Bioheat may see surge of its own

High crude oil prices could convert some homeowners

Heating homes with used french-fry oil may get a much-needed boost in North Carolina from spiking crude oil prices.

Bioheat, a blend of traditional home heating oil with vegetable or animal oil additives, has gained acceptance in recent years in New England, where most residents use oil to heat their homes. But the biofuel blend is still an obscure alternative home heating source in this state, where only 8 percent of households use heating oil in the winter.

The N.C. Solar Center at N.C. State University is promoting bioheat to heating oil distributors as a clean alternative to pure heating oil. It hopes to soon start a campaign to educate the public on the advantages of the biofuel.

Bioheat -- which blends heating oil with waste fryer oil, soybean oil or animal fats -- has been the preferred fuel of those motivated by environmental concerns because it burns cleaner than pure oil. It has had trouble gaining wider acceptance as it typically costs at least several cents a gallon more because of processing and distribution costs.

But with heating oil prices up 35 percent in the past year, bioheat is finally becoming cost-competitive, local distributors say. This week's $100 per barrel oil spike may mark the economic tipping point at which the environmentally preferable energy resource can compete with the established fossil fuel.

Because the biofuel blend is usually priced to track the fluctuating price of oil, bioheat won't be a bargain, but for once it might not be the most expensive choice.

Heating oil costs about $3.11 a gallon on average in North Carolina and $3.34 a gallon nationwide, according to the U.S. Department of Energy.

One of the state's main bioheat distributors, Blue Ridge Biofuels in Asheville, charged $3.32 a gallon Thursday, which is less than many heating oil distributors charge in the western part of the state, said Jason Wise, the company's feedstock coordinator.

"From a heating oil perspective, this [bioheat] is the best thing since sliced bread, because they've had nothing new to sell for decades," said Paul Nazzaro, petroleum liaison at the National Biodiesel Board, a Missouri-based trade organization that promotes biofuels. "This is a great opportunity for the heating oil industry to reinvent itself."

Heating oil is a shrinking commodity in North Carolina, where most new homes are supplied with electric heat or natural gas. While utility heat comes from domestic resources such as coal or nuclear power, heating oil has a major image problem as a petroleum import from some of the most unstable parts of the world.

A selling point for bioheat is that it pollutes less, emitting 20 percent less nitrogen oxide than heating oil. It generates heat as efficiently as heating oil and won't damage equipment in lower blend ratios. Homeowners could heat their homes with a 100 percent blend of bioheat, if it were available to them, but they would have to retrofit their furnaces with new gaskets and filters to prevent clogged pipes and equipment damage.

But the alternative fuel still faces obstacles -- the biggest in this state being its lack of availability.

The N.C. Solar Center lists 20 independent oil dealers that offer bioheat or plan to offer the fuel, but several in the Triangle reached Thursday said they have no immediate plans to sell the product. That means a fraction of the state's estimated 100 to 150 heating oil distributors sell bioheat fuel.

Red Star Oil Co., the leading Raleigh heating oil distributor with about 900 oil customers in the Triangle, does not sell bioheat and has not received inquiries about the product, said salesman Ray Brackett. For Red Star Oil, bioheat presents a logistical challenge: To market the blend, the company would have to reserve a tanker truck to hold the mixture until enough customers drained the tank. That's not a solid economic proposition for the company.

Blue Ridge Biofuels is one of the few who can sell bioheat exclusively. It has more than 500 customers in the western part of the state. It collects waste vegetable oil from restaurants to prepare its own biodiesel, but to meet customer demand the company has to buy most of its biodiesel from other sources.

For bioheat to reach a wider audience, distributors will require a greater availability of biodiesel to blend the fuel. And bioheat is also dependent on unpredictable global trends: consistently high energy prices that help make all renewable fuels cost-competitive.

"It will work its way into the mainstream as long as oil prices remain high," said Gary Harris, executive director of the N.C. Petroleum Marketers Association.