As New York City Phases Out No. 6 Heating Oil, What Should Building Owners Do?

 As New York City Phases Out No. 6 Heating Oil, What Should Building Owners Do?

No. 6's days are numbered.

In August 2010, the New York City Council passed Local Law 43, which under a proposed Department of Environmental Protection rule amendment requires all buildings in the five boroughs using No. 6 heating oil to switch to a cleaner alternative—either No. 4 oil, No. 2, or natural gas. Buildings with heat and hot water boilers and burners using No. 6 oil have the option of first converting to No. 4 oil by 2015, or they can switch directly to No. 2 oil, gas, or both. Buildings using No. 4 heating oil have until 2030 to switch to No. 2 oil, gas, or both. All newly installed boilers, however, must also burn No. 2 oil, gas, or both.

Although only 1% of New York City's building stock (approximately 10,000 buildings) have boilers that burn No. 6 and No. 4 heating oil, which are high in sulfur, nickel, and other pollutants, they account for 90% of the city's soot pollution, more than all the cars and trucks in the city combined.

Switching to No. 4 Oil

If your building is currently using No. 6 oil, you can make a relatively inexpensive switch to No. 4 oil. The switch involves using up the No. 6 oil in the tank, cleaning the tank if necessary, adjusting burner settings, making some minor modifications to the oil pump and oil lines, and starting to use No. 4 oil. The DEP estimates the conversion will cost approximately $10,000.

Switching to No. 2 Oil and/or Gas

Buildings already using No. 4 oil—or buildings using No. 6 that want to bypass switching to No. 4—have the option of converting to either No. 2 oil or gas. They can also switch to a dual-fuel system that burns both No. 2 oil and gas, which is known as an interruptible system.

In an interruptible system, gas is used approximately 95 percent of the time. When gas demand is high, say on a very cold day, Con Ed may temporarily shut off the gas supply and require the building to burn No. 2 oil until peak gas usage subsides.

The switch from No. 4 to No. 2 oil is similar to the switch from No. 6 to No. 4, but it's a bit easier and less expensive because there is no pre-heating equipment, which is needed to decrease the viscosity of the very heavy No. 6 oil. If they are in good condition, the existing boiler and oil tank used for either No. 6 or No. 4 oil can still be used with No. 2, but a dual-fuel burner for burning both oil and gas in an interruptible system will have to be installed.

A heating system that burns only gas—known as a firm gas system—will also require a new burner. Tanks previously using No. 6 will also have to be decommissioned if you are converting to a gas-only system.

 

Gas Requirements

Both interruptible and firm gas systems require a number of capital costs. First, even if the building already uses gas service for cooking, a larger gas main may be needed for the additional gas supply for heating. New gas piping may have to be installed from the gas main to the boiler room, and a gas booster pump may also be necessary to increase the gas pressure to ensure adequate supply to the burner. Gas-based heating systems also require a dedicated gas-meter room, which must be enclosed, fire-rated, and located as close as possible to where the gas main enters the building. The room must also have proper ventilation, and it cannot be used for storage.

Fuel Costs

Historically, No. 2 oil has been more expensive than No. 4, which has been more expensive than No. 6. Because of the amount of refinement each grade of heating oil requires, the relative price position of the three fuels should remain consistent. The price of natural gas, however, has fluctuated relative to heating oil. Currently it is less expensive than No. 2.

One benefit of an interruptible system is that it gives buildings the flexibility of burning both No. 2 oil and gas, depending on the price of each. Keep in mind, however, that switching to an interruptible system may require installing a dual-fuel burner and other equipment that a system burning only No. 2 oil doesn't need. Firm gas systems also require new equipment, but utilities typically offer less expensive rates for firm gas than they do for interruptible systems.

Rebate Programs for Converting

Con Edison

To defray the significant upfront costs of switching from oil to gas or to an interruptible oil/gas system, Con Edison offers a rebate program for small to midsize residential properties. The program, available to New York City and Westchester buildings with five to 75 units, offers a rebate of $500 per unit and an equipment rebate up to $15,000. The building must have existing gas lines for cooking, and the work must be installed by a licensed New York State contractor participating in the Con Ed Multi-Family Energy Efficiency Program. For more information: www.coned.com/sales/naturalgas/multi_res.asp

NYSERDA

For buildings with more than five units converting from No. 6 heating oil to No. 2 oil, gas, or other clean-fuel alternatives, NYSERDA's Multifamily Carbon Emissions Reduction Program provides rebates of $30 per ton of reduced carbon emissions, up to $175,000. The program, however, is not accepting any more applications for conversions to firm gas systems until further notice. For more information: http://getenergysmart.org/MultiFamilyHomes/OilConversions/Overview.aspx