit. One-thousand litres (264 gallons) of heating oil worth £700 ($1100) was siphoned from a tank. Many rural homes rely on heating oil because they are not connected to gas mains supply. Their tanks are often visible and accessible from roads for ease of delivery, making them more susceptible to thieves.
“It did really start to increase towards the end of 2010 because the price of oil increased by about 70 percent,” Whittaker said. “That trend continued into 2011. We were seeing a lot of oil going missing from farms and homes in rural areas.”
While more businesses were generally targeted in oil thefts across the UK, homes were more likely to be hit in Wales.
“Heating oil is a lucrative commodity for thieves when the market value peaks; as such we are advising people to treat their supply like liquid gold.”
Most of the crimes are thought to be carried out by organised criminal gangs, who check out properties in advance, sometimes following delivery tankers to identify targets, then return at night to steal the oil.
Police Tips To Prevent Heating Oil Thefts:
* Fit a secure tank lock.
* Check oil levels frequently.
* Arrange smaller but more frequent oil deliveries.
* Install movement sensor security lighting around the tank.
* Screen tank from view with shrubs or fencing.
* Install lockable access gates, and erect lockable fencing.
* Fit an alarm system which warns if oil levels drops suddenly.
* Be vigilant following a delivery.
Senator Seeks Hearing on Northeast Refineries
Senator Bob Casey is campaigning for a senate hearing into what effect the closures of three Northeast refineries will have on the region's energy consumers. (image: pennlive.com)
Three US lawmakers are calling for a high-level hearing into refinery closures in the Northeast, which are tipped to cause price hikes for millions of heating oil users, Reuters reports. The call comes as hundreds protest in Pennsylvania against the refineries being shut down, marching in numbers on Saturday on Gov Tom Corbett’s office.
Senator Bob Casey (D-Penn) asked on Friday for a Senate hearing to investigate job losses and potential shortages of refined products should three Philadelphia-area refineries be permanently idled. Casey, along with US Representatives Pat Meehan (R-Penn.) and Pennsylvania state Representative Thaddeus Kirkland met with United Steelworkers (USW) union presidents from the three refineries to discuss their concerns.
In a letter to Jeff Bingaman (D-NM), chairman of the US Senate Committee on Energy and Natural Resources, Casey said he was concerned about the 6000 jobs being lost. But he was also alarmed at the possibility of price spikes for gasoline and particularly heating oil up and down the Northeastern US.
“If no buyer is found and these facilities were to permanently close, the loss of our refining capacity on the east coast will have a substantial ripple effect across the nation’s economy.”
ConocoPhillips shut down its 185,000 bpd refinery in Trainer in late September. Union officials believe the refinery will be razed if no buyer is found by the end of March. Sunoco’s 335,000 barrel per day Philadelphia refinery is still operating, but is scheduled to close at the end of June if it isn’t sold. Sunoco also owns the 178,000 bpd refinery in Marcus Hook, which was idled late last year.
The three refineries are within a 12-mile radius of each other in southern Pennsylvania. They collectively account for over half the Northeast’s refining capacity. A December study by the US Energy Information Administration warned the closures could result in spot shortages of refined petroleum products, causing supply disruptions and spiking prices, particularly in the Northeastern heating oil market.
The Northeast is the nation’s biggest heating oil user. Around 6 million of the region’s homes rely on heating oil as their primary source of warmth. Three Northeast lawmakers have already written to Energy Secretary Steven Chu calling for the Northeast heating oil reserve to be boosted to two million barrels as a safeguard and have asked the Federal Trade Commission to investigate the refinery closures on behalf of energy consumers.
The USW union has also warned idling the refiners could increase the nation’s reliance on foreign oil imports, leaving the US at the mercy of volatile international oil markets and geopolitical developments like the Libyan conflict and worsening standoff with Iran.
Jim Savage, the Philadelphia refinery union president, said union officials had asked the legislators to step in and show some leadership, after pleas to other local legislators went unanswered.
“A lot of people thought this was end of the process. There is still a lot of fighting left,” he said.
Booming Distillate Demand: EIA
Strong overseas demand for diesel and heating oil has pushed up production of distillates at US refineries to record levels. (image: todayifoundout.com)
US refineries are ramping up production of distillate fuel to record levels on the back of heavy overseas demand and higher profit margins.
Figures released yesterday by the Energy Information Administration show distillate yields, which include heating oil and diesel, reached 29.7 percent in October. That matches the previous record set in December 2008.
The yield figure measure the proportion of each barrel of crude oil a refinery turns into distillate relative to other refined products. In contrast to distillates, yields for gasoline, kerosene and heavy residual fuel oil are in decline.
Though heating oil consumption has been falling in the US in recent years, the distillate yield has been trending up since 2001. The EIA said the recent uptick in distillate production was partly explained by the significantly higher price margins refineries could make on distillate over gasoline.
Refineries still produce about 1.5 times more gasoline for every barrel of crude they process than distillate. But that figure has been dropping from the 1990s in response to market conditions and refineries look to maximize distillate yield and production.
