Many of you already know that I’ve been on the forefront of electronic payments and credit card processing for fuel dealers for the last two decades, most notably leading the charge that opened up access for the entire fuel industry to participate in the MasterCard Utility program.
I want to highlight a disturbing trend and urge the industry as a whole to immediately advocate for your interests to ensure a level playing field that enables credit card data portability. Most, if not all, oil and propane companies just assume when signing up with a payment vendor— and voluntarily choosing to run their customers’ credit card transactions through their payment provider—that all will go smoothly, which is often the case. However, what you don’t know is the actual data associated with the credit/debit cards is owned by the payment provider and/or the gateway company, not you. What does that mean to you at the end of the day?
Consider this recent scenario: Nick Warren, President of Arrow Fuel, a second-generation, family-run energy company located in Seekonk, MA, decided to switch payment providers as the additional efficiencies and cost savings derived from a new updated FinTech platform was just too appealing to pass up. This is what he had to say:
I’ve spent the past five years updating our company’s technology in pursuit of a better customer experience and more efficient back-office operations. The last piece of that puzzle was streamlining our credit card processing.
Over the last 13 years we have accumulated thousands of stored credit card tokens with two separate processing companies. The task of migrating my customers’ data to our new processing company has proved to be harder than finding qualified oil drivers.
I was told by one of my processing providers it would cost me thousands of dollars to rescue my own credit data and send it to my new payment provider.
To say the least, I was bewildered to hear this, as later I discovered it’s my data and I should have the right to transfer it in a secure PCI [payment card industry] compliant manner to any payment provider of my choice.
The situation was so unpleasant, out of principal I choose to no longer communicate with my outgoing processor, leaving my team with the arduous task of entering cardholder data for thousands of customers instead of negotiating with a company that was not acting in good faith.
As a business owner, I view it as necessary for me to put trust into my vendor relationships to run my business effectively. However, when a vendor acts in a self-serving manner because they were going to lose a customer, enough is enough. I am in the heating oil business, and my biggest blind spot is thinking other vendors would service their customers the same way we do. As a result, I was probably more naïve than I should have been, which ended up costing me a lot of aggravation and stress.
These types of unfortunate scenarios have been happening more and more and I have been receiving frequent phone calls from retail fuel dealers and vendors regarding credit card data and the right to port the information to a new vendor of choice.
In many cases, I’m hearing all kinds of prohibitive posturing by payment providers who are unnecessarily complicating the process, and in some cases, charging exorbitant fees as a means of restricting dealer choice. This is a disturbing and unethical business practice. Healthy client/vendor relationships are built on a foundation of trust and it is paramount the client’s best interests are always the No. 1 priority of the payment vendor.
I would be remiss not to interject that there are many professional payment providers that adhere to their client’s wishes, remain cooperative and assist in the data transfer process while ensuring it is conducted in a secure PCI compliant manner that properly protects the client’s credit card data. It is imperative that all payment providers put their clients first even if that means politely holding the door for them if they choose to move on.
Vendors not acting in the best interest of their clients can wreak havoc, causing unnecessary stress and expense, almost like a ransomware-type scenario that forces the client to buy their way out. Keep in mind we are talking about credit card data that ethically and rightfully belongs to the client in the first place. The data was entrusted to the payment provider so they could service the client, and now the very same data is being used against them. The inherent conflict of interest breaks the system down, exposing the client if their outgoing service provider transforms into a foe.
As a frame of reference:
Back in 2009, to protect consumers, Congress enacted The Credit Card Accountability Responsibility & Disclosure Act. It is a law enacted to protect consumers from unfair practices by credit card issuers by requiring more transparency in credit card terms and conditions. This included adding limits to charges and interest rates associated with credit card use.
In 2010, Braintree (at the time a leading technologist in the payment space), recognized the issue and addressed the problem by creating the Credit Card Data Portability initiative. It is an opt-in community of payment providers that agree to allow a merchant to port credit card and other associated information if the merchant decides to move to another provider. Their goal was simple, attract other like-minded professional payment providers to join in and participate for the benefit of not just the client, but the overall payment industry. Payment providers are encouraged to make all terms and conditions available upfront to the client, clearly indicating the payment provider’s willingness to transfer credit card data without incident or unjust fees. This initiative proved quite effective in the world of general credit card processing as it helped minimize vendor lock-in and promote free market principles of fair competition.
