David Heath is planning for more tankers and double digit growth at Clugston Distribution in 2014 Following a 20% growth in revenue in 2013, a £2.15m fleet expansion and renewal plan has been announced by Clugston Distribution. The investment is part of the company’s strategy to develop its UK customer base by growing services in the fuels, bulk powdered food, intermodal and bulk ash movement markets. Funds are being used to purchase eighteen new Euro6 Renault tractor units and fourteen new trailers, demonstrating the Clugston Group’s commitment to the logistics side of the business. The first two Euro6 Renaults hit the road last month delivering flour and other bulk food products. Three of the vehicles have been earmarked for the fuels fleet, taking it up to 16 vehicles on the Humber and Tees. Clugston Distribution is also looking to employ up to thirteen new employees to support predicted growth. Already on order, the new tractor units will be split 50/50 between fleet replacement and additional fleet capacity. The nine additional vehicles are being split across different areas of the business. David Heath, head of logistics, said: “We’re delighted that the Clugston board has chosen to support us further by backing our ambitious growth plans. 2013 was a great year for us and we’re looking forward to continuing our success in 2014 and beyond. We’re forecasting double digit revenue growth again in 2014.”www.clugstondistribution.co.uk

Just a quick reminder to anyone planning to attend FPS EXPO, Mabanaft will be holding a ‘Guess the price on MabaLIVE’ competition at the show. The person to guess the correct, or closest to the correct, ex-rack price* for kerosene at Grays on MabaLIVE at 16.00 on Thursday 10th April will win a fabulous Garnet Red Samsung Galaxy Tab 3, 7.0. The runner up will win £30 worth of John Lewis vouchers. To take part in the competition visit the Mabanaft stand (B48/49) where live fuel prices will be displayed on MabaLIVE. A member of the team will take your entry and give you a free gift for taking part. The competition closes at 2.00pm on Thursday 10th of April. The winners will be announced and prizes awarded at 4.00pm followed by a champagne toast. For more information about MabaLIVE please call our marketing team on 0207 802 3300, email sales@mabanaft.co.uk or visit www.mabalive.co.uk. * 30 day payment term ex-rack price for Kerosene at Grays. Terms and conditions apply.  

With energy prices becoming a major point of political debate in 2013, below Dr Craig Lowrey, consultant at UX Energy Services looks back over a year that has brought energy’s impact on the cost of living very sharply into focus Economic and geopolitical factors have interacted with supply and demand issues in the global oil market generating the movement and volatility which is generally seen as synonymous with oil. The future of Iran’s nuclear programme with the possibility of sanctions easing, civil unrest in Libya affecting its crude exports, and the pace of global economic growth have all served to provide sentiment and direction. For the most part, the price of crude oil has remained persistently above $100 per barrel – falling briefly below this important psychological benchmark in April 2013 after disappointing economic news from the US and China, as well as concerns over Europe’s financial stability, given developments in Cyprus. The UK Continental Shelf continues to be a key contributor to both the nation’s supply-demand balance and also the economy. There were some particularly positive supply developments with the start up of production at the Jasmine and Breagh fields; the former being the largest field to commence commercial operation in the North Sea since Buzzard six years ago. (Disappointingly, the Breagh field ceased operation only a few weeks after it came online, with developers citing technical problems and Buzzard experienced production problems for the second year in a row.) THE UK DEPENDS ON IMPORTS FOR 44% OF ITS HEATING OIL REQUIREMENTS The industrial dispute at the Grangemouth facility illustrated the potential vulnerability of the UK market to disruptions, coming as it did in the wake of a report from the House of Commons Energy and Climate Change Select Committee warning that domestic production could not keep up with rising demand for refined oil products. Indeed, the same report pointed out that the UK depends on imports for 44% of its heating oil requirements. A fact that vividly illustrates the key role that imports and international factors play in determining domestic prices. An affordable and secure supply When a fuel customer’s primary concern is an affordable and secure supply, the aforementioned global developments may seem literally and figuratively half a world away. So how do these international issues translate into domestic matters? And, how does the growing criticism of gas and electricity suppliers, and the possibility of changing policies, relate to off-grid energy sources such as heating oil? As the Big Six started to announce the latest round of domestic gas and electricity tariffs, the Labour Party declared a 20-month freeze on energy bills from May 2015 – should it win the next general election. Throughout the ensuing debate, very little mention was made of other fuels such as heating oil. The possibility of a heating oil price freeze Citing international factors, gas and electricity suppliers plus a number of independent commentators have questioned whether such a prize freeze policy is practical. Could such a freeze work in the heating oil market? At first glance the answer would appear to be no – given the market’s highly regionalised nature and the fact that international oil prices ultimately dictate price. Despite this, there could be options for something akin to a price freeze. According to the 2011 Office of Fair Trading report into the off-grid energy market, over 90% of the fluctuation in the price of heating oil is based upon the price of crude oil; any policy would therefore have to focus on this. One possible approach would be a measure similar to the Fair Fuel Stabiliser that operates in the petrol market. While this is based upon amendments to the prevailing rate of duty to compensate for variations in the crude oil price, a similar pricing approach could in theory be employed to insulate the rates paid by customers from international oil market volatility. Were such a policy to be implemented, fiscal and legislative implications would have to be carefully considered alongside the sharp differences in structure between the heating oil market and its gas and electricity counterparts, not to mention issues relating to changes in foreign currency exchange rates and other variables. Given regional variations in price and the site specific nature of delivery charges and volumes, the enforcement of such a policy would represent a major challenge and could ultimately preclude its introduction. Not all heating oil retailers are of a size and scale that would allow them to manage any additional regulatory or compliance obligations in a cost effective manner. A greater focus on off-grid customers With energy prices receiving an increasing amount of media coverage, it is important to ensure that off-grid fuel customers are seen as being of no less importance in terms of policy and bills. Given that off-grid energy is often more expensive there is an argument that they should receive a greater focus. Whether this is borne out by political developments in 2014 and the run-up to the 2015 general election remains to be seen.

