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NYC Building Regulations: Changing the Oil

By August 5, 2011 April 15th, 2018 General Updates

It seems that “green is the new black” for Mayor Bloomberg and New York City. As one of the environmental initiatives for a cleaner New York City, Bloomberg announced that there will be new heating oil regulations for buildings in New York City that could start as early as next summer. In her NY Times article, “10,000 Buildings Get the Word,” Vivian S. Toy explains the impact the new heating regulations will have on the buildings that prepare to take the plunge into cleaner heating methods.

So, who should care about this? Well, if you are a Board Member, Coop or Condo Owner, or Property Manager in New York City, chances are discussions have already started about how to make your building compliant. If you are a resident of one of these buildings you may be asking yourself, “How much is this going to cost me?”. Keep reading as we unfold this new regulation and the questions surrounding the matter:

What are the new heating oil regulations?

There are two phases to Bloomberg’s plan:

  • Phase 1:
    By 2015, New York City buildings must switch from No. 6 heating oil to the less polluting (but also more expensive) No. 4 oil.
  • Phase 2:
    By 2030, all buildings must burn No. 2 oil or natural gas.

 

How much will these changes cost?
I think the question here should be this: Is it more financially beneficial to complete the conversion in steps or go straight to natural gas? According to David Kuperberg of Cooper Square Realty, “the initial cost [to convert to natural gas] scares off a lot of buildings, but the savings from gas conversion could pay for the upfront costs in a few years.”

  • Phase 1:
    According to the Real Estate Board of New York, “switching from No. 6 to No. 4 oil could cost as little as $7,000″ (NY Times). Some challenge this figure to be a “best-case scenario” for a building that needs minimal updating.
  • Phase 2:
    The cost to upgrade all the way to natural gas could fluctuate greatly depending on how close your building is the gas line and the updates necessary. In the two examples cited, it cost the 20-story Brevoort cooperative $225,000 while it only cost 15-story 910 Park Avenue $73,000 to convert from No. 6 oil to natural gas. It is worth noting that 910 Park Avenue was conveniently located near gas lines and the Brevoort stands to save $70,000 in yearly fuel costs. Cost savings could also be found if a building commits to a gas contract with a certain utility company or if multiple buildings on the same street convert at once.

 

How long does the process take?

Once the board approves the change and budget, it is a matter of getting permits and converting the equipment which could take 4-6 months. The next step is that a utility company like Con Ed or National Grid must connect the building to the gas line. This second step is more unpredictable. If your building is far from the gas line, it will take more work (and money) to rip up the pavement to connect the building.

While everyone wants to make New York City a healthier place to live, some may have hesitations when taking on such a costly and unpredictable project. The cost of gas and oil could fluctuate greatly and we can’t predict how this will affect compliance to the regulation. Also, some may not feel comfortable with investing in new technology that is an important part of the success of this initiative. It is important for each Board, Coop or Condo Owner and Project Manager to assess and decide what is right for your building: Should you go for the plunge to natural oil?

“City officials say that the soot pollution created by the 10,000 buildings that use No. 6 oil exceeds that amount created by all the cars and trucks in the city.” Well New York, I guess it’s time we cleaned up our act.

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BONUS: NYSERDA (New York State Energy Research and Development Authority) is offering a Multifamily Carbon Emissions Reduction Program as an incentive to switch your building from No. 6 fuel oil to No. 2 fuel oil, natural gas, biofuels, propane, woody biomass, district steam and renewable energy sources.

Please Note: Only buildings using No. 6 fuel oil can qualify and buildings that switch to No. 4 fuel oil are not eligible.

As of July 13th, 2011 all fund have been allocated to existing projects but applications are still being accepted for the waiting list. See their website for details.