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Biodiesel Blend Could Mean Cleaner Heating Oil for NJ Winters

Assembly panel moves measure, but questions about costs and consumer savings remain unanswered


Biodiesel fuel may soon play a bigger role in New Jersey’s energy future, potentially enabling homeowners to use a cleaner product to heat their homes each winter.

In a bill divisive to the oil industry, the Assembly Telecommunications and Utilities Committee yesterday advanced a measure (A-3161) that would require increasing the amount of renewable biofuels to be blended into home heating oil sold in New Jersey.

To its advocates, the legislation would help reduce greenhouse gas emissions and increase the performance of oil-burning furnaces. The big question is whether it will lower heating costs for consumers, an issue disputed by lobbyists for oil refiners and the petroleum industry.

The use of biodiesel as a fuel to power motor vehicles has been growing in the United States, climbing from about 25 million gallons in the early 2000s to almost 1.1 billion gallons in 2012, according to National Biodiesel Board, an industry trade organization.

Its use as an ingredient in home heating oil is much less common, although several states have issued similar mandates to the one considered under the New Jersey bill. In October 2012, New York City began requiring home heating oil sold there to contain at least 2 percent biodiesel, a renewable fuel comprising soybean oil, animal fats, and recycled restaurant grease.

Under the proposed bill at least 3 percent of heating oil sold in New Jersey would include at least 3 percent biodiesel by July 1,2014, eventually rising to 5 percent by July 1, 2016.

With states like New Jersey increasingly looking to promote renewable sources of energy to curb the greenhouse gas emissions that contribute to global climate change, the bill offers not only environmental benefits, but also a potential economic upside, according to proponents.

“By adding a percentage of domestically produced and renewable biodiesel to our heating oil, we will substantially reduce greenhouse gases and slash household emissions of carbon dioxide (a prime component of global warming) by 1.5 million tons per year, according to some experts,’’ said Assemblyman John Amodeo (R-Atlantic), the sponsor of the bill, which has received bipartisan support.

Perhaps more importantly, there is a lot of interest in locating a biodiesel production facility in New Jersey because some advocates believe that the market in the Northeast -- where many homes use heating oil each winter -- could take off.

New Jersey accounts for approximately 6.6 percent of all heating oil used in the country, according to the 2011 state Energy Master Plan.

“It’s a winner for the consumer, but also for the state of New Jersey by creating jobs,’’ Amodeo told the committee.

Rebecca Richardson, a consultant for the National Biodiesel Board, agreed. “You are creating an opportunity for the industry to grow in New Jersey,’’ she said, adding that the state is in a prime place for the sector to expand.

But oil industry representatives, refiners, and others called the bill unnecessary, noting that some retail home-heating dealers in New Jersey already blend biodiesel into heating oil supplies.

“Essentially, what New Jersey is doing is banning traditional heating oil,’’ said Scott Ross, associate director of the New Jersey Petroleum Council. He said the mandate could create a stronger demand for heating oil, an event that would likely increase costs.

Michael Karlovich, a vice president of PBF Energy, an oil refiner, argued that the mandate could increase costs for home-heating dealers by requiring them to purchase more equipment, such as new tanks to store the biodiesel fuel and blend it into conventional home-heating oil.

“Consumers should not be forced to buy a product they don’t want and will cost more,’’ Karlovich told the panel.

Mike Proto, representing Americans For Prosperity, also disagreed with the measure. “We oppose any subsidies or mandates in the energy sector,’’ he said, adding the state should let the free market decide which are the best fuels.

But Eric DeGesero, executive director of the New Jersey Fuel Merchants, said the proposal would help its dealers by reducing emissions from home heating oil, one of the biggest complaints lodged against the fuel in recent years.

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