But another key reason for the rise of distillate is burgeoning overseas demand. EIA figures show US exports of distillate fuel reached 656,000 barrels per day in 2010, and have grown each year since 2003. The surge in foreign diesel demand and offshore distillate exports is helping support heating oil prices, despite a mild start to the US winter.
This is because heating oil and diesel are nearly identical products. But because there is no diesel future traded by investors on energy markets, heating oil is often traded in its place. If diesel demand grows, heating oil futures are often bought up by investors, pushing up the price of fuel oil for homeowners.
Central and South American countries imported nearly half the US distillate exports – 311,000 barrels per day. Mexico was the region’s largest importer, averaging 94,000 daily barrels.
Limited refining capacity in those countries combined with their proximity to Gulf of Mexico refining markets also contributed to the rise in US distillate exports. Europe was also a big importer of US diesel and heating oil. The Netherlands was the single largest importer in 2010.
Union Calls for Hearings on Refinery Closures
The closure of three-Philadelphia refineries threatens to create shortages of heating oil in the Northeast and cause prices to spike. (image: philadelphia-reflections.com)
An oil workers union is calling for congressional and state hearings to investigate the closures of three Philadelphia refineries which are tipped to cause heating oil price spikes in the Northeast.
Sunoco and ConocoPhillips have announced plans to idle or close the oil refineries which collectively account for nearly half the Northeast’s total refining capacity. The United Steelworkers (USW) union says the closures will put thousands of workers out of jobs and make the US more dependent on volatile foreign oil imports, sacbee.com reports.
A report last week by the US Energy Information Administration warned the closures could result in spot supply shortages and sudden price increases for refined fuels in the Northeast. The region is the nation’s biggest heating oil user with around six million families dependent on fuel oil for warmth during the harsh winter.
Three Northeast lawmakers have written to Energy Secretary Steven Chu calling for the Northeast heating oil reserve to be boosted to two million barrels as a safeguard and have asked the Federal Trade Commission to investigate the companies’ plans on behalf of energy consumers.
Meanwhile, USW union leaders called this week for congressional and state hearing to investigate the devastating likely effects of the refineries’ closures.
The cited the Northeast’s fuel oil needs for heating, diesel, jet and auto fuel and the direct employment of 2500 workers plus thousands of other jobs dependent on the refineries. And they warned national economic security would be threatened if alternative fuel supplies had to be imported, which were subject to uncontrolled price hikes and supply shortages.
USW local president Denis Stephano noted the EIA’s warnings about supply shortages and pointed out the major disadvantages of alternative sources of petroleum products.
“Pipeline capacity is insufficient to make up the entire lost production volume, and depending on Gulf Coast refineries to ship enough oil products to the Northeast is dicey when hurricanes hit that area of the country,” Stephano said. “After Hurricanes Katrina and Rita, a number of refineries were down for six to nine months and it was the Northeast refineries that made up the slack. What happens now when this country doesn’t have a back-up system in place?”
Fellow union president Dave Miller spoke about the negative impact the refinery closures would have on the area’s communities.
“These refinery shutdowns will force small businesses to close, cost local governments millions of dollars in tax revenue and force schools to operate with millions of dollars less in funding,” Miller said. “We have a well-trained and experienced workforce at these refineries and we’re ready to help a new owner or owners make a lot of profit.”
Residual Fuel Oil Use Falls in US
EIA figures show residual fuel oil use in the US peaked in the 1970s but has been declining sharply since then. (image: eia.gov)
It’s the sticky, soot-laden residue of the oil refining process and demand for it here in the US is on the decline.
Residual fuel oil is used to fuel large ships, for electricity generation and industrial purposes. And it’s also still burned in many old heating oil furnaces, mainly in big apartment building and factories.
But the dirty oil, used to make No 4 and No 6 heating oil, is bad for the environment. When burned it belches out smoke laced with particulates and sulfur dioxide that pollutes the air and poses significant human health risks.
Many states across the US have introduced regulations to phase out the use of dirty varieties of heating oil. The vast majority of homes use low-sulfur No 2 oil which is cleaner burning and much more environmentally friendly. Cleaner burning oil also creates less soot buildup, meaning less furnace maintenance costs and prolonging the life of your home heating system.
Figures released by the Energy Information Administration last week show demand for residual fuel in the US hit a peak of over three million barrels per day in the late 1970s. But demand has steadily declined since then. Between 2000 and 2010, average annual residual fuel use nearly halved to 500,000 barrels a day. It averaged nearly three times that in the 1940s and 1950s.
“As its name implies, residual fuel oil is the remaining fraction resulting from the crude oil refining process,” the EIA said. “Because residual fuel is a heavy product, it has limited uses and relatively high emissions.”
Part of the reason for the falloff in residual fuel demand relates to more stringent air emission restrictions. Earlier this year New York mayor Michael Bloomberg announced the city would phase out dirty heating oil by 2030. The city is encouraging building owners to switch their heating systems to run on natural gas or low-sulfur number 2 heating oil.
Another reason for declining residual fuel use is the boom in natural gas. This has seen natural gas prices fall and a corresponding increase in gas-generated electricity plants.
