Progress on major issues generates optimism for oil heat

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By Simon Blake

Members of the oil heating industry were upbeat at the recent Canadian Oil Heat Association annual conference as the industry is beginning to overcome some of the issues that have dogged it in recent years.

“We have gone through some struggles in the past few years and now we are beginning to see that light at the end of the tunnel,” COHA president Stephen Koch told about 115 delegates and companions at Cleaner Heat 2016, held June 8-9 in Charlottetown, P.E.I.

Challenges have included oil spills and high remediation costs, insurance industry aversion to oil heat, and competition from heat pumps.

Two years ago the organization formed an advisory council to work directly with regulators, insurance companies, educators and the oil heating industry to address these issues. It has had some success and come up with a clear strategy, said Koch.

Dealing with spills

Initiatives include convincing governments and insurance companies that rapid response to a spill is a must. Spill cleanups are often made much worse because the oil is left sitting on the ground. And the industry is often excluded from the cleanup process, “but boy are we sued,” added Koch.

As well, the advisory council wants an end to the conflict of interest where the company evaluating the spill and recommending cleanup procedures is also the company doing the work.

Delegates heard about residential oil spill cleanups costing up to $1.7 million in Canada. Part of the problem is that engineering companies are brought in to deal with even minor spills.

“Insurers have data that says if they have a problem, it’s going to be with those drops of oil hitting the ground. It could be a thousand or it could be a million dollars. There’s no way for them to manage risk,” said Koch.

Contrast that to the U.S., where the average residential oil spill cleanup cost between 2005 and 2016 was $4118, reported Gary Missigman, owner of Powderhorn Agency, a U.S. insurance broker that operates the ProGuard program that provides cleanup and tank replacement coverage for 30,000 homeowners at a cost of about $50 per year.

In the U.S., the oil dealer conducts cleanups for leaking tanks under 2000 gallons. From 100 to 5,000 parts per million (ppm) of oil, depending on the jurisdiction, can be left in the soil.

Better education

A key initiative is to enhance COHA’s GreenTech training program to ensure that technicians and oil dealer personnel have the necessary training to spot potential problems before they occur.

The oil heating industry has been around for many years and is struggling to attract young people and new ideas. The problem is that many students have never heard of oil heating, said Alan Gaunt, an instructor from Humber College in Toronto. “We are not just trying to teach oil heating; we have to teach what it is.”

The college emphasizes that oil burner training gives technicians the opportunity to work in rural areas. “We sell them on the basis that they can work anywhere if they have all the fuels covered.”

Insurance companies have been so “anti-oil” that they have made selling oil-heated homes difficult, remarked Ottawa realtor Barb Koch.
“The biggest challenge that we are having is that it’s the only time I have to put in a clause that says, ‘sale conditional on insurance approval.’”

However, remarked Jim Wood (McKeown & Wood Fuels, Napanee, Ont.): “In Ontario, we are starting to turn a corner. We are having a lot less problem with that than we were three years ago.” Bob Parsons (Granby Industries) urged COHA to develop a presentation to educate real estate agents on oil.

Better information

Another advisory council initiative is to create a database of reliable accurate information on oil heating, spills, and other useful facts. “It’s a lot easier to influence a government or an insurer if we have reliable data,” noted Koch.

Much of the information concerning oil heating, such as that on the NRCan website, is outdated, noted Steve Wilson (Kerr Controls). A COHA database needs to provide ready access to up-to-date reliable third-party validated information.

Another challenge for the industry is that many provinces are using outdated versions of the CSA B-139 oil heating code. COHA is urging provinces to adopt the latest 2015 version, which includes many changes.

The oil advantage

One of the struggles for the industry is getting the word out that heating with oil does have advantages, In a session titled ‘Top ten reasons to heat with oil,’ delegates came up with a number of reasons including:

  • A given amount of oil puts out more energy than a comparable amount of natural gas or propane.
  • The new high efficiency equipment can substantially reduce heating costs.
  • Ultra low sulfur fuels can reduce emissions to similar or lower levels than natural gas.
  • Oil is safe – a leak won’t result in an explosion.
  • The customer has a choice of different fuel suppliers.
  • Oil dealers are typically family businesses and have a close relationship with customers.
  • Some gas utilities are now charging thousands of dollars to install a gas line – oil is often a less expensive option.
  • Oil-fired water heaters offer a quicker recovery time than gas or electric.

The oil industry can be its own worst enemy, remarked outgoing COHA chairman Mario Bouchard (Granby Industries). When equipment needs to be replaced, dealers and contractors tend to offer the customer the least expensive and least efficient equipment without explaining the options. “A lot of people don’t know that we have high efficiency equipment.” He suggested that the industry reverse its approach. “Start high; you don’t know what the capacity of the customer to pay is.”

A new competitor

Heat pumps, often backed by government incentives, are increasingly becoming serious competition for the oil heating industry. However, exaggerated performance claims along with poor installations have slowed the growth somewhat.

Some oil heating contractors and dealers also install heat pumps, which can compliment an oil system, using oil for heat in the coldest months and the heat pump for the shoulder seasons and air conditioning, or to add heat and AC to an addition on the home.

The important thing for oil dealers and contractors is that they educate themselves on heat pumps so that they can help customers make the right decisions. “If you don’t have the information to share, they make misinformed decisions,” noted Brennan Ferguson (BFAL HVAC Equipment Sales, Dartmouth, N.S.).

At the COHA annual general meeting, members elected Dave Brown, operations and sales manager for Western Petroleum, Cornerbrook, Nfld., as chairman, replacing Bouchard who has served for the past two years.

Numerous seminars and presentations along with a lot of healthy discussion ensured that those attending Cleaner Heat 2016 went home with plenty of ideas to run their businesses better. But it wasn’t all work.

The Sixth COHA Cup golf tournament took place at the beautiful Fox Meadow Golf Course. Participants also toured the Rosignol Estate Winery. The ‘Light up the Night’ banquet had everyone – well, almost everyone – dressed in white to wrap up the event.

The next COHA annual conference will take place at the Delta London Armouries, London, Ont., June 13-16, 2017. For more information, visit www.cleanerheat.ca.

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