Normative Narratives


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Transparency Thursday: Is Your Heating Oil Company Stealing Your Money and Making You Sick?

Hey everyone. It has been an exciting week for me, starting my internship at the UNDP. Lots of great people there working on some of the most pressing issues facing the world today (and looking forward into the future).

As for the blogging schedule, it will be as follows: Transparency Thursday, Friday Economic Outlook, Saturday Conflict Watch. No more sports analysis for now, as I need a little personal time, and I feel that quality unbiased sports analysis is readily available from a number of sources.

Also, between all the topics covered here at NN, sports was always the one that didn’t really fit in with the rest. Maybe one day I’ll get back to it, and certainly if there is an important enough story in sports it can crack the Transparency Thursday rotation, but for the foreseeable future that will be the schedule.

Back to the story at hand; a recent report from the NYT highlighted a criminal suit brought against some of New York’s biggest heating oil providers for illegally “cutting” heating oil with recycled or waste oil. “…companies that in recent years have sold tens of millions of gallons of oil to New York City and New York State for schools, housing complexes, universities, hospitals and other buildings.”

“As part of the criminal investigation, the authorities on March 12 raided at least five heating oil businesses in and around the city, including a delivery company and several businesses that deal in waste oil and some that are licensed to recycle it.”

“The businesses that were raided last week as part of the criminal investigation included Statewide Oil and Heating in Brooklyn — a company that is among several that deliver oil for Hess and that until 2011 delivered for Castle — and four interrelated companies that deal in waste oil: County Oil Company and J. B. Waste Oil Company in Astoria, Queens; New York Oil Recovery Corporation in Brooklyn; and Paradise Heating Oil in Ossining, N.Y.

During the raids, investigators from several state, city and federal agencies — some wearing bright yellow head-to-toe protective suits — tested oil and seized computers, reams of records and other materials, carting away more than 100 boxes of documents from one company alone, according to officials and people briefed on the matter.”

The criminal case coincides with a civil case brought against two of New York’s largest private heating oil providers: “Several commercial and residential building owners filed the two lawsuits, seeking class-action status. One accuses Castle Oil Corporation, which describes itself as the largest independent fuel oil distributor in the metropolitan area, of defrauding customers by mixing its fuel with waste oil. The other accuses Hess Corporation, among the world’s leading energy companies, of delivering fuel oil blended with waste oil to its customers, but one of the lawyers who brought the suit said in court last week that Hess might have been victimized by a trucking company or companies that it hired to deliver oil.”

“Last year alone, Castle sold more than 20 million gallons of No. 4 and No. 6 fuel oil — the grades burned in older furnaces — to New York City agencies, an official said. The lawsuit claims it was mixed with waste oil, like motor oil that has been used and discarded, sludge residue from commercial boilers and other used oil and lubricants.”

“But Castle, in its court papers, argued that the lawsuit’s contention that it mixed its fuel with waste oil was based on a single test of one delivery that it made last year out of 108,000, and that the suit provides no details on who conducted the test or how it was performed.”

Selling recycled waste not only is cheating customers by selling them an inferior product, it also poses significant health and environmental risks:

“Burning waste oil in furnaces could present a significant environmental hazard, and if the accusations that the companies cut their fuel are correct, it would mean that dangerous amounts of toxic pollutants had been released into the atmosphere, experts said.”

“Robert F. Kennedy Jr. — a senior lawyer for the Natural Resources Defense Council, the president of Waterkeeper Alliance and one of the lawyers who brought the lawsuit against Castle — said the environmental impact of the company’s actions were stark.

‘Basically, that company has turned every boiler or furnace that it services into a toxic-waste incinerator, ’Mr. Kennedy said in an interview. ‘When you burn waste oil, there is a tremendous amount of not only benzene, toluene and xylene, which are known carcinogens, but in addition, there is an inventory of heavy metals that are extremely toxic, including mercury, lead, arsenic, cadmium, antimony and zinc.’”

First, I would like to address Castle’s claim that the suit “was based on a single test of one delivery that it made last year out of 108,000”. The way I see it, there are only two possible scenarios which make sense here.

A)     There was a false positive on this one test, meaning Castle is indeed being wrongfully accused.

B)      Castle has been mixing in recycled / waste oil into their heating oil—systematically. It makes little sense that one shipment would be “cut”, as the oil is likely processed in huge quantities.

