Is the market ready for alternative fuel oil?

Remember the 1985 hit movie, "Back to the Future"? At its conclusion, Doc Brown rustles frantically through the garbage. "I need fuel," he says to Michael J. Fox's character. He plunks recyclable products into the flux capacitor of the time-traveling Delorean - banana peels, paper cups, etc. The duo then races back to the future and saves mankind.

This scenario of reusing and recycling waste products to meet our fueling needs is no longer science fiction - the future is now, McFly.

Biodiesel, a biodegradable alternative fuel made from renewable fats and vegetable oils, has enjoyed a recent surge in the market for many of the nation's major fleets. This is due largely to a 2001 amendment to the 1992 Energy Policy Act (EPAct), which required certain vehicle fleets to purchase light-duty alternatively fueled vehicles. The U.S. Department of Energy approved a rule allowing biodiesel fuel to qualify as an alternative fuel source to meet this requirement for affected automobiles.

Today, according to the National Biodiesel Board (, more than 400 major fleets use biodiesel commercially nationwide, with roughly 300 retail filling stations making biodiesel available to the public (even music legend Willie Nelson claims biodiesel as his fuel of choice for his 2005 Mercedes 320 CDI).

Biodiesel is nontoxic. It is made from U.S.-grown resources, such as soybeans, rapeseed, and waste oils like restaurant grease. Essentially free of sulfur and aromatics, it can be introduced to engines and systems with few or no modifications. Performance is similar to petroleum-based diesel - comparable fuel mileage, horsepower and torque - but biodiesel lubricity is far superior.

It's even reported that biodiesel exhaust smells like french fries!

Now the heating oil industry has turned its attention to this cleaner-burning fuel as an option for its customers' homes.

Market Share

The market is ripe for the public to accept biodiesel blends as an alternative fuel source for their homes' heating oil needs. Several factors are attributed to this surge in biodiesel awareness:
  • Middle East conflicts leave our foreign oil supply and price at the whim of political and cultural movements.

  • Ever-decreasing supplies of fossil fuels and their negative impact on the environment is finally causing consumers to worry.

  • The need for more domestic production of jobs with a healthier U.S. economy is on everyone's mind in this hotly contested election year.
Pure biodiesel is referred to as B100. B20 is the most commonly found blending ratio for fleets and buses (20 percent biodiesel, 80 percent petrodiesel).

The word "bioheat" is an industry-accepted term used to describe any blend of pure biodiesel with conventional home heating oil. Both oils must meet their specifications - ASTM D 396 and ASTM D 6751 - before blending can occur. (Bioheat is usually a 2 to 20 percent blend of biodiesel with heating oil.)

Paul Nazzaro, president of Advanced Fuel Solutions Inc., says the use of biodiesel as heating oil was overlooked in the past because of the relatively low cost of petroleum fuels. Between 1999-2000, the Department of Energy reported that consumers paid $1.21 per gallon throughout the winter. However, extreme temperatures the following winter (January to February 2000) saw heating oil prices raise to $1.99 per gallon. Supplementing home heating oil with biodiesel quickly became a viable option.

Commonly used No.2 heating oil is refined from crude oil. The Energy Information Agency reports that 7.7 million American homes consumed this heating oil in 2000, of which 69 percent are located in the Northeast corridor.

Here especially, where the nation's oldest homes still use No. 2 heating oil, Nazzaro says, the oil heat industry can reclaim market share lost over the past two decades to natural gas with bioheat as a cleaner, safer heating oil. (In the 1970s, 20 percent of American households used oil to heat their homes. Today only 4 percent of new homes use oil.)

Does It Work?

In 2001, the Warwick, R.I., public school district began a pilot program for its schools heating boilers using various blend levels of biodiesel. Funded by the DOE's Clean Cities Program and the National Renewable Energy Lab, the results have showed that biodiesel reduced emissions from the boilers in three of its schools, compared to a fourth where petroleum-based diesel was used as a control.

Less odor was discovered, and the lack of soot in the equipment was positively noted. Efficiency, according to staff, was not affected.

Throughout New England there are myriad pilot projects underway, each providing encouraging results that performance was realized in their use of bioheat blends of 10 percent to 20 percent.

Concerns of using bioheat are:

  • Compatibility - Bioheat at blends up to B20 are compatible with all known oil tanks and systems. Higher biodiesel blends' compatibility will depend on materials (metals, plastics and rubber parts) of the tanks, pumps and fuel lines. Because of its solvent quality, though, higher blends (over B20) may dissolve natural rubber and cause leaks.

    Also, biodiesel's ability to dissolve build-up may cause overactive sediment and plug filters if a tank or burner has not been properly cleaned. This is not as prevalent in B20 blends, but several stages of filter replacement might be necessary before trouble abates.

  • Storage - Biodiesel in its pure form poses a bit of a challenge to storage since it can gel in very cold temperatures, just as No.2 does. B20 storage is managed in the same way as No.2, and it's been found that blends of 5 percent or below have almost no impact on cold flow.

  • Warranty Coverage - While to date no manufacturers have written positions applicable to bioheat, trouble-free experience so far, according to the NBB, provides a level of confidence that equipment shouldn't be a factor in blends of B20 or lower.

    The U.S. Department of Energy's Brookhaven National Laboratory (, a nonprofit research management company, currently is testing advanced burners to create efficient and clean oil heating systems. Brookhaven hypothesizes, "If all energy sectors reduced fuel consumption by 40 percent, global warming reduction targets for greenhouse gases could be reached easily."

    Also working toward bioheat awareness among manufacturers is the National Oil heat Research Alliance (NORA), which supports research and development of new technology for production and storage, and also improves the public perception of oil heat.

  • Price - Ah, the bottom line. Bioheat is, in fact, more expensive. At present its cost depends on the blend used. Bioheat at B20 may cost 20 cents to 30 cents more per gallon. Current legislation in Congress proposes monetary incentives for biodiesel use, which may, in time, bring down its cost.

    But bioheat offers more to consumers. It decreases harmful emissions of NOx, eliminates sulfur and improves exhaust odor. It reduces our dependence on foreign oil, helps U.S. farmers provide new markets and jobs for Americans, and is friendly to Mother Nature.

    Its environmental attributes, says the NBB, could be used to diversify the oil heat market structure by offering bioheat as a "premium" or "green" heating oil vs. "regular" or standard oil. The new structure could allow for variable markups and increase profitability for the industry.

    Nazzaro sees a real business opportunity for a "visionary fuel marketer." An open approach to biodiesel allows companies to provide a service to their customers that competitors don't.

    Due to increasing pollution control and tax incentives, the U.S. biodiesel market is expected to grow to 1 or 2 billion gallons by 2010. The price already has come down from $3.50 a gallon in 1997 to $1.85 in 2002, but it is still higher than petrodiesel. Price seems to be the only hang-up with consumers, according to a survey this May by the NBB.

    No one knows just how far biodiesel can go in this country, but one thing we do know: petroleum is finite. Once that supply is depleted, alternatives must be on-hand to meet the needs of a country on the move.