Paul Vian – ambitious plans for Certas Energy In November 1999, I interviewed my very first fuel distributor at Carlton Fuels which had just been listed among the north-west’s top businesses. Asked for the secret of his success, owner Frank Hunter said the company’s strength came from its people, citing his 28-year old sales manager, Paul Vian for special mention. Fourteen years later and now managing director at Certas Energy, Paul Vian was in the interview chairFrom GB Oils to Certas Energy Why the change of name? “It was more than a change of name; it was a culmination of a number of developments within the business in the last 12 months – a restructured sales & operations function (including the introduction of logistics services) and renewed investment both in our people and also our infrastructure. However, the main driver was ensuring consistency – for customers and colleagues. As a business built on acquisition, we had any number of different ways of doing things. So, this two-year project re-established who we were, what we do, and most importantly how we did it.” Paul explained. “The name Certas in itself is significant as it translates to ‘Certainty’ which is at the heart of the business; we are committed to providing assurance and certainty of supply to our customers. The Certas brand not only reflects the size and strength of the business but also the great team that sits behind it. Along with the name and identity, we created the Certas Energy Way of Working where we shared our company mission, giving us a common goal, and a shared set of values. Externally, Certas Energy positions us as a leading market force in the distribution sector, and gives us the scope to achieve our growth ambitions, both organically and through acquisition, the latter of which we are constantly reviewing to see where there is opportunity for acquisition expansion. Certas Energy branded tankers are now being spotted out on the road. “We wanted to get the name known as quickly as possible,” said Paul. “Since the vehicles have been on the road, the name is gaining momentum.” The company operates 1,000 vehicles; starting next summer we will ramp up the pace of converting our vehicles to the Certas Energy branded ones. WE’LL LOOK AT ANY OPPORTUNITY THAT PRESENTS ITSELF IN ANY BUSINESS SECTOR There are 45 brand names operating under the Certas Energy umbrella. Although there is an aspiration to operate under the one name, Paul appreciates that existing brands cannot be changed overnight. “A collective name is an ambition but we’re not sure that we can get there just yet… “At the start of the brand project, we conducted one of the largest pieces of customer research in the industry. It was essential we listened to our customers. In the domestic market our customers have developed strong relationships with a particular brand over many years. We now have a great understanding of the different factors customers are looking for when dealing with us so we need to operate with sensitivity for the foreseeable future; retaining customers will still require a multi-brand strategy. “However, no matter which brand, customers know who they’re dealing with in terms of the parent brand; we are completely transparent.” GB Oils did receive some adverse media coverage in the winter of 2010/11, what action has the company taken to remedy this? “We’ve taken a much more proactive approach to our corporate social responsibility,” said Paul. “We regularly offer bursary schemes across the country providing donations and funds to a host of local charities and community initiatives. “This winter Certas Energy is the official corporate partner of Independent Age (IA), a charity which works with and for older people throughout the UK and Ireland. And we are working with them to help us better identify and support elderly customers.” “We’re also big supporters of the new Code of Practice recently launched by the FPS, and as market leaders we’re very happy to drive this through our business. “Across all our brands every customer knows the price of a delivery before it’s delivered. Underlying oil prices may change daily but our consumer pricing policy ensures the quoted price is the one the customer pays thus giving them the ability to make an informed decision. With the more financially vulnerable, we encourage budgeting by paying over a period of time via direct debit and ordering early.” “The business is an active supporter of the Buy Oil Early campaign run by the Action with Communities in Rural England, Citizens Advice Bureau, Consumer Focus, and FPS. “Additional drivers and telesales staff have ensured that we’re much better geared up for the winter period when the number of calls and deliveries can more than double. In times of peak demand, third party logistics cover may also be used to ensure a good level of customer service. “We like to think we are leaders now in terms of customer service and transparency,” added Paul.

