Contractors Debate Bioheat

June 16, 2008
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A panel of oil heat contractors talked about the pros and cons of adding biofuels to their company’s product mix. The panel included (from left) George McQueeny, Ralph Adams, Matt Spink, and Andrew Kellar.

HARTFORD, Conn. - Bioheat was the topic of debate for a group of panelists at the National Association of Oil Heat Service Managers (NAOHSM) Meeting in Hartford recently. Two panelists, Andrew Kellar and George McQueeny, spoke about the pros while Matt Spink and Ralph Adams represented the cons.

Bioheat is produced by a blend of fuel oil and renewable sources such as soy or canola oil. The objective for using biofuels is to reduce dependency on non-renewable fuels such as oil, reduce greenhouse gases, and make the indoor environment healthier. But switching to biofuels poses problems for existing oil heating equipment and contractors who install that equipment.

Oil heat contractors have been witnessing a dramatic drop in the number of homes heated by oil, from 13.5 million in 1980 to 7.7 million today. The concept of biofuels, developed by the National Biodiesel Board in 1992 by state soybean commodity groups to open more markets for farmers to sell their products, is seen by some oil heat contractors as a way to slow down the oil-to-gas equipment conversions that are shrinking the customer base.



PROS AND CONS

“Bioheat can improve consumers’ perception of oil heat and help mitigate oil heat deficiencies,” said Kellar, who started his own biofuel delivery and service company last year. “I saw bioheat as a specialty niche market in my area. There was only one other contractor within 50 miles offering the same product when I started my business.” He noted that the demand for biofuel was non-existent in 1998 and today it has reached 500 million gallons.

“I wanted to give consumers an option of what oil they want to heat their homes,” Kellar said. That niche has helped his business grow from no customers to 500 in 14 months.

Adams put a different spin on the topic. He still views biofuels as being in the formative stages and does not want his customers to be “guinea pigs for the new products.”

Adams said, “My customers rely on me to make an informed choice for them. I don’t know enough about biofuels, especially how they hold up in outdoor tanks, where the issue is extreme temperatures.” Adams noted that the Northeast region has not experienced any real cold winters lately and it would be difficult to test the biofuel composition without extreme temperatures.

Spink noted, “Should we give ourselves a black eye if we have to fill up the tanks every month during a cold winter and we constantly stir up the sludge with the new biofuels? We just can’t convince our customers that they probably have to buy new tanks.”

McQueeny said his company converted its entire product line to biofuels, which is basically a blend of 95 percent regular fuel oil and 5 percent renewable fuel.

“We didn’t lose any customers when we announced the new blend,” he said.

Adams said that any biofuel on the market has not been officially approved for use in homes and businesses and as long as no governing board has put its stamp of approval on biofuels, he does not want to be held liable in the event of a fire in the home. “Manufacturers won’t stand behind it because it hasn’t been approved,” he said. “I don’t want to go out on a limb and be there when it breaks.”

Spink said that larger oil companies may not want to commit their resources to making the switch, even a small switch, to biofuels. But he acknowledged that a smaller company, like Kellar’s, is “an easier fit for alternative fuel sources.”

One NAOHSM member in the audience said he questioned the quality of biofuels, citing a comment from one of his service techs who said it was the “worst winter for service because of his company’s switch to biofuels.” But Kellar replied that it could have been a quality issue of how the fuel was blended.

Publication date: 06/16/2008

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