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New York City Council Committee on Environmental Protection
Intro 194—The Use of Clean Heating Oil in New York City

May 28, 2010

Testimony of Caswell F. Holloway,
Commissioner, New York City Department of Environmental Protection (DEP)

Good morning, Chair Gennaro and members of the committee. I am Cas Holloway, Commissioner of the Department of Environmental Protection (DEP). Thank you for the opportunity to testify today on the use of clean heating oil in New York City, a PlaNYC commitment that Mayor Bloomberg reiterated in his 2010 State of the City address.  Intro 194 takes a significant step towards fulfilling that commitment.

The Administrative Code (24-102) states the public policy of the City is to preserve, protect, and improve our air resources, and that every person is entitled to air that is not detrimental to quality of life.  Under the City Charter, DEP has the authority to regulate and control the emission of harmful air pollutants into the open air.  As you have already heard from Deputy Commissioner Kass, air pollutants such as particulate matter, sulfur dioxide, and sulfur oxides are associated with negative health impacts, including decreased lung function, aggravated asthma, respiratory symptoms, and premature death.

Approximately 14% of local emissions of particulate matter results from the combustion of fuel used for heat and hot water. There are three ways to reduce this pollution: burn cleaner fuel, burn less fuel, and clean emissions caused by burning dirty fuel with scrubbers or other technology.  Our research and experience show that technologically, these "post-combustion" measures are not practical or affordable in residential or commercial buildings, and that it is far more cost-effective to remove pollutants from fuel before it is burned.  Intro 194 adopts this approach by capping the amount of sulfur in heating oil, and instituting an across-the-board requirement that all heating oil contain at least 2% biodiesel fuel, which contains no sulfur or heavy metals.  These requirements will result in substantial reductions in sulfur dioxide, particulate matter, and nitrogen oxide pollution.

New York City has a long history of taking decisive action to clean fuels and reduce local sources of pollution.  In November 1953, smog killed between 170 and 260 people in the City; 10 years later it killed 200; and in 1966 it killed 169.  A prior generation took decisive action to improve public health by banning the burning of bituminous, high sulfur coal; banning the use of residential incinerators; and capping the sulfur content of heating oil in the City in landmark local laws enacted in 1966 and 1971. Intro 194 continues the progression towards cleaner, sustainable fuel-burning requirements to protect the health of current and future New Yorkers.

In New York City, where we eliminated the burning of coal long ago, one of the most significant remaining sources of sulfur dioxide, particulate matter, and nitrogen oxide comes from the burning of No.4 and No.6 fuel oils. These fuels have the highest sulfur content of all fuels commonly used for heating. As you heard in greater detail from Deputy Commissioner Kass, sulfur dioxide, particulate matter, and nitrogen oxides can exacerbate asthma, and may contribute to other forms of respiratory and cardiovascular illness. Heavier residual fuel oils also contain larger amounts of impurities such as nickel, vanadium, and other metals.  As a result, burning No. 6 fuel oil releases fine particulate matter with higher levels of nickel than either No. 2 oil or natural gas.  No. 4 fuel oil is a mix of No. 6 residual oil and cleaner-burning No. 2 oil, and also emits significant amounts of nickel.
That boilers using No. 6 and No. 4 oil pollute more than the other fuels is readily observable by the general public. These boilers are commonly the subject of 311 complaints about the emission of smoke from a building chimney that is caused by incomplete combustion. That is because boilers using heavier grades of oil are more difficult to operate and properly maintain.  In Fiscal Year 2009, there were approximately 2,200 complaints, which resulted in the issuance of approximately 500 violations.
Intro 194 has two principal components.  First, it caps the allowable sulfur content in No. 4 fuel oil at 2,000 parts per million (ppm) of sulfur, or the equivalent of No. 2 fuel oil. The lowering of sulfur caps in No. 4 and No. 6 is important because most pollution from the building heating sector comes from the combustion of those grades of oil.  Of the city's million buildings, less than 10,000 use No. 4 or No. 6 heating oil, while the rest use cleaner No. 2 oil or natural gas. In fact, New York City is one of the few places in the United States where No. 6 or No. 4 oil is still used as a heating fuel.
Intro 194 is part of a strategy that the Mayor's Office of Long-Term Planning and Sustainability (OLTPS) and DEP have been working on to reduce the use of residual heating oil in an aggressive, but affordable and financially responsible way, over the next several decades. Our analysis shows that the use of low sulfur No. 4 oil would require few if any capital upgrades to existing No. 4 or No. 6 boilers, and a very low increase in operating costs, even if the requirement was put in place immediately.  In most cases, boilers would need to be tuned at a cost of $10,000 or less.