The time has come to level the playing field
All fuel dealers and payment providers need to come together to advocate on behalf of the heating fuel industry. Pledge details are currently being discussed at the State level and will report back soon.
As a payment professional advocating for retail heating fuels, I propose all payment providers pledge to exercise fair business practices that uniformly protect retail fuel dealers’ credit/debit card data and the ability to freely transfer such information. I call on all heating fuel retailers to advocate and support this pledge and come together as an industry. It’s time to level the playing field!
The Heating Fuel Dealers Credit Card Data Portability Pledge of 2022 personifies the industry’s commitment to standardize professional business practices amongst payment providers while protecting heating fuels dealers. Leveling the playing field creates a competitive marketplace that drives payment innovation and free agency, which are both critical attributes of a healthy market. ICM
Larry Richmond, is a Cashflow Automation Specialist and President of Richmond Financial Services (RFS). In 2005, Richmond successfully lobbied MasterCard to reclassify home heating retailers into the lower risk utility processing category resulting in billions of dollars of savings to the industry. Contact Richmond at 617-843-5700 x200 or by email at [email protected]
After a long pandemic-induced hiatus, the National Biodiesel Board’s popular Exploring Biodiesel Regional Seminars (XBX) are back and better than ever. We will be holding these highly informative one-day training seminars in Boston, MA, at the Boston Marriott Long Wharf on Sept. 23 and in Madison, WI, at the Madison Concourse Hotel Sept. 30.
These courses are designed to educate fuel wholesalers, distributors, retailers, marketers, fleets, municipalities and other end-users on the benefits and opportunities surrounding the integration of low-carbon liquid fuels—including biodiesel and renewable diesel— throughout the national supply chain.
Much has changed in the political, regulatory, petroleum and biofuel landscapes since we first started holding these events, but one thing has not: our commitment to bring the audience the very best, most up-to-date information and valuable perspective from a lineup of the field’s leading experts. Since we began offering these courses, carbon policies have swept through North America like the powerful weather events experts say are caused by climate change. Virtually all levels of government are considering or enacting legislation to cut carbon on a path toward net zero in the coming decades. Thankfully, low- carbon, renewable, liquid heating fuels such as biodiesel-blended heating oil, also known as Bioheat® fuel, can get us much of the way there on the heating side of the equation.
Bioheat® fuel not only accomplishes significant carbon reductions, but it does so while providing environmental stewardship, energy security, rural and urban economic development, health benefits, and a much greater degree of environmental justice for communities of color and lower-income populations than electricity-powered airsource heat pumps.
I am a supply-chain specialist at my core. Although the backdrop and drivers of renewable transportation and home-heating fuels are shifting, the fundamentals of sound supply- chain economics for on- and off-road fuels—whether distillates gasoline, compressed natural gas, propane, Bioheat® fuel or electricity—will still permeate the XBX discussion and be featured center-stage.
XBX Boston, Sept. 23
Consider XBX Boston the industry’s gateway to a successful 2021-2022 heating season and a portal to the future, giving those in attendance a glimpse of what to expect years from now and not how to simply catch the train there, but how to drive it.
The roster of speakers for the Boston event is truly a star-studded lineup—okay, as star- studded as fuel industry professionals can be, anyway. They are well known and highly respected individuals from solid organizations. The National Biodiesel Board, Massachusetts Energy Marketers Association, National Oilheat Research Alliance, Project Carbon Freedom, Global Companies, Sprague Energy and Gulf Oil will present a comprehensive program that will reveal the next steps of this incredible journey toward a lower-carbon future.
In addition, XBX Boston will feature Jennifer Weaver, NBB’s OEM market development manager; Michael Ferrante, president of the Massachusetts Energy Marketers Association; Joseph Uglietto, president of Diversified Energy Specialists; Michael Trunzo, director of government affairs for Shenker, Russo & Clark; Stephen Dodge, NBB’s director of state regulatory affairs; and Matt Herman, NBB’s director of environmental science. Together they will celebrate the industry’s progress in transitioning the heating sector to a sustainable future while laying out the challenges ahead.