Meanwhile, the supply of residual fuel oil from domestic refining has also declined. Lighter petroleum products such as gasoline and ultra low sulfur distillate command higher prices than residual oil so refineries have moved to products that can maximize their return.
Finally, since 2008 the US has been exporting more residual fuel oil than it imports, thanks to burgeoning demand for cheaper energy fuel products in developing economies.
Distillate Reserves Take Record Hit
US distillate inventories tumbled six million barrels last week in their biggest fall since 2004. (image: flickr.com)
National reserve inventories of heating oil and diesel have just taken their biggest weekly hit since 2004, Bloomberg reported.
The surprise six million barrel distillate draw-down, which sent oil prices even higher last week, was revealed in the Energy Information Administration’s weekly inventory data report. But it comes at a time when Northeast distillate supplies, which include heating oil and diesel, are already well below average. And average residential heating oil prices are now 80 cents a barrel more than they were 12 months ago, with prices forecast to rise even further this winter.
In its Heating Oil Watch report, the EIA says East Coast distillate inventories typically build to a peak in November to help meet winter demand in December, January and February. However they have been declining since the end of August and are now 11 percent below their five-year average. The Northeast is the nation’s biggest heating oil market, with millions of homes reliant on fuel oil for warmth during the harsh winter heating season.
The EIA attributes this year’s lower stocks largely to foreign export demand, with Europe and Latin America leading the charge. The US exported a record 895,000 barrels per day of distillate fuel in August, the most recent month data is available for. Distillate exports from the East Coast have increased 59 percent (33,000 bbl/d) between January and August compared to the same period last year.
While East Coast distillate inventories are tracking lower, Gulf Coast inventories are still quite high, meaning total US stocks are “more comfortable than East Coast data alone would suggest,” the EIA said. But with limited spare pipeline capacity between the Gulf Coast and Northeast, the most likely method to move oil domestically between the regions is by sea, which is slow and expensive, adding more cost to struggling oil users in North Eastern states.
But the EIA said overall, inventories were “adequate” as we head into winter. The US residential heating oil markets was shrinking, meaning less reserve stock was needed to meet forecast heating demand from homes. This was backed up by the International Energy Agency, which said Friday that the US and other industrialized countries were using less heating oil, reducing the impact of cold weather on demand. The number of households in the US Northeast using fuel oil had dropped 20 percent since 2003, the IEA said.
Tips to Reduce Your Winter Heating Oil Bill
With winter just around the corner, it's time to make your home more energy efficient in order to reduce winter heating oil costs. (image: ohiosbestrealestate.com)
Winter is just around the corner and heating oil costs are again forecast to rise. But heatingnews.org has offered up a bunch of simple steps homeowners can take right now to help keep their energy bills in check.
Tuning up your oil burner in an annual maintenance check keeps existing heating systems in peak condition and ensures they’re running efficiently. The US Department of Energy says properly serviced boilers and furnaces burn less fuel, reducing heating costs by up to 10 percent. Annual checks are relatively cheap. The cost of a system tune-up is usually recouped through energy savings during the course of a typical winter.
“Tuning up their heating system before the winter arrives is a great way for consumers to lower their heating costs, conserve energy, and help the environment,” Energy Communications Council (ECC), spokesman Kevin Rooney said.
“Just as a failure to perform regular maintenance on the family car lowers miles per gallon and uses more gasoline, the same theory also applies to the family’s heating system.”
But regular boiler tune-ups are just one way homeowners and businesses can save money this winter. Heatingnews.org also recommends wrapping pipes with proper insulation to prevent heat loss or freezing, eliminating gaps around windows and doors with caulking and replacing manual thermostats with programmable models.
Though more expensive, it’s also worth considering replacing your boiler system with a new model if it’s more than 20 years’ old. ECC says today’s oil furnaces are highly efficient. Investing in a new system can lower heating bills for years to come, and depending on the system, pay for itself in just a few years.
And because the newest systems are so advanced in fuel conservation, they also help homeowners to help the environment by shrinking your family’s carbon footprint.
Many heating oil dealers offer automatic delivery based on customers’ usage. But consumers should also consider the financial benefits of a budget payment plan which spreads fuel oil costs across twelve months, rather than being hit with higher bills during winter. This enables homeowners to anticipate their monthly bills and budget accordingly.
“Many oil heat consumers across the country use budget billing because they like the convenience and certainty of having one heating expense figure to plug into their monthly home or business budget,” Rooney said.
TIPS TO SAVE MONEY THIS WINTER
Book in an annual heating system tune-up with your oil dealer to ensure your boiler or furnace is running to maximum efficiency.
Open shades and drapes when the sun is shining to help warm your home. Close them when the sun goes down to reduce heat loss through drafty windows.
Turn down the thermostat at night and when you are away from home so you don’t waste energy.
Insulate pipes to guard against heat loss and prevent freezing.
Eliminate gaps around windows and door with caulking to prevent heat escaping.
Close your kitchen vent, fireplace damper and closet doors, and remove, cover or close air conditioning units and vents when not in use.
Don’t place furniture in front of radiators as it blocks heat from circulating.
Consider replacing heating systems that are more than 20 years old. Modern versions can cut heating costs by 15 to 25 percent.
