Legislation that would require all heating oil sold in the state to contain at least 2 percent biodiesel fuel by July 2015 has reached the desk of Gov. Andrew M. Cuomo, who will decide the bills fate by the end of January.
The legislation, which is backed by upstate farmers who grow soybeans that could be used for biodiesel production, officially reached Mr. Cuomos desk the last week of December; it was approved by the state Assembly and House in June. It would require that heating oil in certain downstate counties contain at least 2 percent biodiesel by Oct. 1. By July 2, 2015, all heating oil sold statewide would have to meet that standard.
The governor delayed considering the bill for six months because its approval requires an amendment to the refundable heating oil tax credit program for biodiesel purchases, said Julia C. Robbins, executive director of the New York Corn and Soybean Growers Association. That amendment would allow consumers to remain eligible for a tax credit of one cent per gallon for each percent of biodiesel that is blended with heating oil, but theyd no longer be eligible for a refund on the 2 percent of biodiesel that would become mandated by law. For instance, a purchaser of fuel with a mixture with 3 percent biodiesel in heating oil would be eligible for a refund of one cent per gallon instead of three cents; the maximum refund is expected to stay the same at 20 cents per gallon.
We worked with the governor to come up with a compromise, and at this point were confident he will sign the bill, Ms. Robbins said. The law would create a direct market for soybean farmers who are now exporting their product overseas, and more competition will give them a better price for their product.
In December, Ms. Robbins joined soybean farmers attending the National Biodiesel Board Big Apple Bioheat Tour in New York City, where city officials and researchers, along with agriculture groups from across the country, discussed the merits of blending biodiesel fuel with home heating oil.
As the largest municipal consumer of heating oil nationwide, New York City implemented a citywide 2 percent biodiesel requirement in October 2012.
The blend of biodiesel an alternative fuel most often made from soy, palm or canola oil and heating oil is commonly called bioheat. Bioheat has been used in Europe for more than two decades, but only recently has begun to gain traction in the U.S. heat industry.
Research conducted by Brookhaven National Laboratory on Long Island found that bioheat has little to no negative impact on a burners performance, while also improving emissions, lubricity and efficiency of combustion. Levels of sulfur, carbon monoxide, smoke, hydrocarbons and nitrogen oxide also are reduced by the blend, studies concluded.
Those benefits have made it a boon among industry and environmental groups across the country, said John D. Maniscalco, CEO of the New York Oil Heating Association, which represents the industry in New York Citys five bureaus.
This has been proven as efficient and safe, and its been actively used in New York City for two years, said Mr. Maniscalco, who helped lead the push for the legislations approval. We are really pleased that weve cleaned up our heating oil so much, and eventually wed like to get the blend (of biodiesel) up to 20 percent.
Across an eight-county region in the north country, the average price per gallon of heating oil decreased slightly from $3.97 on Jan. 6, 2013, to $3.96 on the same day this year, according to the New York State Energy Research and Development Authority. Over the same period in New York City, by contrast, the price per gallon dropped by 2.1 percent, from $4.25 to $4.16; statewide, the average price was $4.07 on Monday, down 1.2 percent from $4.11 on the same day last year.
The drop in the price of heating oil over the past 12 months in New York City suggests that the 2 percent biodiesel requirement has helped stabilize prices, Mr. Maniscalco said. He said he believes implementing the statewide requirement would help stabilize the price because the state will be less dependent on foreign crude oil.
I think (heating oil) prices would continue to stay where they are or go down if the proposed state law is passed, he said, adding that demand for soybean oil should be a boon for farmers. Farmers in the northern tier are excited about this legislation because it involves soybeans. Right now (the Northeast) gets a lot of soybeans from the Midwest, but I think youll see more soybean growers to work with in the region.