Let's Talk Oil Tanks!


Let’s Talk Oil Tanks!


There is so much uncertainty around this topic.


First, oil tanks are used for heating oil storage.  The oil is then used for oil fired furnaces and boilers.


There are two main types of residential oil tanks. One type is buried in the yard and the other is above ground. The above ground type may be located inside or outside of a building.



Occasionally, Municipal governments will require the removal of buried oil tanks. Surprisingly, some bylaws, in the past, mandated installing oil tanks below ground as they were considered unsightly and neighbourhoods were considered more “upscale” with buried tanks.  This is like how we view underground power lines today.


Over the years it was realized that buried oil tanks would fail, resulting in environmental consequences and heavy costs for the homeowner. The governing bodies then changed the mandatory requirements. Unfortunately, the trend of buried oil tanks had already spilled over to less exclusive neighbourhoods, in appreciation of the perceived lack of “eye sore” factor. This means, a buried oil tank can be found on any property in any established neighbourhood. Due to the associated problems with buried oil tanks, the general adoption of above ground oil tanks began.


Curiously, most homeowners, after switching from a buried oil tank to an above ground oil tank, decided to leave the buried oil tank in place and hoped everything was “just fine”. In fact, some homeowners had no leaking occur and they had no problems, however some homeowners were not so lucky!


Leaking oil tanks are an environmental concern both for soil contamination and ground water contamination. Through runoff, contamination can also spread, affecting streams, lakes and rivers. Remediation is costly and most of us have heard the horror stories. This has resulted in the insurance industry driving a movement to locate and remove any remaining buried oil tanks on the properties they offer coverage for. This prevents further contamination and mitigates risk, even though most insurers have exclusions in their standard policies for this type of damage/loss.  These exclusions leave the homeowner with all the responsibility and the clean-up costs.


Above ground oil tanks are monitored closely by the insurance industry. If tanks are older than 10 years, the homeowner will likely be denied coverage. Insurers may require proof of age and condition and may insist on installation of a new oil tank.


Above ground oil tanks have changed a lot over recent years with many improvements such as double bottom tanks, double walled tanks, and sloping tanks to discharge water accumulations. Now there are not only steel tanks, but hybrids of steel and polyethylene and fiberglass oil tanks. In addition, all oil tanks are now required to have earthquake strapping attached to a concrete base.


As hard as it is to remember, it’s a good idea to monitor your oil tank by sight and smell for signs of leaking.  You may be saving yourself a lot of grief and money if you catch a problem in the early stages.


The age and location of oil tanks is often a topic raised through real estate transactions.  Buyers need to comply with the insurance companies’ requirements as part of a mortgage application. No insurance = No mortgage for buyers. This is the single biggest driver for removing buried oil tanks. Some sellers are proactive and have them removed prior to listing, to assist their sale and potentially save costs, but either way buried oil tanks need to come out.


More information available at Pacific Group Developments



Published 16 August 18 12:47 by SANDY STINSON


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