AEC Update: Learning from Experience

The American Energy Coalition routinely and continually assesses threats to the heating oil industry and responds to identified threats through its various messaging platforms.

Over the last decade or more, the biggest threats have come from natural gas utilities and their efforts to convert oil-heated homes to gas. In the last couple of years, a new threat has emerged: the environmental movement’s campaigns to eliminate all fossil fuels.

The Trump administration appears to be fossil fuel friendly and believes the growth in crude oil and natural gas production in our country is good for the U.S. economy and jobs, while offering geopolitical advantages the U.S. has not seen in decades. Energy independence is within reach, and the Trump administration appears to be trying to remove any and all obstacles.

Nonetheless, environmental activists have not abandoned their war on fossil fuels. They have refocused their attention away from national efforts in favor of state legislation and regulations. Most northeastern states have passed legislation that requires specific carbon reductions, by specific amounts, by specific benchmark dates, or have aspirational legislation pending to do just that. This is a new threat to oilheat. AEC began to respond to this new threat last year.

More specifically, the initiative to “electrify everything” is unrealistic and unachievable in the short term, in our view. To convert all space heating and domestic hot water production to electric heat pumps, and to convert all transportation assets to “electric vehicles” would result in an increase of 125% to 130% in electric demand, by some estimates.

That would require additional generating capacity, and a significant build out of the electric grid to deliver the increased electric load. This would be unachievable in the time limit specified, and it would be unachievable if the added capacity were to come from only wind and solar sources.

The oilheat industry has a partial solution, Bioheat.  It takes space heating and domestic hot water out of the mix, reducing electricity needs, and the oilheat infrastructure is already in place, reducing the structural needs and related costs. Accordingly, AEC is fighting against the “electrify everything” initiative, and promoting the benefits of Bioheat fuel.

Look at recent events in Connecticut. The state’s two electric utilities have been under fire for a month or more. A day hardly goes by without a negative article in The Hartford Courant vilifying the utilities. It began with a recent uproar over exorbitant rate increases that the utilities have implemented and are having difficulty justifying. Investigations have been launched by the state’s legislators and its Public Utilities Regulatory Authority.

But mid-uproar, Tropical Storm Isaias hit the state.  Eight hundred thousand customers in Connecticut lost power, some for as long as nine days. Electric customers in Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island and other states also lost power for multiple days. This caused major disruption to daily routines, not to mention medical challenges for some and spoiled food to many. Imagine having only an electric vehicle to drive and not being able to recharge it for nine days. The “electrify everything” plan is not a good idea, as this tropical storm has illustrated.

Utilities, gas or electric, are by definition inefficient, expensive, bloated, and unreliable “legal monopolies.”  Some, including Sen. Richard Blumenthal (D-Conn.), have called for breaking up these unreliable, and underperforming utilities. If they can’t handle the impact of a tropical storm, what would happen if we suffer the impact of a full-blown hurricane?

We need to think twice about the “electrify everything” plan. Whether judged by cost or reliability, the utilities cannot pass the consumer satisfaction test. — Thomas J. Tubman

Thomas J. Tubman is executive director of the American Energy Coalition, which promotes the benefits of oil heat in comparison to other energy sources, particularly natural gas.