Brian Worrall,DODF chair with Marisa Ferguson,SQA, at the signing of the agreement The scheme opened for driver applications on 1st January 2014 and Brian is encouraging businesses to apply as soon as possible: “It’s a bit like the Driver CPC in that sense –there’s not as much time to do it as you may think.” TERMINALS ACROSS THE UK HAVE FULLY COMMITTED TO THE SCHEME Although the PDP is not currently a legal requirement, unlike the ADR scheme, terminals will have the right to mandate it from 1st January 2015. “Terminals across the UK have fully committed to the scheme and are in the process of advising customers that they will be mandating it from the start of next year, giving them 12 months to get sorted. Any UK based drivers failing to get a PDP by this date will not be admitted to the terminal,” explained Brian. Companies have been able to register as a training centre since September 2013. With around 30 signed up by the end of 2013, Brian urged smaller distributors to do the same, pointing out that distributors are able to register to undertake classroom and/or the practical training for themselves: “This could be a real opportunity for smaller distributors to save money as it is relatively low cost doing it this way, especially for the practical part of PDP – it makes perfect sense. Put another way most petroleum carriers are training their drivers anyway and the PDP provides a nationally recognised standard to which the employer can align their training. Also this will now make it easier to register the existing training as a DCPC module.”Making it easier Aware that the PDP is an additional training requirement, Brian was keen to stress that for most operators, already working to high standards, it will not require a lot of extra work. “By aligning the scheme to the existing ADR and existing operational training it will be possible for drivers to take one of two easy routes. They can either request the additional PDP module when their ADR is up for renewal or take a shorter, interim version covering the key points, which will last until their ADR expires.” Additionally by using the Scottish Qualifications Authority (SQA) to manage the scheme, administration is streamlined. Not only will the driver number be the same for both schemes, but the photo can also be re-used. In order to gain accreditation drivers must complete both a classroom and a practical element. The classroom assessment element can be done on paper or online, which is quicker, and can be delivered in house or by a third party. For the practical side, drivers will need access to a terminal and will be assessed by an SQA accredited and registered individual. “Even in smaller companies, a more experienced driver could take on the role of an assessor,” said Brian. “Although industry experience is required, formal training is not.” The Federation of Petroleum Suppliers (FPS) is also working on providing training modules for its members to use.The benefits “Distributors will certainly see the benefits of the scheme and in time it will become part of the way they operate,” said Brian. “Designed by the industry for the industry, the scheme will deliver a consistently high level of training to all drivers in the industry, verified by an accredited third party. The scheme is also open to evolving over time. We are in complete control of the syllabus, which is online alongside the necessary documentation and fee structure.” Brian also believes that the scheme will deliver reputational benefits for both drivers and companies. “Very much like Gas Safe and OFTEC – we hope that drivers will see it as a badge of honour and professionalism. The intention is to market and promote it more in this way over time. “As well as being relatively low cost, as the scheme grows it should really enhance the Driver CPC too – combining content and improving delivery of the scheme. “So far, uptake of the PDP has been good with all the major hauliers and distributors signing up.” www.pdpassport.com

