New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

Oil Ban On the Way

Read this article in the digital edition.

New York struck a blow for clean air when officials declared that pollutant-heavy No. 6 heating oil would be banished from the city’s oil burners by July 2015. Four years sounds like plenty of time for boards to weigh their options for upgrading or replacing their boilers. But professionals and city officials are cautioning board members that 2015 is the end of the phase-out process, not the beginning.

“[Boards are] thinking July 1, 2015, is their date,” says Carl Borenstein, president of Veritas Management. “They might be in for a rude awakening as of July 1, 2012.”

After this date, the city Department of Environmental Protection (DEP) will stop issuing triennial certificates of operation for No. 6 oil burners. Any boiler up for inspection after that date would have to be replaced or converted in order to pass – meaning some boards could have as little as a year to have the necessary work done.

The Cost of Compliance

The new rules, enacted in April as part of Mayor Michael Bloomberg’s wide-ranging PlaNYC environmental initiative, require all boilers to run on cleaner-burning but more expensive No. 2 oil or natural gas by 2030. Heavier fuels were banned immediately in new boilers. Existing boilers burning No. 6 oil have the option of switching to No. 4 temporarily, but the city will stop issuing certificates for No. 4 oil burners in 2020.

DEP spokesman Farrell Sklerov says the two-phase regulation was designed to ease the transition for building owners. “The timeline was intentionally staggered to time the more costly conversion, to No. 2 oil, to 2030 in order to coincide with the replacement cycle of boilers,” he says. “The interim change requires minimum work that allows for important health benefits to be realized without an undue financial burden.”

To be sure, the vast majority of co-ops and condos will be unaffected by the new rule, because only one percent of the city’s buildings, or about 10,000, are still burning No. 4 or No. 6 oil, according to DEP.

Todd Wymbs, vice president and boiler salesman at Wymbs Inc. in the Bronx, says he’s heard no hue and cry from building owners about the need to upgrade their burners, and he thinks that’s in large part because it’s not as big a project as many feared.

Wymbs Inc. is the city’s only authorized dealer of Industrial combustion burners – by far the most prevalent brand – and Wymbs says that most of its thousands of oil burners operating in the five boroughs today will burn any oil or natural gas without modification.

The major difference between different grades of oil is viscosity. No. 6 oil is so sludgy that it requires preheating to burn properly. But for the burners Wymbs sells, he says, “viscosity is not an issue. You don’t have to do anything to that burner. All you have to do is turn the heater off.”

DEP estimates that converting a non-compliant burner to cleaner fuel or natural gas would cost a building $10,000. “That’s a fallacy,” Wymbs says. For buildings with an adaptable burner and all their equipment in good shape, the cost could very well be much less.

But engineer Neal Rudikoff, of New York Engineering Associates, warns that a lot of hidden costs could crop up in buildings with old or poorly maintained equipment. “It’s not as simple as just making all these changes in the equipment and the grade of oil,” he says.

Rudikoff says he’s seen the city step up its inspection regime for oil burners in recent years. In the past, he says, the city’s Department of Buildings (DOB) wouldn’t perform a detailed inspection when approving a change in oil grade. “It was more or less a self-certification process,” he says. “But now they send an inspector and inspect your entire oil delivery system – the piping, the fill box, the tank, the vent, the enclosure… They’re requiring that buildings bring a lot of items up to more current codes than they were installed at.”

Boards can bypass these potentially expensive changes by switching to natural gas and simply removing the oil system, but buildings are seeing similar vigilance from chimney inspectors in the past three years, Rudikoff says. He estimates that 25 percent of buildings in the city don’t have the required lining of terra cotta, metal, or firebrick in their chimneys, and some of those that do may be due for a replacement.

These changes may be costly, Rudikoff says, but they’re really for the best. “The purpose of all of this is safety,” he says – safety for occupants of the building, for firefighters in the case of flammable fumes or leakages, and for the general welfare of city residents. “It’s a green initiative, which is a good thing in the long run,” he says.

