Fuel oil dealers in Canada face many of the same challenges as dealers in the U.S., including, in some regions, stiff competition from the natural gas industry.
“It’s not so bad in Atlantic Canada, especially where I live here in Prince Edward Island,” said Russell Noonan, current chairman of the Canadian Oil Heat Association (COHA) and president of Noonan Petroleum, Summerside, PEI. “People’s choices for heating are very limited” in PEI, Noonan said. That is a contrast to Ontario, “where natural gas is a real big threat to the oil industry,” Noonan said.
In some instances, fuel oil dealers in Canada are addressing challenges rather differently than U.S. dealers.
“Retire your Tank” is a case in point. It is a campaign by COHA to encourage homeowners across Canada to upgrade their storage tanks. The cash-back tank replacement program gives homeowners a $125 rebate on the purchase of select models. The program was launched on May 15 and is scheduled to conclude on December 31.
“The ‘Retire your Tank’ program is not only an effective way to entice homeowners to upgrade their tanks, it’s also a positive signal to the insurance industry that our members take risk reduction and loss prevention very seriously,” said Veronica Yu, president and chief executive officer of the association.
The $125 rebate comprises contributions from heating equipment retailers and participating tank manufacturers Granby, Vilco and Roth.
“‘Retire your Furnace’ was a very successful program initiated by the Nova Scotia government in 2006," Yu said. “We decided to use a similar approach with the tank replacement program since it’s a concept that is very familiar to consumers.”
And it is also welcomed by insurers, Noonan said. “They’re very, very positive about our program and no reason why they wouldn’t be,” he said. Every time an older, single-walled tank is replaced, Noonan said, “It’s just one less spill they might have to deal with.
“Some of these [older] tanks are failing at seven, eight, nine years old and it’s a black eye on our industry,” Noonan observed. Some insurance companies are starting to charge surcharges for people that heat with oil, he said. “I know companies have refused people insurance that heat with oil,” he said.
“We met with all the major insurance companies here over the winter and all of them are very positive about this program, and so are the provincial governments, their departments of environment,” Noonan said. “The number of tanks being changed under this program certainly exceeds what would normally be changed during the summer and fall months, which is when you do change tanks,” Noonan said. “It’s very well received. It’s good for our industry, it’s good for the insurance industry, it’s good for the environment.”
Retire your Tank also fits nicely with the GreenTech program since homeowners’ new tanks must be installed by a COHA GreenTech certified technician or by an installer recognized by the authority having jurisdiction who has attended tank installation “Best Practices” training through COHA.
“Best Practices of Fuel Oil Storage Installation Training” is designed to provide technicians with everything they need to know about the tank replacement incentive program, upgrade their skills and learn a systematic and comprehensive approach to loss prevention endorsed by the insurance industry.
This includes methods of managing residential fuel oil tanks, pre-delivery, and routine and preventive maintenance.
Administration of Retire your Tank is being handled by COHA. Completed paperwork is submitted to the COHA office and a check issued to the homeowner once the application has been approved.
A marketing kit for association members who want to participate in Retire your Tank is available from the association. The kit includes consumer brochures and a counter card/poster. Homeowners are able to access program information via www.retireyourtank.ca.
Together, the replacement program and the training program are meant to improve industry and public confidence in oil heat as a modern, environmental fuel of choice for Canadian households.
“It is our goal to make this program as easy as possible for our members to implement and for homeowners to participate,” Yu said. “We would like as many members to participate as possible – that will allow for a greater geographic reach, as well as a more unified front from an industry standpoint.”
A regulation requiring that two percent of all of Canada’s production volume be biodiesel is scheduled to take effect in 2012.
That doesn’t mean that two percent of heating oil in every province must be biodiesel, Noonan was at pains to point out. “As long as there’s two percent across the country that’s what they’re looking for,” he said, referring to the national government. “That [equivalent of] two percent could all be in Ontario,” he said.
As for the performance of such blended fuel in cold temperatures, Noonan said, “It’s a very big concern to the refineries because it’s a big expense for them and they’re not quite ready yet. They’re trying to get it delayed.
“The government doesn’t want to extend the deadline,” Noonan said, “but I think it may have to if the refineries say they can’t [satisfy the 2 percent requirement] till June or whenever.
“I have concerns as a fuel oil supplier that this product could be sitting in my truck overnight while it’s minus twenty-five out and we have a problem pumping that product the next day,” Noonan added. “We don’t have all the answers yet.
“But I’m also pretty confident we’ll not see it here in Prince Edward Island in February,” Noonan said. “I’m not saying we won’t see it in the spring or the following year, but I think they’ll concentrate in a certain area to get that two percent. Two percent of all the product that’s sold in Canada is very, very minimal.”
Cleaner Heat, a marketing effort to get the word out that fuel oil heat is cleaner and greener than it was, continues to reach a receptive audience.
“There’s no doubt about it,” Noonan said, “the low sulphur in the fuel gives us a lot less emissions. Also today the equipment out there that’s available for heating homes with oil is so much more efficient and puts so many less emissions into the environment that there’s no doubt we certainly are a cleaner heat.”