Kabraul and Mike Tasha – diversity of markets ensures that Loud Fuel stays busy all year round From putting down small roots in 1974 by making deliveries with a single truck, founder Mike Tasha bought the Loud Fuel Company in 1994 and son, Kabraul moved to Falmouth, Massachusetts to manage the business. Today the company has 150 employees and boasts a 15,000 strong customer base in and around the Cape Cod area where it supplies heating oil, gasoline, diesel, biofuel, lube oil and propane. Although the domestic market is the main area of business, the company also services both the marine and commercial sectors; for Kabraul it is this diversity that he enjoys most. “I can supply completely different industries each day of the week. As well as houses, we supply power plants, research ships, fishing vessels, construction companies and marinas. We also move biofuel from railyards to fuel terminals.” The company’s diversity also ensures that it stays busy all year round and that it is not seasonally affected. DON’T ASK ANYTHING OF YOUR EMPLOYEES THAT YOU WOULDN’T DO YOURSELFTaking a hands on approach Working alongside his father, Kabraul believes he has learned the secret to his success: “My father and I are hands on in the daily operations and involved in every aspect of the business. We drive the trucks as well as dispatch them, we’re involved in the repairs, we deal with the customers ourselves as well as our employees. “Coming into this business I’ve learnt two key things from my father – if you want something doing right you do it yourself and you don’t ask anything of your employees that you wouldn’t do yourself. Hands down and hands on is the key to our success. There are oil companies on every corner and it’s our dedication to our customers that makes us stand out from the rest.”The biggest issues Like most UK distributors, Kabraul believes that the biggest issue affecting the US distribution market is the rising cost of fuel. The increasing cost of equipment, wages and health insurance are also major bugbears for the company. Drawing fuel from Inland Fuel in Tiverton, Rhode Island and Citgo Petroleum in Braintree, the company often experiences problems with supply. “Citgo Petroleum runs short – as well as out – many times throughout the year. They’re also very strict on weekly and monthly allocations. However, we’ve yet to have any issues with Inland Fuel.” Looking ahead Kabraul told Fuel Oil News: “Our future plan is to keep doing what we’re doing and growing this business. There’s a lot of opportunity for growth in this market and we plan to take advantage of it.”

As many fuel oil distributors and their customers have struggled in the winter floods, others have taken advantage of the situation. Nolan Oils alerted Fuel Oils News to an incident in Aylesbury where three men were arrested, with two charged after two suspicious vehicles were reported to have been seen on a driveway of a farm. Police stopped and searched a vehicle and found what was believed to be diesel siphoning equipment and six 25 litre drums. For news from other distributors see the March issue of Fuel Oil News. In Northern Ireland, over 50 tonnes of toxic waste was removed after three fuel laundering plants were found by HM Revenue and Customs in the Cullaville area of South Armagh. The plants were operating at two domestic premises and in an agricultural shed with the potential to produce 26 million litres of illicit fuel a year, evading £18 million in revenue. Pat Curtis, national oils coordinator, HMRC, said: “It is wrong that honest businesses should be undercut by criminals and those involved in making or selling laundered fuel. Buying illicit fuel not only funds crime, it supports and encourages these dangerous activities within our communities. If anyone has information about fuel fraud we would encourage them to contact the Customs Hotline on 0800 59 5000.” Follow HMRC on Twitter at @hmrcgovuk and see the Flickr channel at www.flickr.com/hmrcgovuk  

Oil plays a very important role in our everyday lives – Certas Energy spreads the word with an educational programme in the areas in which it operates Certas Energy has produced an educational programme to teach children about the role oil plays in everyday lives. Working in collaboration with education provider Mad Science, scientific content to fit directly with the school curriculum was devised, creating a one hour educational workshop which has toured UK schools over the last two months. The workshop showed pupils how oil is made and looked at its importance in the local area. “This public education initiative forms part of our corporate social responsibility strategy to reach our domestic customers,” said Emma Wordsworth, Certas Energy’s director of HR. “We have a large presence in the areas visited by these workshops, providing energy to homes and employing local people. “We worked closely with local schools to ensure these workshops benefited children, their families and the wider community.” www.certasenergy.co.uk

