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Heating oil consists of a mixture of petroleum-derived hydrocarbons in the 14- to 20-carbon atom range that condense between 250 and 350 °C (482 and 662 °F) during oil refining. Heating oil condenses at a lower temperature than petroleum jelly, bitumen, candle wax, and lubricating oil, but at a higher temperature than kerosene, which condenses between 160-250 °C (320-482 °F). The heavy (C20+) hydrocarbons condense between 340-400 °C (644-752 °F).
Most heating oil products are chemically very similar to diesel fuel used as motor fuel. In many markets heating oil and on-road diesel fuels are the same product sold out of the same truck in route labeled as either heating oil or dyed diesel respectively dependent on the person ordering product. The legal difference between diesel and heating oil in the United States is sulfur allowance. Diesel for machinery and equipment must be below 15ppm sulfur content while heating oil must be below 500 ppm sulfur. This means that the two can often be successfully interchanged for heating or boiler systems. However, the taxation of the two differs in many places, with heating oil being taxed less than motor fuel. This creates an incentive to buy heating oil at a lower price and then use it as motor fuel, avoiding the fuel tax. To make enforcement possible, some visual difference or odor difference must be introduced to the oil. Therefore, red dyes are usually added, resulting in the "red diesel" name in countries like the United Kingdom. In the U.S. the fuel oil dyed red is not taxed for highway use; the dye makes it easy to identify its use in on-road vehicles (whereas diesel fuel sold for motor fuel use is usually green). Since 2002, Solvent Yellow 124 has been added as a "Euromarker" in the European Union.
Heating oil is commonly delivered by tank truck to residential, commercial and municipal buildings and stored in above-ground storage tanks ("ASTs") located in the basements, garages, or outside adjacent to the building. It is sometimes stored in underground storage tanks (or "USTs") but less often than ASTs. ASTs are used for smaller installations due to the lower cost factor. Heating oil is less commonly used as an industrial fuel or for power generation.
Leaks from tanks and piping are an environmental concern. Various federal and state regulations are in place regarding the proper transportation, storage and burning of heating oil, which is classified as a hazardous material (HazMat) by federal regulators.
Heating oil is known in the United States as No. 2 heating oil. In the U.S., it must conform to ASTM standard D396. Diesel and kerosene, while often confused as being similar or identical, must conform to their own respective ASTM standards. Heating oil is widely used in both the United States and Canada. In the United States, biodiesel blends of B5 (5% biodiesel) and B20 (20% biodiesel) are available in most markets as a lower CO2 and cleaner burning heating fuel.
The Department of Energy tracks the prices homeowners pay for home heating fuel (oil and propane). There are also a number of websites that allow home owners to compare the price per gallon they are paying with the Department of Energy data as well as other consumers in their area. Likewise the US Energy Information Administration collects heating oil price statistics and maintains historical price data for all major US markets during each heating season. The US Department of Energy also supports research and development for heating oil technology through the National Oilheat Research Alliance. Additional information about biodiesel heating oil use can also be found at the National Biodiesel Board's site.
Heating oil is mostly used in the northeastern and northwestern urban United States and a strong market presence in rural areas as well. Most of the northeast's heating oil coming from Irving Oil's refinery in Saint John, New Brunswick, the largest oil refinery in Canada. Unlike other petroleum products, heating oil is primarily distributed to consumers through family-owned small businesses, rather than the large oil companies. Although United States distributors provide the Department of Energy the average price per gallon for their users, they typically do not list their prices on comparison websites, instead preferring to provide quotes which best match the property.
Heating oil is used for home heating in England, Scotland and Wales, typically in premises away from mains gas. There are around 1.5 million people in Great Britain using oil for home heating. Great Britain has many suppliers of heating oil ranging from large companies such as Conquest Oil Company and Crown Oil to local and independent heating oil suppliers such as J. R. Rix & Sons. Many villages may use buying groups to order heating oil at the same time, thereby accessing lower costs. Many heating oil suppliers will choose to list their prices on independent heating oil price comparison websites. These sites draw in home heating oil users and compare various local supplier prices in order to provide the lowest price available. In the UK and Northern Ireland, it is possible to search for prices by town name, county and postcode prefix.
The Department of Energy and Climate Change (DECC) have referred the UK oil market to the Office of Fair Trading (OFT) for review. The OFT has resolved to look at the structure of the market, with a view of the fairness for consumers and alternative energy options for off-grid consumers such as heat pumps.
Heating oil storage in the United Kingdom is governed by regulations which ensure the safe installation and usage of oil storage tanks. It is a criminal offence to keep a tank that violates these regulations, and the owners are liable for fines, penalties and any costs incurred as a result of cleaning up oil spills.
The regulations are designed to minimise the risk of damaging pollution and reduce the likelihood of oil being stored in hazardous environments, such as a building without proper fire safety measures. The regulations which govern oil storage tanks are The Control of Pollution (Oil Storage) England Regulations (2001),The Pollution Prevention Guidelines (PPG 2) and The Building Regulations (Approved Document J).
The Oil Storage Regulations (2001) apply to oil tanks used for commercial and industrial purposes, or domestic tanks over 3500 litres in capacity. They state that the storage tank should be of "sufficient strength and structural integrity to ensure that it is unlikely to burst or leak in its ordinary use". The tank, along with any filters, gauges, valves or ancillary equipment, must be contained within a secondary unit or bund which has at least 110% of the capacity of the inner tank. If the tank has a fill pipe that is not contained within the secondary unit, a drip tray must be installed. They also require the use of an automatic overfill prevention if it is not "reasonably practical" to monitor the oil levels within the tank.
The Building Regulations Approved Document J covers the legal requirements for the installation of the tanks within the premises of a building. The regulations state that any new tank larger than 2,500 litres must be stored within a bunded tank or secondary containment that is a minimum of 110% of the tank's capacity. If a tank is single skinned and smaller than 2,500 litres, it must be given an individual site pollution risk assessment. This highlights any pollution or hazard risks such as the possibility of the oil escaping and reaching a river or stream, or the risk of a collision if the storage tank is located near a road.
They further state that all tanks must be installed on a surface strong enough to support a full storage tank. The surface must be flat, even and fire-resistance, and should extend at least 300mm beyond the boundaries of the tank. A paving stone surface must be at least 42mm thick, and a concrete surface must be at least 100mm thick. The document also states that the tank should be situated at least 1800mm away from any potential hazards, such as doors, windows, appliance flue terminals, non-fire rated buildings such as garden fences, and at least 760mm from non-fire rated smaller structures such as wooden fences.
A safe, secure tank that complies with all regulations will look similar to the diagram above. It details the different parts of the tank that need to be checked in order to ensure the tank is legal, including where the ancillary equipment should be located and the presence of an automatic overfill prevention.
The degree day system is based on the amount of fuel a customer has consumed between two or more deliveries and the high and low outdoor temperatures during the same period. A degree day is defined as one degree of temperature below 65 °F in the average temperature of one day. In other words, to arrive at the number of degree days in one day, the official high and low temperatures for that day must be obtained. The two figures are then averaged, and the number of units this average is below 65 °F is the number of degree days for that day. For example, if for Tuesday, 3 November, the high temperature is 70 °F and the low is 54 °F, the average is found by adding 70 and 54, which equals 124, and then dividing by 2. The resultant figure is 62, and by subtracting 62 from 65, it is determined that there were three Fahrenheit degree days that day.
The K factor is the number of degree days in any given period divided by the number of gallons of fuel oil used in a given period. Multiplying K degree-days per gallon by the number of gallons of usable fuel remaining in a tank gives the number of degree-days before a delivery is needed.