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On the verge

NH heating oil’ dealers say prices may be ready to level off

Staff Report
February 16. 2014 4:12PM

Don Godfrey of Allenstown, a delivery driver for M. L. Halle Oil Co., makes a delivery of heating oil to a residence in Manchester. Dealers in New Hampshire say there are indications that the upward spiral of heating oil prices may be on the verge of leveling off. (UNION LEADER FILE)

MANCHESTER — Heating oil dealers in New Hampshire say there are indications that the upward spiral of heating oil prices over the past several years may be on the verge of leveling off, and credit new technologies that they say are making the fuel more efficient while lessening the environmental impact of heating with oil.

The dealers participated in a roundtable with New Hampshire Sen. Jeanne Shaheen on Friday. The session followed passage of a farm bill last week that reauthorized the program, dormant since 2010, that funds research into more efficient uses of home heating oil. The National Oilheat Research Alliance (NORA) is funded by oil dealers at the wholesale level.

Shaheen said the organization’s work can help oil dealers compete with other fuel suppliers on price.

“It does research into how can we make oil heat more efficient and cleaner,” Shaheen said. “It provides innovative research to improve technologies for furnaces to make them burn more efficiently.”

Patrick Miller of Eastern Propane and Oil said innovations such as the addition of biofuels to the petroleum mix and development of efficiencies in burning oil help make oil cleaner while burning more completely.

“It’s a case of educating consumers to the realities of oil, that it is a clean burning product and is constantly improving its efficiency levels,” he said. “A simple thing like an outdoor reset on a customer’s equipment can save them 15 percent on their fuel consumption; a heating system doesn’t have to work as hard in October as it does in January.”

The NORA program is funded by a fee of two-tenths of one percent on the wholesale cost of oil. Shaheen said the legislation provides that the fee can’t be passed along to customers, although the American Heritage Foundation, a conservative think tank, calls that provision “unenforceable.”

Oil dealers and companies are overwhelmingly locally-owned companies, in contrast to large concerns that extract natural gas from the earth or transport it to customers.

Shaheen said the oil research alliance allows the local oil company to find and use new methods of remaining competitive.

“It’s in their interest to do what they can; if they can’t keep oil affordable for their consumers, they’re going to lose their consumers,” Shaheen said. “We heard dealers tell how it helps them differentiate what they can provide to consumers. It helps them improve the technology for furnaces. They make it burn more efficiently (and) reduce pollution.”

Oil prices in New Hampshire spiked at more than $4 dollars per gallon earlier this month.

Through the season, heating oil in New Hampshire was typically $3.67 per gallon during Thanksgiving week and was $3.995 per gallon this week according to the federal government’s Energy Information Administration.The price of propane rose dramatically earlier in the heating season, and was at an average price of $3.77 per gallon earlier this year, according to the state Office of Energy and Planning.

Propane prices rose sharply for much of the winter; federal reports of average prices shows oil increased about 11 percent since mid-November while propane prices increased about 25 percent.

For dealers such as Glenn Davis of Halle Oil Co. of Manchester who are seeing a smaller segment of the new housing market opt for oil heat, making oil a better economic choice requires research to make sure the product is more efficient.

“We need to compete with other fuel sources,” Davis said. “This is a way that we get cleaner fuels, and better running equipment is very beneficial as well.”

The oil dealers say they think their product has an advantage in that it provides more heat, and say research will help their product become more attractive from a pricing perspective.

“Oil in the future has a plan to be cleaner,” David said. “I think you’re going to see prices level off on the next four or five years.”

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