Talk to your heating fuel supplier about installing a programmable thermostat. It will pay for itself through lower energy costs in about a year.
Ensure your home is properly insulated.
For more information on practical energy saving tips, contact your local heating oil dealer, your state or regional heating oil association, or visit www.heatingnews.org and www.oilheatamerica.com.
New Campaign Targets Maine Heating Oil Tanks
A properly maintained heating oil tank is less likely to corrode and leak. (image; seattletimes.nwsource.com)
Homeowners who rely on heating oil during winter are being targeted by a new campaign promoting oil tank maintenance to help prevent costly spills, bangordaily.com reports.
The Maine Department of Environmental Protection (DEP) is warning heating oil customers that deteriorating oil tanks can cause environmental damage, health risks and hit homeowners hard in the pocket.
A new television awareness campaign was launched this month. It features emergency spill responder Lee Thomas warning viewers to have their tank’s thickness tested annually by heating oil company technicians or replaced with a double bottom tank.
About three-quarters of Maine’s homes rely on fuel oil for home heating – making it the nation’s biggest heating oil-using state. Maine has about 400,000 residential heating oil tanks in use, according to the DEP.
And though heating oil is non-combustible and relatively clean-burning thanks to low-sulfur standards mandated in many US states, internal corrosion from water and sludge build-up is a leading cause of leaks.
Oil leaks can have serious environmental and health ramifications if it seeps into soil and contaminates water sources. As heating oil is considered a hazardous material, spills have to be cleaned up according to stringent environmental standards, often requiring the excavation of large areas of contaminated earth. A home heating oil spill can cost a homeowner upwards of $50,000 to fix.
It’s best to pick up problems early, before they become costly disasters. But corrosion tends to destroy a tank from the inside out, so the damage often goes unnoticed by the homeowners until a “catastrophic tank failure” occurs.
Maine’s DEP Division of Response Services responds to about one spill a day from residential tanks – adding up to $2 million to the state’s annual Groundwater Oil Clean-Up Fund costs.
“The purpose of this campaign is to bring people’s awareness to their tanks and what may be happening inside of them before it’s too late,” said DEP senior engineer David McCaskill. “By taking care of your tank, you’re protecting our environment, your family’s health and your pocketbook.”
Many oil dealers employ licensed technicians who can perform ultrasonic thickness tests on tanks to determine if they are deteriorating and if so, recommend a replacement before the tank fails.
Heating oil spills are also caused by external tank damage – usually from falling ice and snow snapping off filters – or from overfilling.
A licensed oil technician can help you prevent such problems by installing a filter protector and vent whistle, which sounds until a tank is full.
To see the television campaign or for more information, visit www.maine.gov/dep and click on “Residential Tank Safety”.
Flooding Triggers Heating Oil Tank Collapse
An unknown quantity of fuel oil spilled from seven large tanks when a heating oil company in Pennsylvania was hit by severe flooding. (image: republicanherald.com)
Severe flooding has caused another heating oil tank spill, this time in Pennsylvania.
Seven large tanks at Duke Heating Oil, Shamokin, collapsed overnight on Thursday, apparently after rising floodwaters washed out their foundation, republicanherald.com reported.
Neighbors are complaining of an oil smell in the area following the rupture, but it is not know how much oil may have leaked from the tanks. Duke Heating Oil filed for bankruptcy earlier this year after failing to deliver to customers receiving federal fuel aid assistance and missing pre-paid oil contract deliveries. The company is not believed to have been operating last week.
The spill comes just weeks after thousands of gallons of oil leaked into the Ramapo River from New Jersey heating oil company SOS XTreme Comfort. The company was inundated with raging floodwaters when a dam breached upriver in Arden, New York State during Hurricane Irene. Environmental protection officials were testing water supplies for possible contamination.
Josh Lenker, 35, who lives a few hundred yards away from the Duke Heating Oil site in Northumberland County, said he heard “something like metal screeching or scraping” about 3am Thursday. The next morning he and son Owen went to survey damage after the flooding.
I was mainly looking at the water; all of a sudden, that’s when I realized I smelled oil and I looked over and all the tanks were on their side.
The tanks were partly submerged in the flooded Shamokin Creek after it overflowed following four days of heavy rain, which triggered widespread flooding in Northumberland County. Though there was no obvious accumulation of oil, Lenker said the oil smell was “pretty strong” near the Duke property, and could also be detected at his home.
Heating oil is considered a hazardous substance and spills have to be cleaned up by Hazmat officials according to strict environmental regulations.
Spectacular Rhode Island Heating Oil Spill
A roading contractor accidentally sliced through a high pressure heating oil pipe, sending oil fuel spurting three stories into the air in East Providence. (image: telegraph.co.uk)
At least 56,000 gallons of home heating oil spurted three stories into the air, gushing onto roofs, trees and into storm water drains, when a roading contractor accidentally ruptured a high-pressure pipe.
The incident happened Wednesday in East Providence when the construction worker severed the oil pipe with an excavator, projo.com reports. The 16-inch oil line is used to unload home-heating fuel from barges to the Capital Terminal Corp.
