In the last issue we reported on some of the issues facing the oil heating industry. While the Canadian Oil Heat Association is working hard to tackle the problems, one can’t help but wonder if the industry isn’t in a “death spiral,” as one person put it at the group’s annual conference.
When I was a youngster in Victoria, B.C. our home was heated with coal. The coal heating industry was still pretty significant at the time. But the same company that delivered coal to our home also sold oil. So it was only a matter of time until our big coal furnace had an oil burner installed. Where is the coal heating industry now? There are still a few coal-fired boilers out there, but it’s far from the mainstream when it comes to heating buildings.
Oil heat is a long way from that but there are troubling signs. New regulations designed to make oil heat “safe” have dramatically increased costs to the homeowner. Many steel oil tanks went 30-40 years without any problem; now they have to be replaced more frequently. Oil containment devices have to be installed. As well, insurance companies are making it difficult and expensive to obtain homeowners insurance for an oil-heated home. Every time a new product is introduced to make oil heat “safe,” it seems that insurance companies want to make that product mandatory, adding more cost to the homeowner who is paying a premium for insurance regardless.
Fuel price spikes don’t help either. The cost of No. 2 heating oil has dropped around 25-30 cents a litre since its 2014 high, according to Statistics Canada, but most homeowners are still paying over a dollar per litre.
As if all this wasn’t bad enough, there’s a relatively new technology that’s really putting the squeeze on oil heat. Plumbing & HVAC has written a number of articles on the explosion of air-to-air heat pump sales in Atlantic Canada. With a climate ideally suited to the technology, which can provide heat down to -24C, the demand is such that utilities have cancelled rebates because they found them unnecessary.
So where does this leave oil heat? More and more people in the industry are talking about it as a backup heat source. But if a home or building owner installs heat pump(s), are they likely to keep oil around given the hassles with insurance and the cost of complying with safety/spill prevention requirements? Other heat sources make more sense.
While the oil industry fights the good fight, it faces so many challenges beyond its control that it can be difficult to remain optimistic. And that’s unfortunate because, among other things, it employs an awful lot of people in this industry.