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Gov. Deval Patrick has not announced any
natural gas expansion policy, but the matter
is under study at the state Department of
Energy Resources (DOER).
Michael Ferrante, President of the
Massachusetts Energy Marketers Asso-
ciation (MEMA), said DOER is looking at
options for accelerating the expansion of
natural gas to help the state’s obligations
under the Massachusetts Global Warming
Solutions Act of 2008.
The state agency has hired consultants
to perform a natural gas expansion study
and prepare policy recommendations, and
Ferrante sees an imminent threat to oil heat
dealers. “They’re calling it a study, but to use
their phrase they are studying policy options
along with strategies and rate models that
would advance the use of natural gas.”
Indeed a preliminary report on the study
by consultant Sussex Economic Advisors is
focused largely on potential rates of conver-
sion to gas heat in different policy scenarios.
“These are clear efforts to further erode oil,”
Ferrante observed.
MEMA pushed back against the study
from the outset and made it clear to the
DOER that heating oil dealers were very
concerned about the state’s approach, he
said. “The governor has not stood up and
said he wants to convert X number of
homes, but our state clearly has a green-
house gas emissions law and goals set by
the Legislature that they have targeted,”
Ferrante said. “This is proof of that.”
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“What scares me is that they have
the underpinnings to move forward on
this. It could be done in the name of the
Global Warming Solutions Act. We have
established state laws that call for emis-
sions reductions, and this could be one of
the roadmaps. The governor could use the
Sussex report, if it is favorable in terms of
encouraging conversions, and say we are
following this report and we see this as a
good policy.
“Once this report is done and they start
talking about it, I think you will hear the
governor and key people in his administra-
tion talking more about fuel conversions.
That plants the seed in the heads of hun-
dreds of thousands of oil heat customers
and gives the utilities tremendous cover to
advance their marketing. Believe me, we
would love to be able to stand up and say
that the state thinks that oil heat is the best
choice for the state.”
MEMA has participated in the study as
a stakeholder, filing a report that makes
a case for heating oil as environmentally
sound fuel and refuting the notion that
today’s low natural gas prices will continue.
(See related story, Page 24.)
“Our task was
to refute the claims about natural gas being
a better fuel and show that there should not
be an aggressive plan for moving people to
natural gas,” he said.
“Our board views this as a very serious
threat, an attempt to erode their businesses
once and for all,” the MEMA chief added.
“There is an off-oil policy that exists here.
[State officials] see us as part of the energy
mix, but they would not be unhappy if our
role was diminished.
“The fact that they are using taxpayer
dollars to fund this is uncomfortable for us.
Government funds are being used almost
to eviscerate this industry. We don’t see
taxpayer dollars being spent on looking to
expand the use of Bioheat
®
.”
MEMA has also raised to DOER the
question of whether the gas utilities are
prepared to support hundreds of thousands
of new customers, given the identified prob-
lems with natural gas shortages and leaking
natural gas pipelines in Massachusetts.
“We are encouraging them to look at
the problems with the natural gas industry
before looking at expansion,” Ferrante said.
“If you’re going to add hundreds of thou-
sands of customers to lines that are already
strained due to supply and demand, that is
a question that has to be explored.”
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In New York, the largest-volume oil heat
state, there is also a government-initiated
natural gas expansion plan. The New York
Public Service Commission (PSC) floated
the plan in late 2012 to expand the natural
gas footprint, and the oil heat associations
in the state participated as stakeholders.
They filed four reports covering potential
environmental and economic impact as
well as current assumptions about oil and
gas prices, according to Kevin Rooney,
CEO of the Oil Heat Institute of Long Island
(OHILI).
(See related story, Page 24.)
In a preliminary study, the PSC identi-
fied more than 1.1 million homes that
could be targets for oil-to-gas conversions,
based on their proximity to a gas main. To
date there has been no report issued, and
it is unclear whether the Commission is
continuing to pursue the plan, according to
Rooney.
He said the utilities in New York State
welcome the opportunity to convert
hundreds of thousands of customers to
natural gas heat but are reluctant to invest
in new infrastructure without a favorable
rate structure that shifts the cost away from
shareholders.
Rooney said it’s hard to see how natural
gas expansion would benefit the state. “Is
the goal to improve the environment?
We’re the only state that uses ultra-low
sulfur heating oil with a bioblend. Where is
the advantage? It all comes down to price,
price, price, but you don’t make long-term
investments based on short-term price
disparities. That’s just plain dumb.”
Even with current favorable price con-
ditions, natural gas is not something every
New Yorker wants, Rooney noted. “People
don’t necessarily buy only on price. They
also buy based on intangibles, including
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