From production through consumption, dealers will learn how strategic thinking and execution will ensure a sustainable future for low-carbon liquid home heat—and their respective businesses. Some of the topics to be covered in Boston include:
• Evolving supply-chain dynamics
• Low-carbon liquid fuels update
• OEM positioning on low-carbon liquid fuels
• End-use applications and operability information
• National policy initiatives
After the event, which runs from 9:00 am to 1:30 pm, an optional Boston Harbor cruise will take place afterwards from 3:00 pm to 5:00 pm.
Registration for XBX Boston is free for fuel dealers. Outside vendors who wish to attend will be placed on a waiting list and, if room allows, will be offered admission for $225. Proceeds from any vendor-registration fees will be donated to an education fund in memory of Matt Allen from W.H. Riley & Son. The optional harbor cruise is free for all registered XBX Boston attendees.
XBX Madison, Sept. 30
Through the generosity of the Wisconsin Soybean Marketing Board, Nebraska Soybean Checkoff and United Soybean Board, registration for XBX Madison is free and attendees are guaranteed a day of information that will reset expectations for growth.
The depth of coverage in Madison will be similar to Boston, noted in detail above, but tailored for the Badger State and surrounding region. Much more heating oil is consumed in Boston than in Wisconsin, however, so expect much of XBX Madison to focus on the transportation-fuels landscape, including:
• Evolving supply-chain dynamics
• Low-carbon liquid fuels update
• OEM positioning on low-carbon liquid fuels
• End-use applications and operability information
• National policy initiatives
• The clean-gasoline blueprint
“If fuel marketers in our region are looking for a report from the front lines of our industry’s battle for survival, this is it,” said Matthew Hauser, president and CEO of the Wisconsin Petroleum Marketers and Convenience Store Association. “Anti-carbon regulation is closing in on us from both coasts. Learn how to better position your business from industry experts who have a pulse on what’s working and what’s not.”
Bob Kenyon, vice president of sales and marketing for Renewable Energy Group—North America’s largest biodiesel producer and co-host of XBX Madison—called the event “the most comprehensive low-carbon liquid fuels educational seminar available anywhere in the nation. If you consume, market, trade or distribute liquid fuels, this is a can’t-miss event.”
Attendees can expect to gain valuable insight on how low-carbon liquid fuels can be leveraged not only as a cleaner burning, renewable alternative to diesel fuel, but as a means to increase market share and enhance the liquid fuels supply chain while providing end users with exceptional performance, efficiency, and cost benefits.
Joining us on stage in Madison will be NBB’s technical director Scott Fenwick and, once again, Jennifer Weaver, OEM market development manager for NBB. Together we will cover new and emerging policy initiatives, consumer trends, and potential pathways for organizations to move towards carbon neutrality while navigating the notable fuel challenges currently impacting diesel, gasoline, and heating-oil performance.
After the course, a tour of REG’s biodiesel production facility in nearby DeForest, Wisconsin, about 15 miles from Madison, is optional. The plant produces 20 million gallons of biodiesel a year. The event is free to attendees and a catered lunch will be provided.
Suppliers of diesel fuel and end-users alike—including fleets, universities, hospitals, corporate sustainability leaders, municipalities and others—interested in the operational, environmental, and cost benefits of low-carbon liquid fuels, will not want to miss this exciting event. We are prepared to present valuable information on how to effectively build a low-to zero-carbon liquid-fuels supply chain. I encourage anyone interested in learning how these existing and emerging technologies can empower their organizations as state and federal carbon reduction policies take effect to join us.
For registration and details on both events, visit exploringbiodiesel.com. ICM
For the past few years, we in the Bioheat fuel space have been intensely—and intently—focused on the carbon-cutting benefits of our sustainable, renewable liquid heating fuel. This has largely been as a result of the shifting political and regulatory environment in which fuel oil dealers find themselves operating.
