Fuel Dealers, NEC

SIC 5989

Companies in this industry

Industry report:

Establishments in this industry primarily sell coal, wood, and other fuels, not elsewhere classified.

According to the U.S. Census Bureau, 191 establishments operated in this category for all or part of 2008. Industry-wide employment totaled 588 employees who earned annual wages of more than $13.8 billion. California led the nation with 33 establishments, followed by New York with 18 establishments.

The National Mining Association reported coal production increased to 1.17 billion tons in 2008, falling to 1.07 billion tons in 2009, a decrease of 8.5 percent year over year. According to the Energy Information Administration (EIA), "The global economic recession had a broad effect on energy fuels as well as other commodities in 2009�" Additionally,

According to the National Mining Association, 2007 coal production in the U.S. totaled approximately 1.15 billion tons. This was about the same amount produced in 2000, with 940 million tons going for domestic use and the remainder being exported. Over 90 percent of U.S. coal was sold to electric utilities in 2007. Approximately 5 percent was sold to the industrial, residential, commercial, and transportation sectors. Americans were projected to consume 580 million cubic meters of wood and wood products at the beginning of the twenty-first century. Most U.S. fuel wood is sold to electric companies.

In 2006, the U.S. imported almost $21 billion dollars more of forest products than it exported. For the first time in 6 years, the trade deficit in forest products decreased. U.S. wood exports have remained nearly steady since 2001, while foreign wood imports have increased at a rapid rate. At the same time, developing countries burn nearly two million tons of wood fuel each day. Wood fuel supplies are up to 95 percent of domestic energy in these countries and also contributes to commercial and industrial needs. Because wood produces heat at less than half the cost of gas and oil, in the mid-2000s, some in the industry were hopeful that wood products would be incorporated more readily as part of fuel supplies on a larger scale. Wood brokers were hoping to break into the larger non-industrial market by touting the benefits of biomass energy, which included reduced emission potential. In fact, the trend in the late-2000s is that the demand for alternatives to fossil fuels will drive the demand and prices up for wood fuel alternatives, especially in the South and Pacific Northwest.

Companies in this industry are affected mainly by production levels of the products they sell and by customers' use of competing fuel sources, such as petroleum and natural gas. Coal was the leading source of fuel used in the United States until the 1920s, when the growing popularity of automobiles and developments in the aviation industry introduced new fuels. Meanwhile, the coal industry over-expanded, which led to intense competition among coal mines and a decline in coal prices, both wholesale and retail. By the 1940s, the coal industry lost one of its largest markets after railroads converted to diesel-powered systems. Coal consumption rose again in the 1970s and 1980s due to the oil crisis, which prompted new coal-processing technologies. At the start of the 1990s coal production rose 4 percent annually with increasing demand from electrical utilities. And by the mid-2000s, the biofuel industry was in the early stages of growth and development. A main distributor and key player in this industry is Earth Biofuels, Inc., which was founded in 2004. Its 2006 operating revenue was nearly $40 million.

During the mid- to late 2000s, the biofuel industry continued to make inroads through funding and research efforts. In one such effort, the Department of Energy's Office of Science awarded $6.9 million for seven projects and the United States Department of Agriculture's National Institute of Food and Agriculture awarded $2 million for an additional two projects. "By harnessing the power of science and technology�will help accelerate research in the critical area of plant feedstocks, spurring the creation of the domestic bio-industry while creating jobs and reducing our dependence on foreign oil," cited from the BioFuels Journal in September of 2010.

Meanwhile, with fuel oil prices on the rise, so was the number of U.S. homes using wood pellet stoves. As of January 2011, there were an estimated one million households scattered throughout the U.S. utilizing wood pellets. According to John Ackerly, president of the Alliance for Green Heat, a non-profit organization, "Wood pellets are expected to be much more stable than oil prices in coming years, but equally important, wood pellets are a local, renewable fuel that helps this country be more energy independent and creates jobs here at home."

In 2008, just over 1,000 establishments were doing business under this industrial classification, down roughly 23 percent from 10 years earlier. Leaders in the industry range from big companies with large payrolls to smaller companies that still generate significant revenue. By 2007, the industry leaders were Refron Inc. of New York, with $90 million in sales from its core refrigerants units, and Petro Holdings, Inc. Petro Holdings is the largest retail distributor of home heating oil. It distributes approximately 377 million gallons of heating oil to homes in the Northeast and Mid-Atlantic states and had 2004 sales of $1.15 billion.

Earth Biofuels, Inc. is majority-owned by energy company Texas-based Appollo Resources International. Earth Biofuels acquired a 40 percent interest in aviation fuel supply company, American Petrox Inc. in February 2009. Refron Inc. reported revenues of $93 million in 2007 with 600 employees. The company was acquired by Airgas, Inc. in July of 2008 as the industry underwent a period of consolidation. While no sales figures were available for Petro Holdings, the company employed 600 workers who distributed 351 million gallons of heating oil to 402,000 customers in 2009.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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