OK, New York’s State Senate hasn’t gotten as bad as Ukraine’s parliament—where the above scuffle took place—but emotions are high in the debate over low-sulfur heating oil. (image: upi.com)

New York’s State Senate passed a bill last Thursday that would lower the sulfur content of home heating oil, but the fighting over the legislation appears to be far from over. Opponents of the bill are looking ahead to the next election and attacking senators who supported the low-sulfur mandate, while the bill’s supporters accuse their opponents of being in the pocket of big oil.

Voters in Sen. Darrel Aubertine’s upstate district have received automated phone calls that tell them the bill—which Aubertine voted for—will raise their heating costs by $900 this winter, reports the Watertown Daily Times. He’s not the only senator facing opposition. Senator Suzi Oppenheimer of New York’s 37th District was criticized sharply by Senate candidate Bob Cohen, who called Oppenheimer’s vote “inexcusable” and claimed it could raise the cost of heating oil by as much as 90 cents per gallon, according to a press release found at NewRochelleTalk.com.

The figures used to attack the legislation come from a study by Hart Energy Consulting, says the Watertown Daily Times. The consulting firm predicted cost increases of 20 to 30 cents per gallon of heating oil, and said those increases could run as high as 60 to 90 cents per gallon.

Meanwhile, Senate Democrats worked to associate their Republican counterparts with the national villain of the moment, BP, pointing out that a lobbying group that opposed the low-sulfur bill had been hired by BP and Sunoco, Politico reports.

In a more substantive response to the furor over the low-sulfur heating oil bill, a spokesman for Sen. Aubertine, Andrew Mangione, refuted the assertions in the automated phone calls to the Daily Times and to The Valley News of Oswego County. Mangione rejected the idea that the low-sulfur requirements would raise heating costs:

This won’t do anything to your bill….The bill calls for the reduction of sulfur to make the fuel more efficient and it will save money.

Mangione went on to call the cited increase of $900 “a completely false number that seems to be made up.”

To support his counterclaim that lower sulfur content will actually save consumers money, Mangione pointed to the conclusions of the New York Oil Heating Association (NYOHA). In March the NYOHA president, John Maniscalco, co-authored an op-ed that said reducing the sulfur content of fuel would save $40 million in collective maintenance costs, and the increased efficiency of the cleaner fuel would save heating oil users an average of 4 percent on their heating bills.

Wherever low-sulfur fuel standards have been proposed, they have received the support of the heating oil industry. The New York bill would lower the sulfur content of home heating oil to 15 parts per million, the same standard already in place for on-road diesel. By bringing heating oil in line with the specifications of the much more plentiful and widely used low-sulfur diesel fuel, the supply and distribution networks for home heating oil will be much simplified and heating oil users will have access to a much larger supply of fuel, say proponents of low-sulfur heating oil like the energy company Mirabito in New York state and the Independent Connecticut Petroleum Association (ICPA).

Exactly what impact the bill—which hasn’t yet been signed into law—will have on heating oil prices can’t be determined with absolutely certainty. The debate seems to have pitted New York’s heating oil users against New York’s heating oil dealers, but in reality both groups would like to see lower prices. The average heating oil dealer is not like Exxon, and doesn’t profit from higher oil prices—higher prices simply mean they have to pay a higher wholesale price for heating oil, and then try to sell it at a higher retail price that makes it less desirable to consumers.

Star Gas, through its Petro subsidiary, was already the largest heating oil company in the nation, and now it has acquired Champion Energy. (image: star-gas.com, petro.com, championenergy.com)

Star Gas Partners is already the nation’s largest retailer of home heating oil through its subsidiaries Petro (Petroluem Heat and Power Inc.), Meenan, and Leffler Energy, but the company announced on Monday that it is expanding its heating oil division through the acquisition of Champion Energy Corporation.

Star Gas bought Champion for an estimated $61.5 million. Champion serves more than 45,000 heating oil customers, and with this purchase Star Gas extends its heating oil coverage into New Hampshire. Champion also operates in Connecticut, New York, Pennsylvania, Virginia, and Maryland.

Star Gas CEO Daniel Donovan spoke for the company about their acquisition of Champion:

We are very excited with the acquisition of Champion and look forward to working with their 300 motivated and dedicated employees…. We believe Champion is an excellent fit for Star and are eager to work with their management team. Champion’s companies are all local operations whose employees take great pride in the home heating services they have been offering their customers for many years. Under the Star banner, we expect these operations to continue following the same tradition of excellence in customer service.

Sales of home heating oil made up 79 percent of the total sales of Star Gas in fiscal year 2009, according to Reuters. By adding Champion Energy to its portfolio, the nation’s largest heating oil distributor further strengthened its heating oil division, growing even larger and extending its operations into new territory in the Northeast’s heating oil market.

