Governor Signs Legislation Requiring Oil Industry to Provide Cleaner Heating Fuels

ALBANY, NY (07/20/2010)(readMedia)-- Governor David A. Paterson today signed legislation that will require the oil industry to reduce the amount of sulfur in the fuel oil used to heat New York homes and businesses. The cleaner fuel will lead to lower levels of dangerous fine particle pollution that makes people sick and shortens lives. The new measure will begin with the 2012-2013 heating season and continue thereafter.

"Reducing the levels of sulfur in heating fuel oil will improve the health of New Yorkers and our environment, and will help consumers cut their energy bills through reduced fuel use and lower maintenance costs," Governor Paterson said. "The energy, health and environmental benefits of this legislation are indisputable. It is critical, however, that Legislators work to pass a chapter amendment this year that would ensure that tax exempt status of heating fuel oil is maintained. While the law does not take full effect until 2012, I will do everything in my power to ensure that homeowners are protected as quickly as possible, securing a shared win for the environment, homeowners and the health of all New Yorkers."

The bill amends the environmental conservation law to set an upper limit of fifteen parts per million for number two heating fuel oil for use in residential, commercial or industrial heating applications – the same standard set by the U.S. Environmental Protection Agency for diesel fuel. Current levels of sulfur in heating fuel average two-thousand parts per million and can, under State regulations, be as high as ten thousand parts per million.

One issue that was not taken into account by the Legislature was how to treat this fuel for tax purposes. The lower sulfur fuel is viewed by the Department of Tax and Finance as if it were "enhanced diesel fuel." Enhanced diesel also has a sulfur concentration of 15 parts per million and for on-highway uses is taxed at roughly 40-cents per gallon. Thus, there is need for action that clearly protects the end use heating oil customers from having to pay a tax up front and seek a refund for use of the cleaner fuel.

High levels of sulfur in fuels are naturally occurring, but proven refinement technology can nearly eliminate it before the fuel is sold to end use consumers. There are tremendous health impacts associated with particulate pollution which are a direct result of the high sulfur in this fuel. In New York City, high levels of particulates in certain neighborhoods are directly related to buildings that burn high sulfur fuel oil. Fine particle pollution is linked to premature death, cancer, and heart attacks and asthma attacks in those with preexisting disease. Sulfur also decreases the energy efficiency of heating units, contributing to a waste of energy and money.

The clean fuel will be required to be sold on or after July 1, 2012. The legislation also provides a mechanism for the Governor to temporarily suspend the requirements should a determination be made that supply of the fuel is inadequate to meet demand. The legislation enjoyed support from a diverse set of interests including: public health advocates, environmental groups, local government leaders and local oil heat dealers.

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