This Port of Blyth site will soon have three new marine fuel storage tanks Having constructed concrete bases for three new marine fuel storage tanks at the Bates Terminal at the Port of Blyth, infrastructure work including bund walls and access roads, is now underway. “The Port of Blyth is a growing offshore energy hub with excellent deep water facilities in a strategically well-positioned location,” said managing director, Barry Newton. “We’re delighted that the construction of the fuel tanks themselves is now underway.” Marine fuel supplier The Geos Group is developing the new fuel storage facility where each tank will have a capacity of 5 million litres. A specialist supplier of marine gas oil providing storage, supply, trading and logistics, Geos has terminals at Lerwick, Aberdeen, Peterhead, Heysham and the Thames. Bunkering teams in these locations operate 24 hours a day, 365 days a year. Fuel is sourced ex-refinery and transported to terminals using the company’s dedicated tanker. With dedicated transport and storage on the Thames, the company offers supply to ports all around the south and southeast of England. Physical stock is also available for customers to collect ex-rack, using their own vehicles.www.geosgroup.com

(l-r) Ian Bainbridge, Janet Street Porter, Adam Warren, Antony Warren, and Jayne Winter, RDPE Area Manager (North East) at the Emerald Biogas AD facility in Newton Aycliffe The north east’s first commercial food waste anaerobic digestion (AD) plant opened in County Durham with the writer and broadcaster as host. Working with the private and public sector Emerald Biogas is recycling and reusing the region’s food waste to generate electricity, heat and bio-fertilisers at its £8 million facility. Formed in 2009, Emerald Biogas is owned by three partners Antony and Adam Warren of John Warren ABP and Ian Bainbridge of Agricore. Funding for the project was made available through the Rural Development Programme for England, which is jointly funded by Defra and the European Union. The biogas produced is burned using Combined Heat and Power (CHP) technology to produce 1.56 MW per hour or enough energy to power 2,000 homes. Waste is collected from schools, food manufacturing companies, retailers and leisure outlets. The north east generates over 800,000 tonnes of food waste every year, with over 80,000 tonnes of generated by schools. To tackle the growing problem of food waste, Emerald Biogas has taken its Waste Warriors: Food for Thought campaign into at schools. “Food waste to landfill is a growing concern, with over 80 kilograms thrown away in a primary school each week,” said director Adam Warren. “Through our initiative, pupils have the opportunity to understand the problem of food waste and our innovative green energy solution. We collect the schools’ food waste to process, pupils then visit the plant to experience the food waste-processing journey in action.” www.emeraldbiogas.com

The Energy Institute (EI) has been working to improve the test methods for predicting winter performance of diesel fuels – especially those containing significant amounts of biodiesel. One particularly important winter performance parameter is the cold soak filter blocking tendency of the fuel. The existing EI test method is IP PM-EA/08, Determination of filter blocking tendency of fatty acid methyl esters – cold soak and filtration method’. The test method comprises of a sample pre-treatment step which involves warming the sample to 60°C (in order to remove its thermal history) before the cold soak. During the cold soak the sample is chilled to 5°C and held at this temperature for 16 hours. After the cold soak the filter blocking tendency is determined using IP 387 Procedure B. The cold soak filterability test was further developed after a joint workshop between the EI and European Committee for Standardization (CEN) Working Group 31. Recent work by WG31 has targeted sources of variability in the procedure and a draft CEN method has been developed. The EI has now incorporated all of the recent developments and enhancements into an updated proposed method – IP PM-EA/13. Significant enhancements to the method include changes to the sample preparation step and cold soak apparatus and the introduction of a verification standard. This winter IP PM-EA/13 is being used by the fuels supply industry and other interested parties to feedback performance and user experiences to ensure the method is robust and fit for purpose. This will enable WG31 to further optimise the draft CEN test method. A precision study could then take place in 2014. www.energyinstitute.org    

