Underground Oil Tanks
Underground oil tanks were never intended to be underground forever. Right now they’re out of sight – out of mind and that’s the problem. Life expectancy is supposed to be 20-25 years and the old ones need to come out. Interestingly enough, no laws say they have to come out. But if they’re leaking, they do – and the probability is HIGH.
Opposite of assumptions, the older the house, the least likely the tank will be leaking. The old tanks were extremely solid and built with thick walls. It is hard for the acidity of soil to penetrate those walls.
We mainly worry about the tanks in houses built in the 1960’s – 1970’s during the Vietnam War era. The US was sending steel to the military to help them build an arsenal. We didn’t create that same quality steel at home anymore and now they’re not doing well against the pressures of the environment.
Tanks actually leak from the inside out most of the time. As the oil/liquid gets used and the level gets lower, the walls inside the capsule begin to sweat (condensation forms). Water and oil don’t mix. Oil rises to the top and water sinks to the bottom. Water on steel over time begins to rust out the bottom of the inside of the tank are starts producing holes. The acidity of the soil eating away at the outside of the tank and water eroding away the inside of the tank is a perfect storm for us homeowners.
Asking the sellers to take the tank out of the ground isn’t unreasonable, as eventually, Mother Nature will do her thing and oil will leak into the soil and then into the groundwater or nearby reservoirs, etc. If you’re able to remove the tank early before any leaks, the cost isn’t crazy. Where the numbers get high is AFTER the leaks contaminate the soil and the EPA has to get involved.
Cost to Replace
Removing underground tanks that are no longer leaking can cost $1200-$2K on average. If the location is in a hard-to-reach area and digging will be difficult, expect more cost.
Here’s the kicker: if the tank is leaking, the cost rises significantly and could be tens of thousands of dollars. Once the contractor sees or measures the soil for oil they are mandated to report it to the EPA. The surrounding soil will need to be removed and cleaned. There will need to have 8 clean samples of soil presented to the EPA to get an OK. This process is NOT easy or simple. We used to just take the oil out, clean the tank, and fill it with sand or foam or rock and close it back up. Today, we realize the damage these tanks can cause and the preferable method is to just take them out of the ground.
Replacing an oil tank with a double-walled above-ground tank costs approximately $2300. The double-walled tanks solve the condensation problem, much like a double-walled thermos. The inside of the tank is also made of a material modeled after Tupperware – it doesn’t leak. Won’t rust. Won’t sweat. Roth is one brand and they are so confident that each comes with a transferable million-dollar warranty for 25 years.
Rebates are available, up to $1300 through the CT Energy Marketers Association website (below).
Above-Ground Oil Tanks
The life expectancy for above-ground oil tanks is 20-25 years, as well. Did you know you can visually identify when above ground tank might leak??
Tell-tale signs:
(Disclaimer: I’m not a home inspector. Seek their advice if you notice an issue.)
- Look under the belly. Is it starting to bulge? The top and bottom should be the same shape. It’s a sign the steel is starting to spread and thin out. The tank was never intended to hold the weight for over 25 years. It means the steel is starting to give way.
- Legs should be perfectly straight. If a small buckle starts to form, it’s on the verge of collapsing. If it buckles and the bottom hits, the tank will split open. That’s no good and very expensive to clean up.
- A white waterfall of corrosion seeping down the sides is also a sign your tank has seen its final days. It’s an acid-like substance eating away at the steel and will flow to the bottom of the tank. Again, the corrosion on the outside eats the bottom of the tank at the same time the rust on the bottom of the inside. A double whammy.
A real quick test to see if there are any active leaks: run a tissue under the tank to see if there are oil leaks.
Some more good information:
- Connecticut Energy Marketers Association CEMA): https://www.ctema.com/
- CT NORA Rebates for Heating Equipment and Tanks: http://www.upgradeandsavect.com/
- Order FREE Materials: https://www.oilheatpros.com/ct/get-materials/
Connecticut is a state with predominantly oil-heated homes. As winter is on us, one of the top questions we all ask as oil-heated dwellers is “What can I expect”? I immediately sat to write this out after a conversation with a heating oil expert so I can let you all know the hints and tricks for this upcoming year.
The two main challenges are going to be PRICE and SUPPLY. It seems to be a reoccurring theme, so listen up!
Price Concerns Because of Supply
Prices are high but have remained fairly steady in the past few weeks. Gasoline correlates with oil, as they come from the same source. The prediction from our expert for the winter is that it’s going to get really bad, mainly because of an upcoming shortage.
Why? The War with Ukraine. One, war triggers crude oil to be a hot topic and Wall Street speculators are hot-to-trot day trading crude oil. The millionaires are getting richer and are NOT complaining. Same old story. Two, the US likes to help our friends. We are foreign-oil independent for winters like these, but when our allies are in NEED of oil because of war, we step in.
On Dec. 5th Russia declared that any country that aligns with Ukraine will be cut off from Russia’s crude oil. Europe is dependent on Russia for its oil. The US wants to help its allies and has begun exporting some of its supplies to Europe so the Europeans don’t freeze this winter. This, in turn, causes the US supply of oil to decrease – at a time when we need our reserves. When supply goes down, prices go up. AND THEY WILL GO UP.
I’m going to pop you back into history for a quick second. In July 2008 there was an oil crisis. Prices went up fast and we panicked and locked into fixed rates. But then prices dropped and people who locked in had to pay super high rates. Local oil companies got a really bad rap because they wouldn’t budge and lower their prices. The idea of locking in also got sour. Why didn’t they lower their prices?? Because when you lock in with companies, the companies then pre-pay their dealers, so our local companies are locked in, too! They can’t cut you a break, as their hands are tied, as well. Really.
So now what??
- Locking in is can be smart, but do NOT lock into a fixed rate with just any company out of fear of rising prices. Dig deeper. Ask the oil dealer if they’re offering a cap rate. If prices go higher you don’t pay more, but also make sure that if prices go down you get lower prices, too. If your dealer isn’t offering a cap rate, don’t go there. Also, ask if they’re offering an incentive cap rate deal – they offer an even better price because they’re trying to grab new customers.
- Budget program: With prices going high, anticipate high bills in a short period of time. If we have a super cold winter you could be looking at $900-$1000 fill-ups every 3 weeks – OUCH. That’s a hard pill to swallow for even the high rollers. A budget program spreads payments out over the year. When winter’s over you can pay the winter hit off and get off the plan. Know the specifics when asking questions.
- Get on automatic delivery TODAY!! Some people like to monitor their tank levels and call around to discount brokers. I used to do it. This is not the winter to do that. With looming shortages, discount brokers won’t be able to get supplies (and will potentially go out of business) and the dealers who can get supplies are going to take care of their primary customers first. The automatic delivery customers are their primary customers that they are contractually committed to. Get on an automatic delivery program so that you CAN get oil.
Note: If you choose to not heed any of the above advice, and you’re running out of oil and can’t find a supplier – don’t panic. Did you know that diesel at the pumps is 100% pure heating oil? If you’re running low on oil, go to the gas station and fill a 5-gallon jug with diesel, and pour it into your tank. It will buy you some time. It’s a different color, yes, but the same product. (It’s dyed because truckers were using tax-free heating oil to fill up their trucks to avoid paying taxes and the government caught on. Truckers need to pay taxes like everyone else and there’s a heavy fine if they get caught.)
- Connecticut Energy Marketers Association CEMA): https://www.ctema.com/
- CT NORA Rebates for Heating Equipment and Tanks: http://www.upgradeandsavect.com/
- Order FREE Materials: https://www.oilheatpros.com/ct/get-materials/