Bioheat: NBB Facilitates Textbook Partnership

By Paul Nazarro | December 21, 2009
Ideas can change the world. But as Thomas Edison said, "The value of an idea lies in the using of it." In 1996, the NBB brought our company, Advanced Fuel Solutions, on board to help discover new markets for biodiesel. We were in the idea business, brought on to identify and capture a new way to sell and market biodiesel. Heating oil is a big part of our lives in the Northeast, and the more we thought about it, the more it made sense. It was more than a decade ago now when we really got serious about the idea of introducing biodiesel to the oilheat market. The partnership was a textbook fit for both of the industries, creating a new market for biodiesel and allowing heating oil to stay competitive with new heating alternatives. No organizations or industries need each other more.

At first, Bioheat wasn't even a word, and now it is a registered trademark. It began with discussions among industry stakeholders and leaders. We were pitching a game plan, a canvas that was not yet painted. We talked with established petroleum and heating oil dealers to discuss what we saw as real potential for success, but it was just an idea, a concept. We started casually referring to that concept as "bio-heat" as a way not to confuse it with biodiesel.

Fortunately, NBB members and South Dakota, Minnesota, Nebraska, Maryland, the United Soybean Board and USDA shared our vision for the market's potential. With their support, the past 10 years have harvested the idea into a registered and ASTM-approved fuel for the home heating oil market.

For years, we lobbied home heating dealers-individually and through the National Oilheat Research Alliance, and other associations. The past 24 months have shown the results of those long term efforts.

In fall 2006, NBB secured the trademark for Bioheat and then sublicensed it to NORA, which proceeded to launch the official marketing campaign throughout the 24 NORA states. Bioheat fuel began a new era for oilheat and opened the door to a potential 450 million gallon a year market for biodiesel.

In 2008, NBB launched The Web site offers an easy-to-use public forum to educate home heating oil customers and dealers on the benefits of Bioheat fuel.

During 2009, the number of registered fuel oil dealers using Bioheat increased from 185 dealers to 365. The current market is estimated to account for about 22 million gallons in sales.

While Bioheat has gained ground on a company-by-company basis, as an overall market it has not yet truly kicked off. We will begin to see a real impact in July 2010 with the required biofuel mandate in Massachusetts for all heating oil and diesel fuel. In addition, the 24 NORA states recently charted a new course for the future of oilheat. They established a ratified set of goals, which included moving from conventional high-sulfur heating oil to using ultra-low sulfur diesel and a B2 biodiesel blend by 2011. This will increase to ULSD blended with B15 by 2015. More importantly, NORA's goals formalized what we identified as an ideal collaboration opportunity.

Establishing a Bioheat technical committee is next. The group will consider how best to include higher biodiesel blends into ASTM standards, thus laying the foundation for even greater biodiesel sales potential.

I expect that in the next 24 months we will be selling more biodiesel into heating oil than any other market. The strength of this market is driven by legislative pressures to reduce carbon intensity, NORA's comprehensive support for Bioheat, and the simple fact that blending oilheat with 12 percent or higher blends of biodiesel can make the fuel compete with natural gas for emission reductions.

A decade ago, oilheat paired with biodiesel was just an idea, and today it really has changed the heating oil business for the better.
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