To help raise awareness of the 20% of UK households living in fuel poverty and the need to make the country’s homes more energy efficient, OFTEC backed this month’s Cold Homes Week. Launched by the Energy Bill Revolution (EBR), Cold Homes Week brought together more than 170 businesses, charities and organisations in support of ending fuel poverty. Along with other EBR supporters, OFTEC staff and technicians took part in The Big Tweet sending out tweets using the hashtag #ColdHomesWeek. Local MPs were also urged to back the campaign to help bring down excess winter deaths, many attributed to rising fuel costs, which topped 31,000 in England and Wales last year. OFTEC attended a parliamentary reception where knitted scarves, the symbol of the campaign, were presented to MPs to highlight the fuel poverty issue. EBR is urging the government to use the money it gets from carbon taxes to help make UK homes super-energy efficient, installing measures such as better insulation and modern boilers to drive down energy bills, keep homes warm and cut carbon emissions. Director general, Jeremy Hawksley said: “With projections showing that the number of UK homes in fuel poverty is set to rise to one in three households by 2016, this is an issue which urgently needs addressing. “Our Oilsave website contains lots of useful tips on becoming more energy efficient and OFTEC registered technicians can always provide well professional advice to homeowners. We also teamed up with Age UK to produce a booklet for older people, who are most at risk, to help them keep warm and well during the winter.” Download the Age UK leaflet at www.oftec.org/consumers/keeping-warm-saving-money. With many thousands of standard efficiency boilers in need of upgrade, OFTEC has written to the government calling for the introduction of a simple oil boiler scrappage scheme, similar to the one running successfully in Northern Ireland where over 7,770 subsidised oil boilers have already been installed. Jeremy Hawksley concluded: “The government should be making it as easy and affordable as possible for homeowners to install modern condensing boilers which can save the average household up to 20% on fuel bills as well as cutting their carbon emissions. A simple move like this could go a long way towards bringing down fuel bills and reducing the number of people in the UK living in fuel poverty.” www.oilsave.org.uk      

The HID policy team at the Health and Safety Executive has announced that the Heavy Fuel Oil (Amendment) Regulations 2014 have been made and laid. The regulations, which can be viewed at www.legislation.gov.uk/id/uksi/2014/162 came into force on Thursday 20th February 2014. These regulations amend the Control of Major Accident Hazards Regulations 1999 (COMAH), which apply across Great Britain. They also amend relevant planning law in England, in relation to which they also include transitional arrangements. The Scottish and Welsh governments are addressing planning considerations within their own planning regimes. The COMAH Competent Authority has published guidance on heavy fuel oil – www.hse.gov.uk/comah/guidance/hfo-guidance.htm  

With ‘exciting plans to grow capacity and the potential to create more jobs’, Pace Fuelcare’s Kings Lynn depot is officially opened When Pace Fuelcare opened a brand new facility In Kings Lynn, more than 40 staff and guests, including the town’s major and the MP for North West Norfolk, were present to declare it open for business. Over £1.5 million was invested in the depot’s upgrade and modernisation, enabling it to play a key role as an operational hub to better serve Pace Fuelcare’s commercial, agricultural and domestic customers across East Anglia. General manager Simon Willis said: “We were delighted to welcome our local MP, Henry Bellingham, to our grand unveiling. The new site has state of the art storage facilities which are at the forefront of health & safety standards; this has increased the amount of product we can store and our capability to deliver to our customers as promptly as possible. We remain committed to our local area, both as a fuel supplier and a loyal supporter of community groups.” Henry Bellingham, MP for North West Norfolk, said “Pace Fuelcare is a highly respected company and has an excellent record, particularly delivering for rural communities. The depot already employs 22 members of staff, and has exciting plans to grow capacity with the potential to create more jobs.”www.pacefuelcare.co.uk

Jeremy Hawksley speaking about Oilsave and the fight for oil heating at the Fuel Oil News Distributor Debate earlier this month. See the March issue of Fuel Oil News for more details. The price difference between oil and gas has narrowed significantly. Three years ago oil was nearly 60% more expensive than mains gas but now it is just over 12% more expensive, based on using a condensing boiler. According to the latest quarterly data from the Sutherland Tables, the current annual cost of using oil to heat a three bedroom home is now 5% lower than the average cost reported over the last three years, whereas the same average figures for homes using gas and electricity show an increase in heating costs of 14% and 16.5% respectively.the price of oil has decreased by 2.18%. Directly comparing the price of heating a three bedroom home in January 2011 to January 2014 provides an even starker result and shows that electricity has seen the greatest price increase over the last three years at 38.89%. Similarly, gas prices have increased by 37.3% and solid fuels by 26.1% respectively, whereas in comparison, the price of oil has decreased by 2.18%. The substantial increase in electricity prices (38.89%) is especially notable as it means that renewable technologies such as air source (ASHP) and ground source (GSHP) heat pumps which run on electricity are becoming a much more expensive option to heat a typical home in Britain. LPG, used by some 170,000 off-grid households, remains the most expensive fuel, costing a three bedroom home with a condensing boiler £1,923 per annum compared to oil at £1,275 and gas at £1,136. “This is very welcome news,” said Jeremy Hawksley, director general of OFTEC. “This data confirms that the estimated one million households that use oil to heat their homes have benefited from relatively consistent heating costs over the past three years and are currently experiencing a small decrease in prices. “With the global oil markets stabilising and the supply of oil improving, we expect prices between heating oil and gas to continue to narrow – however, only time will tell on this. “Oil users also have the advantage of choosing when to buy their oil, such as during summer months when prices are often lower, as well as purchasing through oil buying syndicates to secure more competitive prices. The figures also show that a modern condensing boiler can reduce annual running costs by an average of £284.”

