The biodiesel and oilheat industries have a long-standing history working alongside each other respectively serving the home heating needs of their customers, particularly in the Northeast, and delivering clean-burning Bioheat was the sentiment echoed by keynote presenters during the one-day Northeast Bioheat Workshop held in Pittsburgh, Pa., on Oct. 11.

Joe Jobe, CEO of the National Biodiesel Board, kicked off the conference during a keynote discussion alongside John Huber, president of the National Oilheat Research Alliance, highlighting how the industry is on pace to capture 5 percent of the diesel market by 2015. Understanding that while the industry may be experiencing record production of biodiesel this year, Jobe pointed out how the industry was able to move forward during difficult economic times throughout 2010 amidst a lapsed tax credit, international trade issues and rapid contraction, crediting federal policy drivers such as the reinstated, retroactive tax credit at the end of 2010 and implementation of RFS2 as critical factors.

“The good news is that the biodiesel tax credit was extended, the RFS2 was implemented and both are operating very effectively right now and the biodiesel industry is experiencing a very strong resurgence, mostly attributable to the RFS2 and the tax credit coexisting for the first time in the industry’s young history,” Jobe said.

The RFS2 calls for a ramp-up from 800 million gallons of biodiesel this year to a minimum of 1 billion gallons of biodiesel next year and “1 billion gallons with an asterisk beyond that meaning the EPA will set the volumes beyond 2012,” Jobe said. “If this volume is followed…if we continue to successfully implement the RFS2, we’re looking at about 2.5 billion gallons by 2017.”

While federal and state policy is in place to grow the biodiesel industry, Jobe said he’d be remiss if he didn’t mention that its progress isn’t met without resistance by various organizations, such as the American Petroleum Institute and the American Trucking Association, coupled with a super committee formed in Congress tasked with reducing the national debt by the end of the year. However, he added that state incentives could help bring certainty where federal policy is lacking.

“We all know that relying solely on federal policy, and, being a policy-driven industry as we are, has its downsides,” Jobe said. “The federal government can be fickle, and it can be inconsistent and it sometimes can create uncertainty in the market. State energy policy supplements that, and it can be a very strong insurance policy against the uncertainty of inconsistent federal policy.”

With the uptick in biodiesel production on a national scale, Huber said suppliers and customers of Bioheat in the Northeast are hungry for additional volumes of biodiesel blended in their heating oil for home and industrial heating, cooling and power applications. According to Huber, the oilheat industry is present in 23 of the cold-weather states and enters about 8.5 million homes per year, which equals to about 20 million people. He added that between 8,000 and 9,000 independent businesses distribute oilheat.

Huber not only highlighted Bioheat’s inherently low-carbon, low-sulfur profile, but he also discussed how Bioheat will continue to remain a direct competitor against its nemesis, natural gas, particularly in the Northeast.

Once the oilheat industry moves toward a B12 blend, the fuel will be more efficient and cleaner than natural gas, Huber said. “From our perspective, that puts us on a level playing field, and that is just a matter of who is competing best in the market with respect to pricing, service and so on.”

In an effort to capture market share in the region, Huber said NORA advocates that Bioheat should be considered a significant portion within the overall fuel mix when used in heating and power applications. He added that NORA currently has a project underway that included using Bioheat in air conditioning applications.

Huber also mentioned combined heat and power applications for Bioheat.

“That would be a tremendous step forward,” Huber said. “The best way to reduce carbon footprint is to start generating electricity closer to home. The long lines of wire for electricity generation generally lose 30 to 40 percent of electricity power in their transmission. If you’re doing electricity generation at home in local communities, that wastage goes away. If you’re burning oil in a generator, you’re not doing anything really positive, but if you’re burning Bioheat as part of that system, you’ve empowered Americans to generate electricity from a biofuel in air conditioning, heating and so forth.”

The oilheat industry has a vision to move toward greater biodiesel blends, beating out natural gas, which is a finite fossil fuel, on environmental, economic and renewable bases.

“This is a long-term vision,” Huber said, “and this is where the heating oil industry has to go.”