By Christina Hager

BOSTON (CBS) – Sheena Marandino knew something was wrong when she woke up to a frigid house. “It was a little bit scary cause I didn’t know what was going on…We just went around and started putting extra blankets on everybody.”

She had gotten a delivery from Peterson Oil earlier that day. Hours later, the heat stopped working. When she called her boiler technician the next morning, he told her the oil looked darker than normal. “Obviously there was an issue with this batch of oil,” she said.

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WBZ’s I-Team took a sample from her tank to scientists who research biofuel at the Woods Hole Oceanographic Institute. “This sample is so much for our instrument, we’re actually going to have to stop our instrument and clean it,” said senior scientist Chris Reddy. His instrument showed Marandino’s oil was 80 percent biodiesel, which is fuel made from kitchen grease, among other renewable sources. “This looks like somebody poured all the bio in there. I can just tell you the instrument, it doesn’t really lie,” said Reddy.

While most in the industry agree biofuel is the wave of the future, so far the federal government only recommends blends up to 20 percent biofuel, because standard home heating systems are not set up to handle higher blends yet. Peterson Oil, the company that filled Marandino’s tank and also owns Cleghorn Oil, advertises on its website that it sells biofuel. The owner owns a plant that manufactures it in New Hampshire.

Peterson Oil (WBZ-TV)

A former Peterson Oil technician who wanted to remain anonymous to protect his job security, met with the I-Team, admitting he was not always honest with customers about it. “Not at first, not at first.”

He said he spent countless hours dealing with burners shutting down because they were not adjusted to handle the high bio-blend. He said it also clogged nozzles and filters. “I just got tired of lying to customers,” he said. “It just wasn’t right.”

Samples collected by Peterson Oil technician (WBZ-TV)

He started saving samples that he said came from customers’ tanks. The I-Team took them to the lab in Woods Hole. “This is almost a pure mixture of biodiesel, and there’s just a faint drop of petroleum diesel in there. It should be the other way around,” said Reddy. Tests showed all the samples ranged from 80 to 95 percent biodiesel.

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After repeated attempts to get answers from Peterson Oil, the I-Team drove to its headquarters in Worcester. Owner Howard Peterson denied selling the high bio-blend known as B80. “I don’t think I’ve delivered any B80 for a number of reasons,” Peterson said. “One, we test it.”

He raised doubts about the test results from the lab at the Woods Hole Oceanographic Institute. “I don’t believe so,” he said. Peterson stressed he’s in favor of pushing for more biofuel in standard blends. “We need to be at 80, not 20,” he said, referring to percentages. “I believe that we can achieve this, and I believe that someone needs to go first.”

Howard Peterson owner of Peterson Oil (WBZ-TV)

Several customers tell WBZ they were never warned. “It’s not an option to go without heat,” said Shawn Hayden, who runs a state-funded treatment program out of a house in Gardner. The heat stopped working for a weekend after Peterson filled the tank there. “So they had to come in and pump all this out,” he said, pointing to the tank.

He and Marandino want a refund and an apology. “Just admit what you did was wrong,” said Marandino. “Just make it right with everybody that you’ve messed over.”

According to the Massachusetts Energy Marketers Association, retailers are required to tell customers what percentage of biodiesel is in their fuel. Peterson told WBZ he does that, but when the I-Team checked receipts and contracts, there was no mention of biodiesel, and customers said they were never informed.

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In an email, Howard Peterson told the I-Team, “I have pioneered the use of renewable energy.”

Christina Hager