The 13th Tank Storage Association (TSA) conference and exhibition took place at Coventry’s Ricoh Arena in September. A well attended event, registration topped 400 and exhibitor numbers doubled to over 60. Focusing on HSE compliance and process safety management, the morning conference was chaired by Peter MacKay, managing editor and publisher of Hazardous Cargo Bulletin. The concensus among the first five speakers was that whilst the industry has come a long way, there is further to go.

“From an economic perspective, Immingham is a very important hub in the UK’s infrastructure,” says Keith L Jackson, director of Immingham Storage Company, part of Simon Storage. In addition to being home to Simon’s Immingham East and West terminals, the Humber Estuary has two refineries which together supply over 20% of the UK’s refined product – Total’s Lindsey and Phillips 66 Humber, the latter specialising in petroleum coke for export. The Associated British Ports’ (ABP) Immingham Dock & Grimsby Ports receive between 55-60m tonnes of cargo a year, of which approximately 22m tonnes are oil products. Immingham Storage handles large quantities of oil products, including many niche and specialised refined products. Fuels represent around 40% of the Simon business; a licence to store crude oil was surrendered in 2007 but recent enquiries may change this position. The two Immingham terminals operate via two deep water jetties with 6 berths owned by ABP; each can accommodate ships up to 50,000 DWT. Approximately 50 ships a month call at the West terminal to deliver or collect products, with 25 ships a month using the East terminal. Together, Immingham East and West comprise the UK’s largest terminal of its type, handling up to 1.5m tonnes of product a year with over 600,000m3 of storage. Growth in the East terminal, managed by Andrew Rhodes, has largely been both by organic development and by acquisition; an ex liquid sulphur terminal, the most recent purchase, was acquired three years ago. The terminal, with up to 14” import/export lines and easy-to-convert tanks, offers significant flexibility as recently witnessed by the conversion of some capacity to gasoline standard post Buncefield with Safety Instrumented Systems. The facility can offer food grade product storage, as well as pressurised chemical gases. Installed 18 months ago, the East has a holding tank for effluent which then feeds into a bioreactor tank for treatment before being discharged into the Humber under an environmental permit. The West terminal, which has a similar system in place, can additionally recover up to 250 tonnes of water per day for reuse in other applications. Fuel Oil News editor, Jane Hughes was invited to take a tour of Immingham Storage to see the operations first hand. Managing a capital intensive business Established in 1929, creosote was the first product stored by Immingham Storage at the West terminal before being exported to the USA. Like much of the UK’s terminal infrastructure, both terminals were largely developed in the mid-1950s. Texaco and Esso (sea fed from Fawley) had terminals in the area – both acquired by Simon as part of the development of what was to become the East terminal. It takes a 100-strong team, working 5 shifts daily round the clock 365 days a year to receive and deliver products, and to take care of routine maintenance, breakdown, out of service inspections and project work such as changing product in a tank or updating systems/infrastructure. Some projects, like a current one to replace electrical infrastructure, will end up costing over one million pounds and take up to four years to complete. Seeking to maintain a good level of control, project management work is handled internally, with Simon developing its own conceptual and then detailed design, tendering, selection of contactors and management of project delivery through to project commissioning and handover to the terminal. Over £2m is spent on capital maintenance projects annually, primarily to tackle ageing plant issues. In addition to the ‘routine’ tank inspections – there are 137 tanks in the West and 104 in the East. Keith told Fuel Oil News: “The big push is now on the site’s key arteries, its pipework.” Visual detailed checks, radiography and NDT techniques are among the methods used to identify corrosion, poor quality welding and other defect issues. At the West 95% of tanks are the original build although many have had major refurbishment work performed, including new floors and bases installed, as a result of the ongoing inspection and refurbishment programme. The cost to rebuild three tanks recently was £5m. Some ten tanks have been totally replaced on the West terminal alone as a result of this inspection programme. “This is the proverbial Forth Bridge – we’re constantly seeking to identify potential problems and then fixing them – making it a very capital intensive business,” explained Keith. “We audit ourselves and our contractors – we step in early to correct so that any identified poor practice, be it safety related or quality of delivery, is not allowed to escalate. This is a human intensive process and virtually a permanent construction site with up to 100 contactors on site at any one time. “For example, we’re currently studying the site fire system – which was built some 25 years ago. Life’s moved on so we’re assessing ours