What you should know about buried oil tanks

Any house built prior to 1970 has a very high probability of a buried oil tank. This is an environmental concern and may affect both your insurance and mortgage.

Residential heating oil storage tanks have been installed and used in Canada for over 60 years. There are two types: aboveground tanks (typically found in basements or outside of a home) and underground tanks (buried). Many of these storage tanks are now abandoned or unused, as alternative heating sources – such as natural gas, propane, and electricity – have become available.

Oil Tank Removal and Selling Your Home

Buried oil tanks can become a problem when selling, mortgaging or insuring your home, especially for older homes that have been converted to natural gas.  Many times the old oil tank was left buried in the ground and is now awaiting removal. Realtors are aware of the potential for buried oil tanks on properties.

Many homeowners are unaware they may have a buried oil tank requiring removal, but homes on Vancouver Island were often heated by furnace oil buried underground, particularly prior to natural gas becoming available in 1957.  The oil tank was often buried as a luxury to avoid large, unsightly above ground oil tanks.  Most buried oil tanks were located in the back or side yards of residences with the oil tanks ranging in size from 200 gallons to 1000 gallons.

As conversions to natural gas took place these oil tanks were commonly left buried underground, sometimes having been pumped out of any remaining oil but not always. 

Buried oil tanks may not become an issue until a home owner decides to sell. At that time the buyer will have an inspection done on the home.  The inspections are usually a subject clause in the purchase contract and are done prior to removing a condition of sale.  As with realtors, many mortgage lending institutions will inquire about buried oil tanks and may require verification of their removal prior to registering a mortgage over the home.  Insurance companies are also aware of the liability issues of buried oil tanks and typically require their removal with accompanying documentation. 

Why You May Need an Oil Tank Removed or Replaced

Home heating oil is a hazardous substance.  The average home may be storing up to 250 gallons (1,100 litres) of oil above ground in a metal tank or buried in the yard. All of these tanks will leak eventually, some in as little as 5-10 years, and will require removal.

Leaking oil contaminates everything it comes into contact with, including the soil, the ground water, basements, crawl spaces and the natural environment – including your neighbours yards or adjoining municipal or provincial lands. Your home insurance policy EXCLUDES losses caused by oil contamination and damage done, by whatever cause, to the ground on your premises.

You will be held legally responsible for clean up costs, which can be over $100,000.

According to the North American Petroleum Institute, “Underground oil tanks are like ticking time bombs.”

Because they are out of sight, buried oil tanks can cause damage without your knowledge.  This damage could occur over years.  Water can also leak into your oil tank, reducing your useable capacity and fouling your burners.

Heating oil is very pervasive and will soak into all porous substances, including concrete. It has a very strong odour which can be offensive to many people. However, most leaks for buried oil tanks go undetected until the removal of the oil tank from the ground. 

It is very common for oil to find its way into the perimeter drainage system of the house where it will flow into the public storm drains.  When this happens, a strong oil odour can permeate the inside of the house.  In worse situations, the oil will find its way into a neighbor’s drainage system, causing the same smelly problem.  Oil entering storm systems by any service connection pollutes public property and will result in large clean up costs not covered by insurance.

 For information on buried oil tanks and your responsibilities visit this BC Government link: http://www2.gov.bc.ca/gov/content/environment/air-land-water/site-remediation/residential-heating-oil-storage-tanks