September 25, 2017
Matt Cota

The oilheat industry is in transition as the number of oilheat customers, gallons sold per home and aggregate sales has declined significantly here in Vermont and across the northeast. According to the U.S. Census, the number of oil heated homes in Vermont declined by nearly 31,000 in the decade between 2005 and 2015. Only 45% of Vermonters identify oilheat as their primary source of heating, which is down from 90% fifty years ago. The aggregate number of residential oilheat gallons sold in Vermont has declined by 50% over the past half century, from 150 million to 75 million gallons. The number of gallons consumed per home is also down by 50% over the same time period, from approximately 1500 to 700 gallons per winter.

In response to declining gallons and marketshare, oilheat companies have become more diversified by offering other heating fuels such as pellets, propane and biodiesel in order maintain their customer base. Traditional oilheat companies are also providing a variety of new services, such as plumbing, electrical, excavation, property maintenance, solar installation, and weatherization to name a few. The industry has also undergone consolidation, as it becomes more difficult for companies to survive in a declining market. The average Vermont oilheat company sells about 2.4 million gallons, has about 2000 customers, and 12 employees.

Despite these developments, the future is bright for the oilheat industry here in Vermont. After nearly one hundred years of keeping Vermonters warm, oilheat is adapting to the changing world. In response to environmental concerns of customers, the oilheat industry embraced a transition to an ultra-low sulfur, biodiesel blended product back in 2009. The first part of that initiative comes to fruition on July 1, 2018 when Vermont adopts a 15ppm sulfur standard for oilheat. This transition reduces particulate matter pollution, as well as maintenance and service costs. Ultra-low sulfur oilheat also allows consumers to utilize more efficient condensing heating systems. The next step is the transition to a biofuel blended product which reduces greenhouse gases and our dependence on fossil fuels, while increasing local fuel production.

The focus of Vermont’s current energy policy is to increase the amount of renewable electricity consumed in the state while decreasing fossil fuels used in heating and transportation. While this seems in conflict with Vermont’s oilheat providers, the increase sales of biofuel blends would help facilitate this process. Furthermore, the transition to all-electric vehicles is likely to happen faster than the transition to the all electric heated home. A car owner typically trades up every five years while the average homeowner waits twenty years before upgrading a heating system. While cold climate heat pumps will reduce demand for oilheat, in most cases, these systems do not eliminate the need for a back-up system. And since Vermont will likely remain a cold and rural state for many decades to come, an oilheat industry that transitions to local produced, renewable liquid fuel has a bright future indeed.

Matt Cota
VFDA Executive Director