While climate change has been dubbed an “existential crisis,” one against which immediate action must be taken and one for which we have a solution that is available today, more immediate social and environmental injustices have taken center stage over the past year and a half. The COVID-19 pandemic has brought to light health care inequities for people of color buttressed by what many say is the most profound period of civil unrest since the 1960s. Although climate change is believed to be a force that disproportionately impacts communities of color and disadvantaged peoples, poor air quality and correlated health risks associated with environmental justice (EJ) communities, and as a result the effects on productivity and economics, are indisputably real. People in these disadvantaged communities who are exposed to air pollution from petroleum diesel fuel exhaust must not endure this danger any longer.
Many leaders act as if electrification is the only solution. It is not. Elected officials representing these communities, along with the regulators, administrators and bureaucrats serving them, have a choice to effect positive change with a slate of existing and emerging solutions. We are arming them with data they need to make an informed decision about one existing, available, cost-effective solution: Bioheat fuel. Whether they have the courage to act is on them.
The Trinity study
In April, the National Biodiesel Board (NBB) unveiled results from a year-long study conducted by Trinity Consultants that demonstrate in great detail how switching to biodiesel results in numerous health, productivity and economic benefits at the neighborhood level. The study used U.S. Environmental Protection Agency (EPA) air dispersion modeling tools, health risk assessments and benefit valuations to assess the public health benefits and resulting economic savings of converting from petroleum-based diesel to 100% biodiesel (B100) in 13 disadvantaged communities in the U.S. that are exposed to high rates of petroleum diesel pollution, whether from multiple modes of transportation or home heating oil.
The Trinity study, which was sponsored by the NBB with support from the Nebraska Soybean Board, South Dakota Soybean Research & Promotion Council, California Advanced Biofuels Alliance, Iowa Soybean Board and the Wisconsin Soybean Marketing Board, found that switching to B100 for home heating oil and transportation would bring the 13 communities studied 340 fewer premature deaths, 46,000 fewer lost work days and $3 billion less in health care costs per year. In the transportation sector, benefits included a potential 45% reduction in cancer risk when heavy-duty trucks such as semis use B100, and 203,000 fewer or lessened asthma attacks. The study also considered the economic cost of premature deaths, asthma cases, reduced activity due to poor health or poor air quality and work impacted due to sick days.
Of the 13 communities researched, five of the case studies on the East Coast focused on replacing petroleum-based home heating oil with B100 Bioheat fuel. The communities studied were New York City and Albany, NY; New Haven, CT; Providence, RI and Boston, MA. When Bioheat fuel made from 100% biodiesel is used in place of petroleum heating oil, the study found an 86% reduced cancer risk and 17,000 fewer lung problems.
“EJ communities tend to be exposed to higher concentrations of home heating exhaust emissions in general,” the researchers explained. “The thrust of this study is to demonstrate the benefits of the substitution of biodiesel for home heating oil. The communities selected for this study were those identified to experience the highest emission rates, the highest ambient concentrations and the highest risk levels due to home heating oil exhaust. As described within this report, these benefits are credited to residential home heating oil combustion. The benefits of biodiesel will therefore accrue to a much greater degree within EJ communities.”
Let’s hone in on a small census tract in Boston to demonstrate Bioheat’s health, productivity and economic benefits per the Trinity study. To begin with, the researchers note that:
It is expected that the cancer risk associated with residential heating oil usage in Boston … lies somewhere between 0.9 and 21.8 excess cancer cases per million residents over a 70-year lifetime. Assuming a full transition from residential distillate heating oil to biomass-based diesel, the baseline cancer risk in Boston… is reduced to a value between 0.3 and 3.1 excess cancer cases per million residents. The total cancer burden for all census tracts within a five-mile radius of Boston…is 5, assuming the higher end of the risk range, with an expected reduction in cancer burden to a value that is much less than 1 with the use of biomass-based diesel fuel for home heating oil combustion.
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In other words, Bostonians can expect an 86% drop in cancer risk as a result of replacing conventional heating oil with B100 Bioheat fuel. Eight fewer premature deaths would also result from this conversion. While human life is priceless, the “economic benefit value” attributed to these premature death avoidances in Boston would be more than $68 million a year. Asthma attacks would be reduced by 4,000, representing an annual economic benefit of $244,000. Use of B100 Bioheat fuel in Boston would also provide 6,000 fewer restricted-activity days, meaning residents could take in more exercise, a benefit valued at more than $400,000 per year. This would also contribute to 1,000 fewer lost work days providing greater productivity tallying nearly $240,000 a year.