Weighing the Gas Alternative

There seems to be broad agreement among professionals that natural gas is emerging as the most attractive option for co-op and condo boards, for reasons ranging from the price of oil to regulatory trends. Con Edison offers some incentives to new natural gas customers, but there is also widespread concern that the utility will have trouble keeping up with demand.

Joseph McGowan, manager of gas customer solutions at Con Ed, says the utility can connect any property to a gas main, provided its owners make the necessary investments to receive it. Customers with interruptible gas, or “dual fuel,” setups are responsible for the entire cost of hooking into the main, but those who jettison oil entirely and opt for “firm gas” service are entitled to have at least the first 100 feet of pipe from the main to the property line installed for free.

“We look at estimated revenues to see if you meet some revenue criteria for Con Ed to cover more of it,” McGowan says. “We may be able to provide significantly more entitlements if needed.” He noted that customers may qualify for additional rebates or incentives.

One of the stated goals of the city’s fuel rules is to reduce emissions of nitrogen oxides, or “NOx,” a byproduct of oil and gasoline combustion that contributes to smog, ozone depletion, and acid rain. Wymbs says he expects the city to follow the lead of California and clamp down even further on NOx, rendering even No. 2 oil obsolete.

“A lot of owners are looking at what’s on the horizon for them in their buildings, and they are not waiting,” says Rudikoff.

McGowan says the utility has seen a definite uptick in interest in natural gas, which is only growing now that heavy oil is on its way out.

Borenstein says he is seeing a backlog in applications to connect to the utility’s natural gas system as it tries to process the large volume of requests. “It’s a hard sell right now,” he says.

McGowan says the utility is seeing increased volume – but not a backlog – and has organized a new department to handle conversions and educate potential customers on requirements and expectations for the process.

“We’ve been working with the city on developing a more strategic and streamlined process for dealing with all the gas conversion requests,” McGowan says. “If people’s experiences in the past were not as favorable, hopefully they will be feeling that there’s an enhanced process.”

McGowan also expressed confidence in the utility’s capacity to serve gas to all the customers who want it. The utility is constantly monitoring demand to make sure the gas is flowing where it’s needed, he says. Specific locations may have capacity issues, but the system as a whole should not.

“You should just assume that Con Edison has what you need,” he says.

Time for a Change

DEP and DOB in May touted their collaboration to streamline the boiler permitting process, creating a new procedure that eliminates redundant paperwork by creating a unified, simplified certification form that can be submitted to both departments. The city claimed in a press release that this reduction in red tape could save boards as much as $3,000 per boiler conversion.

But Borenstein, of Veritas Management, says the compliance process is still made needlessly complex by the lack of a clear timeline that all boards can follow. “I’m disgusted by the whole thing,” he says. “I think they should issue you a prorated certificate that would expire by July 1, 2015, so everyone coming into compliance would have that same date… It works for Local Law 11 – why can’t it work for everything else?”

Rudikoff says that as long as boards are on top of their inspection schedules, they shouldn’t have too much trouble getting the work done. “Everybody’s going to be really busy, but there’s enough contractors out there so that the competition will still be there for prices to remain reasonable,” he says.

DEP’s Sklerov says the agency is preparing a public awareness campaign to ensure that building owners know what they are required to do and when they must do it. The agency plans to send informational mailings and post updated information to its website. It will also make presentations to various groups that represent building owners.

For boards that do run into a problem meeting their deadlines for some reason, DEP will accept applications for extensions through the end of 2012. To be granted an extension, a board must enter into a compliance agreement with DEP committing to a schedule for completing the upgrade.

“Compliance agreements will be narrowly tailored paths to minimize any public health effects to residents,” says Sklerov, noting that DEP would take boards’ feasibility and financial hardship concerns into account but also weigh them against the public health consequences of delayed compliance.

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