against current best practice and expect to spend a not insignificant sum on making the system fit for the next 25 years of its life.” With energy costs to run the sites a big consideration, a biomass boiler, rather than an oil one, is being considered for steam production. It is hoped that a mix of energy sources will give some protection against future energy price fluctuations. Coping with the legacy of Buncefield “The industry’s head went down in a big way post Buncefield,” said Keith. “Working with regulators, the industry took a long, hard look at how it conducted itself in order to learn from the incident. Simon, in common with the rest of the sector, has spent much time and money in improving technical competence as well as its infrastructure; we now have a much better structure in place to effectively control Major Accident Hazards as well as better and more demonstrable safety leadership. “Born out of Buncefield, the implementation of the containment policy has made a huge change around the site. New bund walls have had to be constructed extending up to three metres below ground. Boreholes enable regular samples to be taken to monitor groundwater quality and movement. We’ve spent over £2m on work so far at Immingham that is necessary to give us a licence to stay in business. Working in a changing storage world “The storage industry has seen a lot of change over the last few years; as oil and chemical majors have retreated, we’re working more with oil and chemical traders and wholesalers. The latter are part of a logistics chain rather than original manufacturers, meaning that customer technical expertise has dwindled and the level of contact and information quality has declined.” Simon does draw on in-house expertise – its safety team is headed by a chemistry PhD, and there are specialists in environment, mechanical, electrical/control engineering and human behaviour – and, being part of a larger group, there is usually someone with the right knowledge to help handle any new specialised product. The retail market has become increasingly difficult with an overall decline in consumption, and dieselisation of the car fleet. The UK is now a net importer of diesel and adding ethanol to gasoline, which is in oversupply, for RTFO purposes has exacerbated its market problems further. International product imbalances have removed traditional dumping grounds for gasoline from Europe. “It’s a buy one, get one free market, where gasoline is taken in return for a deal on diesel from UK refiners,” said Keith. “We are pleased that from a standing start, our customer, Prax Petroleum, has been successful in growing its commercial business here at Immingham against this background of a difficult market. “We’ve been reasonably successful in attracting new chemical business,” said Keith. “It’s a market dear to our hearts and one in which we have much technical expertise. REACH has had the effect of driving out hazardous chemicals from the market, particularly toxics. Regulatory pressure in Europe means it’s increasingly difficult to operate here; much manufacturing has gone to the Far East where there’s little equivalent environmental legislation. New world scale plants offer economies of scale and levels of manufacturing integration and sophistication that are simply not achievable in European plants that were often constructed in the post war period. Coupled with structural changes, manufacturing businesses closing, and supply contracts ending, it’s a sad reflection of a chemical manufacturing sector in decline. “In February 2014 COMAH, after amendment under SEVESO III, will classify fuel oil as Dangerous for the Environment. For a market that’s not great right now and has not been historically strong, this additional legislation will be another challenge. Traditionally a lower end product in the market, this new classification has the potential to introduce significant new costs to the storage of this fuel which is already seeing reduced volumes. “Marine fuel also has issues. As ship operators look to move away from heavy fuel oil as a result of SECA (Sulphur Emissions Control Areas), we face the biggest change since shipping moved from coal to oil. Government sponsored Navy oiling stations around the world provided physical impetus for the change from coal to oil burning ships of the line and the merchant fleet at the turn of the 19th century; now we face a new transition. LNG is mooted as the new marine fuel of choice but its storage, shipping and distribution are extremely difficult and hence expensive; there are no current standards for bunkering and little infrastructure on the ground and no national need to drive through change. LNG storage has been built in Rotterdam (GATE) and in the UK at the Isle of Grain, amongst other UK/European locations. However, these were not designed with ship bunkering specifically in mind or indeed any break bulk activity for onward distribution, although clearly these are under consideration now. Construction of smaller scale distribution and bunkering sites at other main UK ports is a possibility but we are a small island where typically no one wants LNG storage in their back yard. However Simon will look at opportunities in this field and, if there’s half a chance of making it work, we’ll explore the relevant avenues to develop concepts on a commercial basis.”