The cumulative numbers from this unprecedented study—340 fewer premature deaths, 46,000 fewer lost work days and $3 billion in avoided health care costs per year—represent findings from these 13 select sites and communities. Just imagine the almost inconceivable impact to be had on human life, health, quality of life, productivity and the economy if B100 were utilized across vast swaths of countless EJ communities throughout the U.S.
Bioheat fuel is cutting carbon and saving lives. Talk about feeding two birds with one scone (an alternative to “killing two birds with one stone”). I suppose the idiom here should be “solving two crises with one fuel.”
Donnell Rehagen, CEO of NBB, said, “Saving lives by reducing the health impacts of transportation and home heating fuels is a priority, and biodiesel is widely available today to achieve that goal. These immediate and substantial emissions and health benefits can and should be an important part in any State, regional or national climate program as our nation moves toward decarbonization through advanced alternative fuels like biodiesel and renewable diesel. The immediacy of these potential health benefits, especially for disadvantaged communities, is even more critical when one considers the years it will take for States to pursue deep electrification and other decarbonization strategies.”
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During a press event this spring when NBB announced the new study, Matt Hermann, the organization’s Director of Environmental Science, said, “While [greenhouse gas] GHG reductions are very important, improving air quality provides much more of a local benefit…to [environmental justice] communities that have long endured [poor air quality].”
At the same event, Floyd Vergara, NBB’s Director of State Governmental Affairs, said, “It’s clear to me that residents in these communities place a high priority on how pollution affects them at the ground level—not statewide or even at the county level, but how it affects me and my asthmatic child in my neighborhood.”
The best part is, just like with the carbon reductions we have been promoting for some time, B100 biodiesel and Bioheat fuel can provide these health and quality-of-life benefits immediately—not five, 10 or 20 years down the road. ICM
We make many decisions every day, but some seem so much harder to make than others. As I watch industry leadership groups, fuel wholesalers, biodiesel producers and systemwide stakeholders toil with how to mainstream much-needed solutions to the ever- growing climate crisis, I grimace at the indecisiveness on strategies needed to achieve significant reductions in carbon emissions.
Legislators are being squeezed from all sides to hastily enact measures that they perceive will address climate change and carbon reduction. The path of least resistance for them is electrification, whether for passenger vehicles or home heating, despite some obvious shortfalls of this approach.
These legislators look to California as a low-carbon leader for inspiration and see a ban on the sale of internal combustion engines by 2035 as a bellwether of things to come. What they do not—or choose not—to see, however, is that under the State’s Low Carbon Fuel Standard (LCFS), renewable fuels such as sustainable, low-carbon biodiesel make up more than 80% of all the credits generated under the program.
The takeaway message is that until a vast majority of the power supply is renewable and built out on a much larger scale to accommodate widespread electrification, along with reinforcement and security of the grid, the carbon-reduction value of tomorrow’s electrification promise is no match for the reality of biodiesel’s ability to deliver significant carbon reductions today. However, time is of the essence for Northeast heating oil providers to meet the mounting demands being levied upon the fuel supply chain.
Since 2003, the National Biodiesel Board, National Oiheat Research Alliance, Brookhaven National Laboratories, National Renewable Energy Laboratory and countless industry pioneers have navigated fuel standard developments and technical challenges to be confident that B20—a 20% blend of low-carbon, sustainable biodiesel and ultra-low sulfur heating oil—is fit for purpose not tomorrow, but today. Moving forward, lab and field work already show great promise that blends as high as B50 are performing well in legacy equipment. Thoughtful, deliberate communication planning and marketing pathways have been developed and deployed throughout New England and the Mid-Atlantic to help fuel dealers become more knowledgeable and confident in their new 21st Century offering.
So, all systems go, right? Hardly. It is becoming clear that because the heating oil industry has not sent a bankable signal to low-carbon liquid fuel manufacturers, product availability has become strained at best.