The East Providence Fire Department evacuated surrounding businesses after receiving a 911 call about the spill. Construction crews were building a new road near the city’s waterfront. The $6.6-million project is managed by the state Department of Transportation and being built by Cardi Corp, whose contractor was operating the excavator.
The Coast Guard says a small amount of oil also entered the Seekonk River. The pipeline is due to be repaired this week.
“The outfall has been boomed, the oil contained, and crews will continue to monitor the area,” a Coast Guard statement said.
The 56,000 gallon spill is more than twice the size of initial estimates last week. About 20,000 gallons had been recovered as of Thursday. The Coast Guard also said as much as 108,000 gallons of oil may still remain in the damaged pipeline. The exact amount will not be known until the pipe is repaired.
The state Department of Environmental Management, Coast Guard and Capital Terminal Corp. will supervise the repair and spill remediation work.
Heating oil is considered a hazardous material and spills must be cleaned up according to stringent state regulation by licensed professionals. The oil can cause environmental concerns and pose human health risks if it seeps into soil and waterways.
Heating oil spills or leaks from old corroded tanks can set homeowners back many thousands of dollars as the entire tank often needs removing along with large areas of contaminated soil.
Meanwhile, New Jersey officials are still testing water supplies following a heating oil spill in New York State. Up to 5000 gallons of oil flowed into the Ramapo River after XTreme Comfort heat fuel company was damaged by raging waters during Hurricane Irene.
Heating Oil Price Trend for September 1: No Change
Stockpiles of crude and heating oil posted strong builds last week, but a drastic dip in gasoline inventories leveled the market. (image: insight.yrcw.com and Nicholas Whitaker for HeatingOil.com)
Oil prices stayed put on Wednesday as the Department of Energy’s weekly stockpile report showed contradicting swings in gasoline and crude supplies. Heating oil price didn’t move while crude slipped a measly nine cents to finish at $88.81 a barrel on the New York Mercantile Exchange.
Analysts had expected oil inventories to build by 200,000 barrels – instead, they rose 5.3 million barrels. Gasoline, however, was expected to fall one million barrels and instead dropped by 2.8 million. Inventory decreases of any kind of petroleum product usually indicate strong demand levels, so the differing figures failed to push markets in either direction. Supplies of distillates, namely heating oil and diesel, climbed 400,000 barrels. The Energy Department also said refineries have slashed operations by 1.1%, slightly more than the 0.6% strategists predicted.
In economic indicators, ADP reported the U.S. added 91,000 jobs in the private sector, falling slightly short of the 100,000 economists had forecast. The news wasn’t enough to move oil markets either, but traders are anxiously awaiting the Bureau of Labor Statistics nonfarm payroll report due out on Friday.
And, with millions of Americans still piecing their lives and homes back together after Hurricane Irene, traders are keeping an eye on two more possibly threatening storms. Tropical Storm Katia is brewing far out in the Atlantic and could become problematic if it strengthens and swings towards the Gulf, a hotbed of oil rigs. The National Hurricane Center also identified a “tropical wave” in the Caribbean Sea they believe has a small chance of becoming a hurricane within the next two days.
The average retail heating oil price in the Northeast is unchanged from Wednesday’s average price.
Hurricane Causes New Jersey Heating Oil Spill
A burst dam in New York State sent a wall of water slamming into a riverside heating oil company, damaging tankers and causing a spill of several thousand gallons. (image: John Moore/Getty Images via propublica.org)
New Jersey officials are testing water supplies for possible contamination after a heating oil company was inundated with flood waters during Hurricane Irene, northjersey.com reported.
Heating oil flowed into the Ramapo River when several oil tankers at Tuxedo’s SOS XTreme Comfort were damaged after a dam breached upriver in Arden, New York State.
New Jersey Department of Environmental Protection spokesman Larry Hajna said Tuesday that between 3000 and 5000 gallons are thought to have leaked after the riverside facility was severely damaged at the weekend.
Hazmat officials were at the site this week directing the clean-up. The New York Department of Environmental Conservation is conducting an official spill assessment.
Though Oakland Mayor John Szabo said it was unlikely the city’s wells had been infiltrated, officials had begun monitoring the water system and would retest it next week.
“We haven’t had a chance to assess the broader impact” to wildlife, he said. “The flooding itself is catastrophic enough and this just makes it worse.”
Mahwah residents were asked to conserve water and the borough shut down six wells as a precaution. River-goers have complained of strong fumes with reports of dead fish and oil coated animals washing up along its banks, Mahwah police chief James Batelli said.
“Where the river recedes, it’s leaving pools of standing water that we are getting reports of sheen and an odor,” he said.
Fuel company owner Jeffrey Spiegel issued an apology to residents downriver but said the 30,000-gallon facility was storing only a small amount of oil at the time of the spill, northjersey.com reported.
Tankers used to transport diesel and home heating oil were swept up by the weekend current, which sent an “eight foot wall of water down the river,” he said. One truck slammed into a pipe connected to a 250,000-gallon storage tank.
The company was still trying to determine the size of the spill. It had operated the Tuxedo facility since 1976 and had never experienced such extensive flooding.
