At Issue: New heating oil regulations - WCAX.COM Local Vermont News, Weather and Sports-

At Issue: New heating oil regulations

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Starting next month, fuel dealers in Vermont are on a push to re-brand the oil they sell as a cleaner way to heat homes.

"This is a marketing strategy for the next hundred years," says Matt Cota, Executive Director for the Vermont Fuel Dealers Association.

He says on July 1, state law requires all their heating oil to be nearly sulfur-free.

"That means less particulate matter in the air. That means your equipment runs more efficient and cleaner," he says.

It's tied into the 2011 Vermont Energy Act, which set a timeline for transitioning to low-sulfur, biodiesel-blended heating fuel. The biodiesel is regular diesel that's mixed with oils you could find in a restaurant or kitchen and then dyed red to distinguish it from the fuel used in cars.

"It can come from soybeans, it can come from waste oil, it can come from algae, it can come from canola, sunflowers," he says.

Cota says almost every Vermonter is already getting this oil, and so they can keep using their exisiting equipment. Next month, the only thing that changes is that its sulfur content must be lower. There is an added cost in that, but Cota expects that will not affect most Vermonters' bills. That's because nearly half of the state's heating oil supply comes from Canada, where the sulfur limits are already being met, and he says most fuel dealers are already complying.

"If there is a cost difference it will be miniscule -- it will be more than made up for by the efficiency gains for the consumer," he says.

He points to New York, which moved to these standards in 2012. While Vermont uses about 80 million gallons of heating oil, New York uses one billion. And Cota says they haven't seen any downsides.

"So we take from our neighbors to the west, who use ten times more fuel than we do, that it works, and it's good for the consumer, and it's good for the heating fuel dealers," he says.

He says this is part of their effort to keep customers amid an overall trend of rising costs in the past seven years. Between last June and this year, the price of fuel oil is up 16 cents a gallon, according to this month's Vermont Fuel Price Report, which is released by the state. Right now, a gallon of fuel oil costs $3.73.

At the same time, they're also up against new, cheaper competition. Natural gas is expanding in Vermont, and according to this month's report, remains about half the price of fuel oil. Fuel oil costs $33.70/MM BTU, while natural gas is $18.30/MM BTU.

But Cota says going green gives them an edge.

"One of the things that we hear from customers is that they want a cleaner fuel. Well, we're doing that by taking the sulfur out. One of the things that we hear from consumers is we want a greener fuel. We want a renewable fuel, we want an American-made fuel. We're doing that by adding biodiesel to it," he says.

We also asked if this was going to bring about some of the same concerns over bumping up crop prices as ethanol does with corn. Cota says it's the opposite. Previously for a crop like soybeans, he says the oil was squeezed out and either given away or thrown away, while the rest was used for fiber in food. He told me that the oil being extracted can now be used in biodiesel, giving farmers two crops now when they plant: the soybeans and the biodiesel.

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