I spoke recently with fuel distributors in key markets to learn that biodiesel is being offered anywhere from 10¢ a gallon under NYMEX to 50¢ over NYMEX. How does this work? Why the volatility? Can we afford to buy and sell a product this far out of the money? An initial gut reaction might be No, but after considering the alternative, which would be the final chapter of buying and selling liquid carbon, the correct answer is Yes.
While we may continue to experience periods of cheap oil and low refined-petroleum product prices, we must read the writing on the wall and be able to understand what it means. Carbon reduction is not a passing fad that will disappear like the legwarmers of the 1980s. The pieces on the policy chessboard have been in play for years, and they are now in place for a checkmate strike on King Carbon. What we don’t want for your home heating oil business is for it to become a pawn of attrition in this battle on climate change in the political arena.
The value of energy sources such as biodiesel and Bioheat® fuel do—and should—come at a premium because, in the simplest of terms, they not only fulfill the job of their carbon-rich counterparts (price X), but they also provide the added service of reducing carbon emissions by up to nearly 90% compared to their petroleum-based equivalents (premium C).
We could further say biodiesel also provides valuable lubricity (premium L) to ultra-low sulfur diesel fuels; domestic job creation (premium J); rural economic revitalization (premium R); cleaner air (premium A); vastly reduced or eliminated equipment- conversion costs compared to electrification (premium E), etc. Thus, if we were to internalize the cumulative societal benefits of biodiesel and Bioheat® fuels in terms of price and value where fossil heating oil would be price X, then the value of biodiesel would naturally be, at minimum, X+C+L+J+R+A+E. Now, 50¢ over NYMEX seems like a steal.
In simple and real terms, how can we mitigate this volatility and ensure the Northeast and Mid-Atlantic regions have access to ratable, high-quality, competitively priced low-carbon liquid fuels like biodiesel? Let’s start with a reality check.
The biodiesel industry currently has available production capacity near three billion gallons per year and adequate markets to offload this production, with California being the most attractive and logical destination for every producer in North America. When I first spoke about biodiesel and Bioheat® fuel to heating oil industry stakeholders in 2003, California wasn’t in play, Minnesota was in its infancy stage to adopt a mandate, and various incentive markets, such as Illinois and others, were developing as well.
People often talk about sticks and carrots in creating demand. The stick would be a State requirement or mandate wherein compliance is mandatory—and a lack thereof would lead to fines, loss of ability to conduct business and other punitive measures. The carrot approach, on the other hand, would provide financial incentives such as a price on carbon and value for carbon reduction like in California’s LCFS. With LCFS credit prices hovering around $200 per metric ton of carbon, this equates to a big, juicy carrot of between $1.50 to $2.00 tacked onto the value of one gallon of biodiesel. On top of federal Renewable Identification Number (RIN) prices and the $1 per gallon federal blenders tax credit, why would a biodiesel producer located anywhere from Boston to Santa Barbara ship their low-carbon fuel anywhere else?
Granted, the prospect that heating oil sectors on the East Coast could become significant players was met with huge interest by low-carbon liquid fuel producers and marketers. The phased-in goal of the Providence Resolution for heating oil to become net-zero by 2050, and the industry’s commitment to it, is a solid starting point. However, fast-track to 2021, the heating oil sector becomes less attractive simply because producers can divert their off-take to incentivized LCFS markets where higher netbacks are available with little heavy lifting.
Time is ticking away
As we continue to debate whether Bioheat® fuel is our future, organize countless meetings to talk through the details, time is ticking away on the industry’s life expectancy. Make no mistake about it: U.S. heating oil businesses are in for the fight of their lives against anxious legislators wanting to bury us and the low-carbon liquid producers delivering their off-take. We need action now—our livelihoods depend on it.
We need Bioheat and we need it now. The time has come to be bold and act with courage as a united industry. Half measures will avail us nothing. We need to amplify our voice and press legislators to establish a regional LCFS, or push New York policymakers to vote its LCFS out of committee, where it has been tabled for more than a year. Any LCFS in the Northeast must go beyond transportation fuel and encompass the heating sector. A big State like New York could be the linchpin needed in a regional LCFS approach that entices surrounding states to join. That will be the cornerstone of our communication with production houses—that we mean business, and we require this low-carbon energy source to build a strong, sustainable future for our companies, neighbors and family.