Spiegel said the company “did what we thought was sufficient based on the water level we’ve seen in five or six previous floods over the last 30 years.”
It would have been nice if we could have forecast the dam breaking, but if it was not for the dam break, those trucks would be fine.
Sierra Club spokesman Jeff Tittel said the spill highlighted the need for regulations prohibiting gas stations and hazardous material storage facilities in environmentally susceptible areas.
Heating Oil Price Trend for August 18: +3¢
Strategists have turned their eye on gasoline, since supply and demand levels for America’s most widely used petroleum product can influence global oil demand and pricing trends. (image: fortbendnow.com and Nicholas Whitaker for HeatingOil.com)
Oil prices posted moderate gains on Wednesday as U.S. gasoline stockpiles dropped more than analysts expected, inspiring trader confidence in U.S. demand levels. Heating oil prices rose three cents and crude advanced 93 cents to finish at $87.58 a barrel on the New York Mercantile Exchange.
Strategists anticipated the Energy Information Administration’s weekly inventory report to show a 2.3 million barrel decline in gasoline supplies; instead it dropped by 3.5 million barrels. The report overwhelmed lackluster supply updates for distillates, namely heating oil and diesel, which were expected to increase by 700,000 barrels but instead spiked by 2.4 million barrels.
The EIA also noted the number of actively drilling oil rigs in the U.S. has been steadily climbing for three years and recently passed the 1,000 mark.
Oil also got a boost from investors looking to get in on the action before September contracts expire. And, traders are monitoring refinery activity in case operators decide to cut down on production instead of working to full capacity. Unusually sluggish U.S. summer fuel demand coupled with slow global manufacturing activity will likely keep oil in check. Without much significant action driving markets, prices are expected to retreat back to the $85 a barrel mark.
The average retail heating oil price in the Northeast is three cents higher than Wednesday’s average price.
Heating Oil Price Trend for August 11: +10¢
Strategists severely miscalculated this week’s changes in U.S. oil supplies, boosting prices on everything from heating oil to diesel and gasoline. (image: ehow.com and Nicholas Whitaker for HeatingOil.com)
Oil prices spiked on Wednesday as the Department of Energy’s weekly stockpile report showed U.S. fuel demand may not be weakening after all, despite the whirlwind of economic woes. In the first gains in three days, heating oil prices jumped ten cents and crude climbed $3.59 to finish at $82.89 a barrel on the New York Mercantile Exchange.
After weeks of lousy financial news culminating in the U.S. debt downgrade and Europe’s sovereign debt crisis, oil markets caught a break from the government’s weekly supply briefing. Analysts were expecting supplies to build by 1.8 million barrels, but instead they dropped 5.2 million barrels. Refineries even recorded boosts in operation, a solid sign that demand from the world’s largest oil consumer isn’t drying up as many traders feared. Inventories of distillates like diesel and heating oil fell by 700,000 barrels.
Notably, both OPEC and the International Energy Agency adjusted their 2011 forecasts for global oil demand, slashing their original figures by 60,000 barrels a day. Analysts expect high fuel demand from Japan over the next several months, one factor in determining this year’s global demand – currently, we’re averaging 89.5 million barrels a day. Looking further down the line, the Paris-based IEA raised its projection for 2012 by 70,000 barrels a day, putting estimates for total global demand for 2012 around 91.1 million barrels a day.
The average retail heating oil price in the Northeast is ten cents more than Wednesday’s average price.
Heating Oil Price Trend for July 28: -3¢
A refinery in California, which will cut operations by 2%. (image: treehugger.com and Nicholas Whitaker for HeatingOil.com)
The Department of Energy’s weekly inventory report pushed oil prices down on Wednesday, as the first deliveries from the IEA’s release of emergency reserves finally hit the market. Heating oil lost three cents and crude dropped $1.42 to settle at $98.17 a barrel on the NYMEX.
The DoE’s Energy Information Administration said oil stockpiles fell 2.3 million barrels, notably more than the 1.4 million barrels analysts had predicted. In an unexpected move, refineries decided to slightly reduce operations and are now operating at 88.3% of capacity.
The International Energy Agency’s controversial decision last month to release 60 million barrels of strategic reserves, 30 million of that coming from the U.S., came into effect as the first deliveries entered the market. A majority of the tapped reserves will be released next month. Investors believe it’s far too soon to tell whether the move will effectively lower oil prices for consumers.
Traders are keeping close watch on the U.S. debt ceiling situation as it becomes increasingly probable the country’s credit rating will be downgraded from AAA to AA. A downgrade, coupled with a default on financial obligations, could cripple the global economy and be disastrous to U.S. recovery efforts. More negative economic news came from a Commerce Department report showing an unexpected drop in durable good orders and manufacturing last month. A weak economy usually means weak oil demand, and doesn’t inspire large buy-ins.
The average retail heating oil price in the Northeast is three cents less than Wednesday’s average price.
Heating Oil Price Trend for July 21: +2¢
Strategists underestimated declines in oil inventories again this week, giving prices a slight boost. However, supply levels of distillates like heating oil and diesel, rose to balance the market. (image: topnews.in and Nicholas Whitaker for HeatingOil.com)
The Department of Energy’s weekly stockpile report influenced oil prices once again this week, as heating oil climbed two cents and crude jumped 64 cents to finish at $98.14 a barrel on the NYMEX on Wednesday.
