With heating oil sales flat and with ongoing, negative news about overseas imports and pollution in the Gulf of Mexico, one of northern New England’s leading petroleum dealers is promoting an alternative fuel — propane.
Portland-based Dead River Co. wants to entice residents to switch this winter to an abundant energy source that’s produced in North America and burns cleaner than oil. The company is running an advertising and direct mail campaign that offers up to 100 free gallons to new home customers. An online promotion says: “Propane is becoming the fuel of choice — from heating water to cooking meals to heating homes.”
In part, the campaign reflects Dead River’s assessment of how the public may be reacting to current events.
“The continued drum beat, for better or worse, about our dependence on foreign oil is going to have some traction,” said Robert Moore, Dead River’s president and chief executive officer.
In Moore’s view, recent discoveries of natural gas in North America and federal policies aimed at cutting Middle East oil dependence will make propane less expensive and more available. The so-called BP effect — the impact of the historic oil spill disaster — is harder to measure, but may be contributing to increased interest in propane, he said.
“I think that’s part of the picture,” he said.
Moore’s comments come as oil costs and demand are low following the recession, but remain a worry for customers who remember record prices in 2008. His assessment stands apart from the views of some major competitors, who sell propane but say they aren’t aggressively promoting it over fuel oil.
“I think most of our members are happy to sell either product,” said David Martin, board chair of the Maine Energy Marketers Association, which represents many of the state’s oil dealers.
Propane won’t replace heating oil in Maine anytime soon. Eight in 10 Maine homes heat with oil or kerosene; propane warms roughly 5 percent of them. But aside from providing service and replacing older equipment, oil heat has virtually no growth in Maine, Moore said, as people look for alternatives.
Propane has grown as an alternative for homes and businesses that are far from natural gas, the country’s dominant heating fuel. Recent supplies have boosted natural gas use in Maine, but much of the state is too rural to be served by distribution lines. That makes Maine a logical place for propane to expand.
Propane is produced from both natural gas and crude oil refining. Most of the propane burned in Maine arrives by rail from western Canada. Some comes from overseas and is shipped to Newington, N.H. A Canadian railroad workers strike crippled supplies in Maine a few winters ago, leading some dealers to diversify supplies and upgrade local storage.
Dealers that promote propane like to call it a versatile fuel, useful for heating, cooking, drying and hot water. The equipment is small and takes up little room. The gas burns so cleanly that burners need less maintenance. And the latest heating equipment, which can reach overall efficiencies above 95 percent, qualifies for a federal tax credit of up to $1,500.
Those attributes were selling points for Chanda Turner and her husband, Ryan Woodside, of Windham.
Ready to replace a 25-year-old oil boiler, the couple considered their options before buying a European-made Baxi propane boiler from Dead River. The total cost was around $8,000, before the tax credit.
The unit is small enough to hang on a wall, freeing up space in their tight basement. Propane also offers the flexibility to switch their stove and dryer to gas in the future, the couple said.
A high school biology teacher, Woodside said he wants the country to move away from oil. He expects oil prices to spike again, and said he was motivated to find a more-efficient heating source for his home.
“Propane’s not as good as solar, but it’s better than oil,” he said.
One of the state’s largest solar equipment installers has reached a similar conclusion.
ReVision Energy of Portland is better known for installing solar electric and hot water systems, as well as wood pellet boilers. But on its Web site, it calls propane, “an important part of our transition from oil-based heating to a cleaner, renewable-based economy.” It sells an American-made Prestige Solo boiler, which has an overall efficiency of more than 95 percent.
“We look at propane and natural gas as the lesser of evils,” said Phi Coupe, a managing partner at ReVision.
The company has offered propane equipment for a few years, but is getting more phone calls and e-mails since the BP oil spill, Coupe said.
“These are people who have been meaning to do something for years, and this was the last straw,” he said.
But those decisions only represent a small segment of the market, according to Martin, at the energy marketers association. It’s true that many oil dealers also promote propane, he said, in part because it opens up an avenue to sell new equipment. But Martin, who also is a vice president at Webber Energy, said he doesn’t see an increase in customers switching to propane when their oil burners need replacement. And in general, he said, the industry doesn’t want to call attention to the BP oil spill as a reason to switch fuels.
Martin’s opinion is shared by John Peters, president of Downeast Energy.
“I don’t see a wave of fuel switching because it’s expensive,” he said, noting that it can cost up to $10,000 to convert an oil boiler.
Peters said, however, that he does expect more switching of water heaters from electricity to propane, notably to on-demand, tankless water heaters. Downeast also offers a free propane promotion for new customers, he said, but makes its pitch through a sales force, rather than through advertising and the Internet.
“I don’t sense there’s any great push on the part of the industry to promote propane over Number 2 fuel,” he said.
That could change, according to Joe Rose, president of the Propane Gas Association of New England in Epsom, N.H.
Rose said his office has been working with home builders and remodelers to promote propane, and has doubled penetration in new construction. Now it plans to make a stronger case with heating contractors.
Dead River, he said, is among the most aggressive energy marketers in northern New England, but a handful of other oil dealers also are starting to make a stronger pitch for propane.
“What Dead River is doing is being modeled in every other state,” he said.
Staff writer Tux Turkel can be contacted at 791-6462 or [email protected]