Step one, developing and committing to the Providence Resolution, has been fulfilled. The goal has been set and the commitments by the associations that represent you have been established.
Step two—the creation of the Project Carbon Freedom coalition—is underway. To complete this phase, join your colleagues and sign up to be a member (projectcarbonfreedom.com) so your singular voice can complement thousands of other supplychain stakeholders eager to secure a place in the new energy frontier. Completing Step two, joining Project Carbon Freedom and participating in hassle-free, effective advocacy campaigns the coalition has created, will provide us with the tools needed to get to the third and final step.
Step three is convincing legislators to make a commitment on a policy mechanism—a regional LCFS—that places a price on carbon and establishes a value for carbon reduction, as in California. This will attract low-carbon liquid fuel producers to sell into our market and put product in place so we can provide our customers with clean liquid heat.
We have the goal and mission: net-zero by 2050. We have the marketing arm and advocacy push: Project Carbon Freedom (but it is imperative you join). Finally, we have identified the policy mechanism needed to enact our mission by incentivizing low-carbon product delivery to New England—a regional LCFS in the Northeast. These three measures are all interconnected and require one another to succeed—much like we in the heating oil business require one another to do the same. ICM
With the stroke of a pen, President Joe Biden eliminated more than 10,000 U.S. energy jobs on day one of his presidency by killing the construction of the Keystone XL Pipeline through an Executive Order. Now, he faces pressure to shut down the Dakota Access Pipeline to move domestic crude from North Dakota to Illinois. Next, they are coming for you.
By “they” I mean decision-makers at all levels of government, from the highest Federal officials to local councils and everything in between. And by “you,” I mean fuel oil dealers who are unwilling to transition your heating oil business to Bioheat fuel.
However, you are needed, and not just by your customers who rely on you for that comforting warmth only liquid heating fuels can provide. While customers are the end of the supply chain for your fuel, this is only the beginning of the story. Your employees depend on your business—on the jobs it provides—to feed their families. Your company is needed by the local community where the paychecks get spent.
By incorporating Bioheat fuel, you help feed U.S. farmers who help feed the world and whose soybean oil provides more than half of the material inputs for sustainable biodiesel. In doing so, you support livestock producers who—as the providers of the steaks, pork chops and chicken wings you love so much—depend on cheap soybean meal in order to keep costs down and food prices in check. Drivers transport feedstock, biodiesel and Bioheat fuel from factories to local terminals. You are needed by the manufacturers in whose equipment your fuel is used, who have spent time and money testing and approving Bioheat fuel and Bioheat Plus for use in their burners, pumps and more.
Closing up shop is not an option. We all need you. As constituents to your Federal, State and local leaders, we all need you to speak up and tell them why you—providers of renewable liquid heating fuels like Bioheat—deserve a seat at the energy table, where to many of us it appears there are fewer and fewer chairs than ever before.
There was a time not so long ago when people wisely favored an “all-of-the-above” strategy to tackle our energy and environmental issues. A “shotgun approach” was the preferred method, as each of the many balls of shot represented a technology, a pathway meant not solve the problem on its own, but to contribute one of many solutions that, together, take down the target.
Climate change—Every one of our State trade associations voluntarily committed fuel oil dealers to achieving net-zero carbon emissions by 2050 via the Providence Resolution. By 2023, B20 blends of Bioheat Plus will achieve 15% carbon emission reductions. By 2030, B50 blends of Bioheat Super Plus will cut carbon emissions by 40% and by 2050, pure B100 Bioheat Super Plus, in addition to other measures we take, will get us to the goal line of net-zero carbon.
Cost and impact on low-income populations—Studies show that the cost of home conversions to airsourced heat pumps can range from $20,000–$60,000, depending on the extent of work and involvement of water heaters or existing oilheat systems. While middle- and upperclass homeowners may be able to absorb this hefty investment, what about low-income homeowners and renters? Will landlords be willing to write these big checks for their tenants? In addition to installation costs, what about monthly electricity bills?