The DOE’s weekly update showed U.S. oil supplies dropped 3.7 million barrels last week, far more than the 1.3 million barrels initially predicted. Traders often take cues from crude supply reports, which reflect supply and demand levels. The news probably would’ve pushed prices higher, but an increase in inventories of refined products brought some balance: stockpiles of distillates like diesel and heating oil hiked 3.4 million barrels.
Over the past several weeks, traders have been juggling concern about America’s economic recovery and debt ceiling issue, and Europe’s potentially contagious debt crisis, and not many are placing big bets on high petroleum product prices. As a result, oil futures have kept a tight range between $92 and $100 a barrel on the NYMEX for nearly a month.
Investors are anxiously awaiting to hear the outcome of Thursday’s meeting of top European leaders, who will collaborate on a plan for the second wave of bailout measures for Greece and discuss ways to keep the financial crisis from weakening European banks and overall economy. The value of the euro hangs in the balance, a factor that could heavily affect oil markets.
The average retail heating oil price in the Northeast is two cents higher than Wednesday’s average price.
Canada Mandates Minimum Biofuel Requirements for Heating Oil
Canada has moved to enforce minimum biofuel requirements in heating oil and diesel in a bid to cut carbon emissions and boost the nation's biofuel industry. (image: pdphoto.org)
Heating oil and diesel sold in Canada must contain at least 2 percent biofuel content from this month under a new government mandate, platts.com reported.
The move was formally announced late last month by Canadian Environment Minister Peter Kent. The mandate aims to help reduce the country’s greenhouse gas emissions by 17 percent by 2020 compared to 2005 levels.
“Our Government will continue to ensure that protecting our environment, while balancing economic growth and prosperity remains our priority,” he said.
The moves follow regulations requiring all gasoline sold in Canada to have a 5 percent average renewable fuel content, which came into effect in December 2010. The new biofuel requirements are expected to reduce harmful emissions by the equivalent of removing one million cars from the roads.
However Kent said the benefits went beyond just the environment. Mandating minimum renewable fuel contents would also strengthen the nation’s biofuel industry, boosting demand for feed stocks like canola and ensuring a stronger bottom line for farmers, castlegarsource.com reported.
“These regulations will also generate more than environmental benefits. As an important part of the [federal] government’s Renewable Fuels Strategy, they will establish a demand for renewable fuels to help stimulate the Canadian biofuels industry,” he said.
Several US states and cities have already introduced biofuel requirements for heating oil and diesel in a bid to limit harmful emissions and reduce the nation’s reliance on foreign oil imports.
Earlier this year US President Barack Obama signalled that renewable fuels and sustainable energy policies would play a key role in America’s future energy needs.
Though Canada’s new biofuel requirements took effect from July 1, heating distillate oil sold in Newfoundland and Labrador is permanently exempt because of logistical challenges blending biodiesel, a statement by Environment Canada said. Temporary exemptions also apply to Quebec and Atlantic provinces until December 31, 2012.
“This 18-month period will allow eastern refiners time to install biodiesel blending infrastructure,” the statement said.
However the new requirements have stirred controversy. Canadian Trucking Alliance spokesman Stephen Laskowski said the new rules pandered to the interests of the agricultural industry and biofuel producers, but would result in higher diesel fuel costs.
Ottawa’s National Renewable Diesel Demonstration Initiative highlighted unresolved issues related to fuel technology, infrastructure readiness and market acceptance, and warned that a blending capacity shortage meant 85 percent of the biodiesel would have to be imported.
As world oil prices rise and environmental concerns take on increasing importance, renewable energy such as biofuels will become critical to support global energy needs.
Heating oil dealers and customers stand to benefit if clearer burning, quality biofuels are readily available, as they can prolong the life of a homeowner’s oil furnace, making if more efficient.
Heating Oil Price Trend for July 14: +1¢
Oil storage tanks in Alaska. U.S. supplies fell a million barrels more than analysts predicted last week. (image: innersource.com and Nicholas Whitaker for HeatingOil.com)
Oil prices posted marginal gains on Wednesday as the Energy Information Administration’s weekly report showed a steep decline in U.S. stockpiles and the dollar remained weak against the euro. Heating oil climbed one cent and crude jumped 62¢ to settle at $98.05 on the NYMEX.
The dollar failed to bounce back from its original slip on Tuesday when members of the Federal Reserve and Chairman Ben Bernanke announced the central bank will seriously consider pursuing further economic stimulus measures if U.S. recovery continues at its current lackluster pace.
U.S. oil imports for the week averaged 9 million barrels a day, 854,000 barrels per day less than we took in the previous week. Also, officials offered some specifics on the 30 million barrels the U.S. will be tapping from emergency reserves: 7 million will be released this month, the rest in August.