Oil prices gained on economic optimism and a weak dollar on Thursday. (image: Nicholas Whitaker for HeatingOil.com)

A weak dollar supported higher oil prices on Thursday as the Federal Reserve’s pledge to keep interest rates near zero kept the US currency cheap. Since crude oil futures and heating oil futures are prices in dollars, a weak dollar makes them attractive investments for traders who hold other currencies, lifting demand for those commodities and propping up prices. Falling unemployment in Germany and a drop in unemployment claims in the US generated economic optimism, giving another push to oil prices on their upward swing. Some traders are concerned that oil prices are higher than supply and demand justify, though, and expect a significant price correction to bring oil prices lower.

Today’s average retail heating oil price in the Northeast is 3 cents higher than Thursday’s average price.

"The future of US energy is heating oil," said Pres. Obama to a rapt audience on the grounds of a NJ heating oil storage facility. (image: Nicholas Whitaker via heatingoil.com)

After yesterday’s announcement that the US would expand offshore oil drilling, President Barack Obama dropped another bombshell on the energy world by calling heating oil “the key to America’s future” and pledging to bring heating oil to 10 million more American homes by 2014. To demonstrate his determination on this score, Pres. Obama will be converting the White House to a heating oil system, and dug up the Rose Garden to install a brand-new, 1,000-gallon home heating oil tank. President Obama announced his ambitious plan at a heating oil storage facility in Landon, New Jersey.

As crowds cheered, the President explained the importance of heating oil:

We cannot afford to delay one more day in bringing the citizens of this country the safe, reliable, and affordable heating fuel they deserve. For too long this advance has been held up the partisan squabbles of the past—the time has come to move forward. Heating oil’s high efficiency, low emissions that are getting lower each year, and clear path to 100 percent renewable biodiesel content make it the finest heating fuel in the land. All of America deserves this fuel. We’re starting at the White House, but we’re on our way to your house!

The announcement provoked some flutter in the financial press, as journalists struggled to piece together how heating oil, a close cousin of “oil” oil, was producing so much activity on the trading floor, outperforming metals, gasoline, and crude. Searching for an industry expert willing to explain the frenzy, Bloomberg news could only find the Maine Governor’s Office of Energy Independence and Security:

In Maine, the President’s comments have created a phenomenon. Following the president’s announcement, our office has been flooded with calls from Mainers eager to switch to heating oil for their home heating needs. The excitement has unfortunately led to some unlawful activity in southern Maine, where a band of heating oil marauders is performing involuntary repairs on tanker trucks carrying diesel fuel, flooding the local market with supplies of no.2 oil.

President Obama’s announcement came as surprise to many Americans—especially residents of the West coast and South. Puzzled viewers of the president’s speech in those regions turned to the internet to find out what heating oil is, making “what is heating oil?” the most-searched phrase on Google’s US search engine.

The craze swept the nation in record time, with some citizens driven by their enthusiasm to begin clearing space in their basements and garages on Thursday afternoon to make room for a new heating oil tank.

Following his prepared remarks, the president took questions from the press, and offered some details of how his program, dubbed “Making America Cozier with Oil Heat.” Private citizens will be rewarded with rebates worth 40 percent of the cost of their new oil heat system, including tank and furnace or boiler. New users of heating oil will also receive their first fill-up of the fuel for free, thanks to a cooperative subsidy program administered through the Department of Energy and local state oil dealer associations.

Reached for comment on Air Force One after his speech, the president told HeatingOil.com, “I’m fired up to get more people on board with this great fuel, and I’ll need your help to do it. Keep the good work, and spread the word!”

VeruTEK’s soil remediation technology could make scenes like the one above, in which a heating oil tank and contaminated soil had to be removed, a thing of the past. (image: luzoninc.com)

A leak in a home heating oil tank can be a nightmare for a homeowner, and an expensive one at that. If the oil seeps into soil or groundwater the homeowner may be responsible for removing tons of contaminated soil along with the leaking tank. But a company in Connecticut has developed an environmentally friendly technology that can remediate soil without removing it, all by using natural ingredients that remove pollutants like oil from soil and groundwater.

VeruTEK Technologies, Inc. of Bloomfield, CT uses biodegradable extracts derived from sources such as oranges, tea leaves, red wine grapes, soybeans, and others that decontaminate soil or water that has been polluted by oil or toxins, reported the Hartford Business Journal on Monday. “Using simple material, we have a series of remediations,” said an EPA scientist collaborating with VeruTEK, Dr. Raj Varma. “Nature does it all the time.” ExxonMobil, Pfizer, and Dow Chemical are among the companies that have used VeruTEK products or services.

Douglas Anderson, the CFO of VeruTEK, says his company’s technology is more effective and considerably cheaper than traditional remediation. As with a technology that uses bacteria to aid soil remediation, VeruTEK’s product can be injected into affected soil in at least some cases and would not require anyone to leave their home while VeruTEK’s biodegradable product does its work, according to the company’s website.

Cleaning up a home heating spill could take as little as two days, VeruTEK claims. By lowering costs and shortening cleaning times, cutting-edge remediation technologies like VeruTEK’s could be heating oil users first choice in case of a leak.

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?