Of course this is all speculation until more details come back on the failed test. But is logical to assume either none of the oil is cut or all of it is.

Secondly, we will address the difference in the two cases. Presumably, the civil case is brought based on evidence that these 2 companies (Castle and Hess) had been involved in the process of selling “cut” oil to private customers. Whoever purchased the oil would have to bring a civil suit against the private companies. If enough people were affected, the case could turn into a “class-action lawsuit”.

In a criminal case, the government brings action against a party.  If cut oil was sold to schools or other public institutions, then it would be a crime against society as a whole. The criminal case makes sense as the victim in this case would be the government and ultimately the taxpayers. Add in the elements of environmental and healthcare concerns, which are regulated by the government, and a strong criminal case begins to form.

These two cases are both in early phases, so we will have to stay posted to see what comes of them. There are moral and ethical, as well as legal implications for misleading customers. The negative publicity from even being under investigation is likely already hurting these companies. Factoring in potential health and environmental degradation, it would not be surprising if ultimately these companies were forced to pay huge fines. Additionally, I would not be surprised to see stricter industry oversight in the future.

As the price of oil has risen, it seems the quality from some providers may be going down. All the most reason for people to consider more environmentally friendly and transparent forms of energy, such as geothermal and solar.

 


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Transparency Thursday: Recycling New York City’s Garbage

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Turning waste into energy may seem futuristic, but in this case the future is today. There is currently a high capacity operational waste-to-energy plant in Malaysia.
“K.S. Sivaprasad, an engineer from India, spent four decades perfecting a factory that accepts city trash, dries it, picks out the burnable elements and ignites them to create electricity. His first full-scale plant chews through 700 tons of garbage a day and delivers 5.5 megawatts to the power grid.”

In the U.S., waste-to-energy used to be unregulated and, as you could imagine, quite environmentally harmful. Burning trash, without taking the proper measures, released all sorts of greenhouse gasses into the atmosphere. Over time, the process has become more regulated and environmentally friendly:

“Proponents of WTE technology argue that thermal processing is a form of recycling and that new technologies and EPA regulations have eliminated the odor and air pollution many people connect with the process of incinerating trash. Professor Nickolas J. Themelis, director of the Earth Engineering Center at Columbia University, said he thinks that much of the opposition to creating WTE plants in the city stems from people’s memories of the bad old days.

“At one point New York had 30 municipal incinerators and about 15,000 residential incinerators with no regulation at all. It was a mess,” said Themelis. “There is this kind of animus among people who have been exposed to incinerators in the past. They associate them with black smoke and horrific pollution. But the truth is, those are all gone now. The pollution generated by trucking waste to landfills can’t compare to how little a modern WTE facility produces. The people who oppose these technologies are like the Flat Earth Society, they are holding back progress.”

Mayor Bloomberg called for a pilot waste-to-energy program in NYC this past March:

“Mayor Michael R. Bloomberg announced on Tuesday that the city was looking for a pilot “state of the art facility” that could handle a maximum of 450 tons of trash a day — out of a total of 10,000 tons currently in need of disposal — with plans to double that capacity if successful. The plant, which must be in New York City or no farther than 80 miles away, would be privately built and operated.”

Mr. Sivaprasad wants to expand his operation, not in NYC, but in India.

“Mr. Saxena’s involvement will help the company apply for a grant from the Trade and Development Agency in the United States for the next project that Mr. Sivaprasad would like to build: a plant that would absorb 1,200 tons of trash a day and produce 10 megawatts of power in the southern Indian cities of Chennai or Bangalore.

“Some improvement is coming in, and with American money I can clinch a project,” he said. “This has taken a very long time.”

If he is applying for American financing, the project should be in America. Seeing as Mayor Bloomberg is a proponent of the project, and Mr. Sivaprasad clearly has the ability to create a high capacity fully functional waste-to-energy plant, a NYC project seems like a natural fit for both parties.

“There are currently 10 WTE facilities statewide licensed by the Department of Environmental Conservation to burn municipal waste and convert it into steam and electricity. One is located in Peekskill, about 50 miles up the Hudson River. The facility is owned by Wheelabrator, a subsidiary of Waste Management, the country’s largest waste processor, which serves more than 20 million residential, commercial and municipal customers nationwide.”

This idea sounds like a great way to deal with New York City’s garbage in a sustainable and profitable way, whats not to like about it? It is literally making money from trash, brilliant!