DEP issues permits for boilers over a certain size, generally greater than the units used in one- or two-family homes and smaller than those used in power plants (which is regulated by the State under Title V of the federal Clean Air Act).  DEP regulates the heating units in all multi-family and commercially buildings in the city by issuing permits for new units and re-issuing those permits every three years. There are currently 66,893 DEP permits for combustion devices/boilers, of which (as I mentioned) only approximately 10,000 use No. 4 and/or No. 6 fuel oil. Of those, 6,211 use No. 6 oil and 3,865 use No. 4 oil. There are 799 dual fuel boilers, which burn natural gas and residual oil; 425 of those use natural gas and No. 6 oil and 374 use No.4 oil and natural gas. The remaining 48,341 registrations burn No. 2 or natural gas and there are 5,210 certificates of operation for No. 2 and 1,699 certificates of operation for natural gas.

In connection with Intro 194, DEP is considering a rule that would require that all equipment that currently burns No. 4 or No. 6 fuel oil would have to use low sulfur No. 4 fuel oil upon permit renewal. This would effectively require the conversion of all No. 4 and No. 6 boilers that we regulate to low sulfur No. 4 over the three-year cycle ending in 2015. At that point, the most polluting fuel – No. 6 oil – would no longer be used in New York City.

A shift from No. 4 and No. 6 oil to low sulfur No. 4 fuel oil would result in dramatically lower emissions of conventional pollutants. The projected minimum annual reduction in pollutants from the existing residual oil boilers will be 274 tons of particulate matter, 228 tons of fine particulates, 2,231 tons of nitrogen oxides,  3,698 tons of sulfur dioxide, and 76,778 tons of carbon dioxide. This is equivalent particulate matter 2.5 reduction of eliminating approximately 1.5 billion to 3.3 billion miles of heavy-duty truck traffic from New York City roads every year.

Moreover, we expect the use of low-sulfur No. 4 oil to reduce nickel emissions by completely displacing No. 6 oil, which contains higher levels of that pollutant, and by containing proportionally more No. 2 oil than former No. 4 blends. Finally, the use of low sulfur No. 4 instead of high sulfur No. 4 or No. 6 oil should substantially reduce 311 complaints about smoking boilers and the high maintenance costs for aging boilers that are inefficient to operate.

We have heard concerns about whether there will be enough low sulfur No. 4 oil to meet the demand, but we believe this concern is overstated. Producing enough low sulfur No. 4 oil to meet the increased demand will not be difficult. Existing No. 4 fuel oil is made by blending No. 6 and No. 2 oil to New York City's current sulfur specifications. Our market research shows that low sulfur No. 4 can be easily made by blending No. 6 oil with ultra-low sulfur No. 2 oil, which has a sulfur content of less than 15 ppm.  I note that the 1966 and 1971 sulfur cap legislation also met opposition from those who feared market disruptions from a "boutique fuel" that would apply only in New York City.  Our experience over the past forty years demonstrates that if the City shows leadership, the oil and real estate industries will adjust by producing and using fuel that meets New York City standards.

Intro 194 also requires that all grades of oil used in the City contain two percent biodiesel. In addition to the substantial air-quality benefits of this bill, the biodiesel requirement will also benefit our sewer infrastructure and improve water quality in New York Harbor.

A major source of oil needed to create biodiesel fuel is the yellow grease created by many of the City's more than 20,000 restaurants.  Improper disposal of waste grease is a major cause of sewer back-ups.  Restaurants are supposed to use grease traps to capture grease and dispose of it with their other refuse, but too many don't follow the rules. DEP received over 31,000 sewer back-up complaints in FY 2009, and the U.S. Environmental Protection Agency estimates that nationwide, fats, oil and grease are responsible for over 45% of sewer obstructions.  As I'm sure the members of this committee know well, sewer back-ups can cause flooding, unsanitary conditions and property damage; and at our wastewater treatment plants grease must also be separated out and disposed of through the treatment process.

Restaurants and commercial food preparation establishments are the main producers of waste vegetable oil, or yellow grease. About one-half of the 22,600 restaurants in the City have their yellow grease picked up by a licensed hauler. DEP is now working with other agencies, industry and community stakeholders to develop an approach to increase the proper disposal of yellow grease. The biodiesel requirement in Intro 194 will greatly aid in this effort, because it will increase the demand for yellow grease, which we believe will accelerate existing waste-to-biodiesel recycling and help reduce the amount of grease being illegally dumped into our sewers.

As you heard from Deputy Commissioner Dan Kass of the New York City Department of Health and Mental Hygiene, the combustion of residual heating fuel oil has significant negative impacts on public health. I urge the Committee and the Council to pass this bill, and to continue the steady progress that the City has made toward cleaner, sustainable energy sources in our growing City.  This concludes my prepared statement.  Thank you for the opportunity to testify, and I am happy to answer any questions you may have.

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