OP-ED: City heading in wrong direction on heating-oil reform

Written on: February 10, 2017 by ICM

By Rocco Lacertosa, CEO–New York Oil Heating Association

More than 1 million households and businesses are using heating oil to stay warm this winter. Most heating oil companies trace their roots back several decades when their grandparents opened up small shops with one or two trucks on a neighborhood corner. It’s not uncommon for current owners to have driven a heating oil truck for many years before rising up the ranks in their family’s business.

The industry has provided steady union employment for thousands of New Yorkers and has worked to develop a career pipeline, establishing key relationships with the city’s vocational high schools including the Bronx Design and Construction Academy where high school students are trained to be heating oil service technicians. Even with the availability of natural gas and other pressures, the industry has managed to survive thanks to its embrace of cleaner fuel products and best practices.

Today’s heating oil is very different from the product that first emerged decades ago as a replacement for coal. For one, the fuel is exceptionally cleaner. The industry embraced efforts to substantially improve the product, first by dramatically reducing the sulfur levels of all grades of heating oil, then by phasing out residual fuel (also know as No. 6 oil) and most recently by increasing the percentage of renewable biodiesel. These efforts have combined to make New York City’s heating oil the cleanest in the United States. In fact, according to Brookhaven National Laboratories, B17 blends and higher, which include at least 17% renewable biodiesel, burns cleaner than natural gas.

Still, like all industries, we face challenges. A persistent threat against today’s hard-working heating oil companies are the bad apples. As clearly identified by a 2015 city investigation, these unscrupulous operators are almost always “fuel transporters” that deliver product on behalf of other companies but “short” the end-users by stealing oil and then re-selling it. No one wants these bottom-feeding transporters out of the industry more than the legitimate heating oil companies, and we applaud recent efforts to criminally prosecute them. It was long overdue.

However, much more needs to be done and, unfortunately, the city is heading in the wrong direction by supporting a piece of legislation, Intro. 1268, that imposes yet another regulator on the industry: the Business Integrity Commission. It would be the 14th agency to regulate our industry. This would be the kind of redundant overregulation that has forced countless other businesses to either hike the cost of their products to offset increased fees and fines, lay off workers or close altogether. It would do little to solve the problem and would result in higher heating oil costs for New York residents, businesses, nonprofits and city agencies, which are among the largest users of oil heat.

A better path forward would be to enact specific and lasting reforms, codify best practices and increase spot inspections on heating oil trucks—something the Department of Consumer Affairs, the industry’s chief regulator, once did regularly. These are relatively simple fixes that can be done through a combination of legislation and administrative actions.

For example, the United States Department of Homeland Security currently requires heating oil employees to obtain a Transportation Worker Identification Credential, or TWIC card, which requires an extensive background check. Let’s require fuel transport providers, who comprised the universe of bad apples uncovered in recent investigations, have TWIC cards if they don’t already. Let’s re-institute Consumer Affairs spot checks so inspectors can foil schemes and deter criminal activity. And let’s codify best practices and new technologies that ensure accountability and prevent fraud.

Consumers should expect their heating oil providers to be good and honest neighbors, to keep costs down and to deliver clean fuel that improves air quality and helps their community. The vast majority of providers are committed to these standards and are working hard every day to advance this great New York City industry. However, we need to be much smarter and more serious about eliminating fraud, particularly with fuel transporters, and in a way that is more effective and does not disenfranchise legitimate heating oil companies or their union employees who have a lot to lose if heating oil becomes too costly or if the business becomes too burdensome to operate.

Article courtesy of Crain’s New York Business