The wholesale cost of electricity is typically highest in winter. Also consider this—if middle- and upperclass homeowners make the switch to heat pumps, this will put greater demand on the electric grid and force prices up for everyone, including low-income communities. Therefore, while the well-to-do enjoy certain benefits of heat pumps, the poor, who can’t afford to convert, are paying for it in higher electricity bills.
This only exacerbates systemic inequity. The cost of Bioheat fuel, however, is comparable to low-priced petroleum fuel and any slight cost increases are spread out over time among allincome users equally. The takeaway is that the use of Bioheat fuel by the rich doesn’t mean low-income populations have to pay for it, as with electrification.
Environmental justice—History has unfortunately demonstrated that communities of color and low-income populations have both been situated in areas of lower air and water quality, including shipping docks, fuel terminals and electric transmission stations and substations. Increased build-out of the electrical grid will only increase the number of transmission stations.
Does anyone believe these will be located in high-income communities? History tells us otherwise. Furthermore, the transition to biofuels in marine engines and fuel terminals, including Bioheat fuel storage for home heating, will vastly improve the air and water quality of these communities, reduce disease and death rates and improve the quality of life.
Better warmth—Air-sourced heat pumps may perform as needed in mild winter climates but it gets cold in the Northeast during the winter, and it is very likely that backup systems will be needed. Therefore, one might ask, What’s the point? I have to invest all this money, perpetuate systemic inequity and environmental injustice only to use the reliable Bioheat fuel system I was using all along when it’s cold? When else would I use my heat, in the middle of summer? This all, then, appears to be an exercise in futility.
Bioheat fuel is truly renewable, electricity is not—The ambition of the electrification movement is that the grid will be renewable at some nebulous point in the future. That is the only climate-change argument that makes this push even worth considering. Otherwise, we are simply shifting carbon emissions from tailpipes and chimneys to power plant smoke stacks.
According to the U.S. Energy Information Administration (EIA), only 17% of U.S. electricity in 2019 was derived from renewables. Globally, coal-fired power plants alone provided nearly 40% of all electricity in 2018. Not only will renewable power need to continue to make up a larger share of the existing power demand, but it will also have to satisfy more traditional increases in demand that organically occur over time as both populations and standards of living increase. Introduce these massive influxes of electricity demand from projected policies favoring electric vehicles, and we enter problematic territory. The EIA projects that world energy consumption will grow by nearly 50% between 2018–2050. Growth in end-use consumption will result in electricity generation increasing 79% between 2018–2050. Essentially, what is 17% renewable energy generation in the U.S. in 2019 would be approximately 9.5% in 2050.
We know it’s unrealistic to transition an entire economy to electrification in a matter of a few decades, but legislation is targeting the path of least resistance. If we don’t stand up and make ourselves heard, then that will be on us.
While upstream petroleum companies have powerful lobbyists in the halls of Congress and State legislatures across the country, who’s arguing on your behalf? By the looks of future- focused regulatory policy—no one. Sure, we have a multitude of trade associations doing great work and representing us as best they can, but we need to tackle this “existential threat,” to use the parlance of these climate change times, with a unified voice. While we may not be able or want to do much to slow the transition to electrification in light-duty vehicles, we can—and we must—do something about electrification of home heating.
Enter Project Carbon Freedom. This is a new effort to provide you with the education, advocacy and support you need to get your voices heard by decision-makers who hold your future in their hands. We frame up the situation, we offer a solution and we detail the strategy to get this done.
We know you are busy running day-to-day operations and keeping customers happy and warm, so Project Carbon Freedom makes it easy for you to effectively advocate well- reasoned positions to your legislators. These include the low-cost benefits our industry will continue to provide to fight climate change, improve air and water quality, create and retain jobs, support local communities and much more.
Project Carbon Freedom also provides letter templates for you to quickly and easily tailor the message to your needs—whether you are a fuel dealer, equipment manufacturer or employee—and submit them to policymakers and regulators to ensure we, and the many benefits we offer, are not left out in the cold. Visit projectcarbonfreedom.com for more information.
Not long ago, I wrote about being a lone voice in this fight, but with your help—and with Project Carbon Freedom’s assistance offered to you—I will be a lone voice no more. ICM