Written on: November 21, 2021 by Paul J. Nazzaro
No one enjoys or embraces change. It would be great if we could continue to buy and sell carbon-based fuel for the next few decades and not have to learn a new pitch to share with our customers, but the status quo is clearly not sustainable. Even the most resistant to change out there knows that—so, now what? What does this new roadmap of energy and policy being championed by our political leaders mean to us?
Our lives have been turned upside down since March 2020. The COVID-19 pandemic forced us into seclusion and redirected how we would lead our families and manage our respective businesses and careers. During this time, we learned to adapt. We figured out that many of us could be disciplined and productive working from a sliver of space in our homes. The result was momentum toward a more collaborative world order that rested on an increasingly connected global economy, one facilitated by the internet and lower-cost communication, advances in transportation and the flows of capital, skills, knowledge and people.
However, the momentum is now going in reverse. Our spaces have become more splintered, with a resurgence of distrust, competition for power and the rising politics of suspicion and resentment. Globalization doesn’t go away, but becomes more fragmented and contentious, adding to the troubles along the already-troubled path to economic growth and the need to achieve net zero, yesterday.
Before COVID-19 struck, the global economy was on fire. Anticipated growth within the next five years was well on its way to $100 trillion. Unfortunately, the world economy is now tormented by lives thrown into disarray. Small businesses everywhere are fighting for survival. Companies of all sizes are under severe pressure. Less-developed countries and developing nations have become even further impoverished, with hope evaporating for many, while even the most advanced governments are stretched to the extreme by debt and a huge loss of economic output.
The U.S. appears to be decades away from resuming normalcy, and that is assuming vaccines now in play are effective and sustainable. If not, then resuming business as usual will continue to be challenged by hesitancy and suspicion.
An alternate reality
Behaviors have been altered by this continuing COVID-19 challenge, and whether this psychological phenomenon can ever return to its previous state remains to be seen. At least for a time, there will be apprehension to return to large groups, which has already forced me to cancel not one but three XBX educational seminars sponsored by the National Biodiesel Board and its stakeholders.
This fear of gathering in close quarters is not just affecting people’s willingness to attend events, either. Carpooling and public transportation may go the way of the dinosaur, at least in the near term, while people revert to driving their own cars fueled by gasoline or coal-powered electricity subsidized with a small percent of wind or solar energy.
Work need not be concentrated in offices anymore either, as many companies have demonstrated that they can operate successfully from home offices, equipped with all the amenities of the office plus a couch for deep thinking after lunch, barking dogs or a wandering child here or there in the background. Time spent commuting can be reduced. Business meetings can be replaced, successfully or otherwise, with virtual connection. This impact will last long after lockdowns are in our rearview mirrors.
Oil’s role will be challenged by these shifts in behavior, work and daily life. It will, however, take a few years, post-vaccine, to understand the lasting impact on business and leisure travel, education, commuting and whether the office of the future will remain at home. If so, it will be important for people to work from home, but not live at work.
The current environment in which we all exist will continue to impact politics at home and abroad as well. The divide between nations will become more apparent and working together will become more difficult with a fractured global community.
A sign of these challenges can be seen every day with the widely publicized supply chain shortages. As we go to press, container ships anchored offshore, loaded high with products that are not on store shelves, are getting more and more backed up by the hour due to the lack of human resources needed to offload them and restore the supply chain.
Energy—particularly oil, gas and renewables—will continue to be an integral part of the new geopolitics in life after COVID-19, as hard as post-COVID life might be to even think of right now. While many of my industry associates struggle with keeping ahead of those legislators who are interested in electrifying everything, I choose to continue protecting market share by revealing the benefits of low-carbon liquid fuels.
Whether the discussion centers on biodiesel, renewable diesel or products yet-to-be determined, we still have an opportunity to protect and defend our businesses with these cleaner liquid fuels. If you wish to discuss electricity, hydrogen, wind and solar, then you can—but those “clean” fuels are not being hauled in your shiny aluminum tank wagons that navigate your local delivery markets. What you haul is liquid, and honestly it should be Bioheat® fuel, not generic No. 2 home heating oil.
Will the COVID-19 crisis accelerate an energy transition or slow it? Many argue for a Green recovery, with regional and national governments’ spending focused on climate-friendly infrastructure and greater support for renewables, electric vehicles and air source heat pumps. For local governments, Green and cleaner air become their rationale for restricting diesel trucks and gasoline vehicles.
The expeditious time frame to “Green up” remains unrealistic in many cases. The sheer scale of the energy infrastructure that supports our supply and demand, the need for reliability, the demand for renewables and the disruptions and conflicts that would result from speed is being disregarded in many ways.
As PADD I (Petroleum Administration for Defense Districts I—a.k.a. the U.S. East Coast) is the epicenter of home heating supply and distribution, we can intelligently evaluate available assets and make progressive improvements to prepare for the ever-increasing volume of low-carbon fuel, which will be a prerequisite for our collective survival. However, to achieve our goals, we need to accelerate communications with our customers and advise them why we are now delivering Bioheat® fuel.
At the same time, we need to press our local legislators with our story that no conversions to heat pumps are required to achieve the goals they are seeking. We have a product and are well in motion to incrementally increase volumes over the next decade to be defined, not just by ourselves but by others, as clean-fuel merchants.
All the confusion and unrest that we manage every day, individually and collectively, is what it is, as the saying goes. We seem to always figure out how to turn challenges into opportunities; however, this decade-plus long transition to low-carbon Bioheat® fuel simply is perplexing to me. What’s it going to take to convince the fence-sitters to move their trucks into the clean-heat rack position and abandon the carbon-intensive liquid, which is the same fossil-derived energy source that is pushing politicians to accelerate their efforts to jettison homeowners into installing air source heat pumps? To go one step further, do your customers really deserve to be purchasing a fuel that is on the government’s most- wanted list? I think not.
It can’t be said enough, if you are one of those naysayers who simply refuses to adopt this industry transition to clean liquid heat, you’re hurting yourself, your family, your customers and, if it matters, the industry at large. Whatever your per-gallon profit margin selling carbon-based fuels is today, multiply it by “0” because that’s what you’ll be making on a gallon of carbon that is being regulated out of business. Give Bioheat® fuel a chance and increase the odds that you will be keeping people warm for decades to come. ICM