In other influential factors, the EIA’s weekly supply report revealed U.S. oil inventories declined by 3.1 million barrels, far more than the 2.1 million barrels analysts had forecasted. The news caused strategists to rethink outlook on lowered global demand, especially since the International Energy Agency predicted Japanese demand will be higher than expected this summer. The forecast is based on apprehensions about the security of the country’s nuclear reactors and the need to get them working again after March’s cataclysmic back-to-back earthquake and tsunami.
The average retail heating oil price in the Northeast is one cent higher than Wednesday’s average price.
Maine Heating Oil Users, Dealers Respond to IEA’s Release of Emergency Reserves
The next few weeks should tell whether the IEA and Obama's release of strategic reserves will steady the market and bring prices down. (image: treehugger.com)
The Obama administration, IEA members, and many market strategists are hopeful the IEA’s decision to release 60 million barrels of oil from strategic reserves last Thursday will boost the economy and bring prices down, but heating oil users and dealers in Maine aren’t celebrating just yet.
Spiking oil prices have many residents questioning whether they should pre-purchase heating oil or kerosene for next winter, and analysts have asserted the market has become increasingly difficult to forecast, the Bangor Daily News reported. While it’s generally agreed that something must be done, they aren’t confident tapping emergency reserves is much of a solution.
“It is an emergency reserve that was not intended to be a manipulator of the marketplace,” said Jamie Py, a member of the Maine Energy Marketers Association. “You reduce the price by putting more oil on the marketplace, but we have to replenish the reserves. It’s kind of like printing money.”
Some dealers have stopped offering cap and lock-in pricing plans altogether. These plans are particularly risky in a volatile market, for both consumers and dealers: consumers can get burned by locking in a price and then watching the daily cost plummet, and dealers struggling to set an appropriate cap run the risk of getting burned on the market or angering customers.
“Everything’s unpredictable,” commented one oil company owner in the Bangor area. “If we’d [offered a fixed-price plan] two years ago, everybody would have gotten burned.”
Many also expressed skepticism over whether tapping the reserves will hold any positive long-term effects, especially since the U.S. alone typically burns through 60 million barrels in just three days.
“It’s hard to look into the crystal ball and guess what prices will be in weeks or months from now,” said Jeffrey Marks, deputy director of Governor Paul LePage’s Office of Energy Independence and Security. “The Obama administration and others felt it was necessary to tap into the strategic petroleum reserve to improve the economy and push prices lower for transportation and heating fuels. I think it’s a short term fix.”
Chinese Drought Drives Demand for Diesel and Heating Oil
China's Yangtze delta area is caught in the worst flood in 50 years, triggering fears of hydro-electricity-generated power shortages this summer. (image: smh.com)
This week’s US oil inventory figures showed big builds for crude and gasoline but further draw-downs in distillates, which include heating oil and diesel. So why is demand persisting for heating fuel when temperatures are warming? The answer may be linked to diesel demand and severe drought conditions on the other side of the world.
As previously reported on HeatingOil.com, heating oil and diesel are almost identical in physical composition. But as diesel in not traded on commodity markets, heating oil contracts are often bought and sold as a proxy for diesel by investors and hedgers.
A freezing winter in the US triggered heavy demand for heating oil, resulting in big draw-downs of distillate reserves. This partly explains why distillate stocks are currently at their lowest levels in two years. But they traditionally build during spring and summer with warmer conditions.
Meanwhile, China is suffering its worst drought in 50 years. Severe resulting water shortages are forcing authorities to prioritize water for human consumption rather than to power massive hydro-electricity plants. The upshot is warnings of power shortages this summer in the Yangtze delta, which supports 400 million people with 40 percent of China’s economic activity, futuresmag.com reported.
Water shortages are forcing Chinese authorities to draw millions of litres of water from the Three Gorges Dam to ensure citizens have enough water for drinking and food. (image: chinahighlights.com)
Experts here in the US fear high oil prices are slowing economic growth and denting demand for oil products, as evidence by gloomy economic reports in recent months and rising crude and gasoline stocks.
But in China, diesel demand is expected to rocket as millions of businesses and homes switch to oil-burning generators to replace electricity. The economic power house has already halted diesel exports to help bolster domestic supplies. This has the potential to create shortages elsewhere, boosting diesel demand and making heating oil more attractive to investors, perhaps explaining why distillate stocks remain low.
“For heating oil traders, [the looming Chinese power crisis] was another sign that demand for diesel will be higher than anticipated,” futuresmag.com reported. “Factories will look to diesel generators to lessen the impact from power shortages and rolling blackouts. They will also be competing with India for supply.”
The Wall Street Journal reports that diesel demand from China may eclipse falling oil demand in the US and potentially lead prices even higher, though one analyst said it was difficult to judge which of the two opposing forces would prevail. Whether bullish Chinese demand or lackluster US oil usage is the stronger force could determine the direction of global oil prices in the second half of this year.
“Chinese diesel shortages could, by themselves, mitigate all of the weakness possibly emanating from the OECD due to higher prices and still tighten global balances further,” said analysts at Barclays Capital.
Added to this uncertainly is the effect of commodity speculators on world oil prices and delays in federal regulators implementing new position limits to reign in Wall Street trading activity. All this leaves heating oil customers and dealers still paying near-record prices at the whim of factors well beyond their control.
