On a scale ranging from good to bad, buying a home with an abandoned and leaking oil tank is clearly on the downside of the balance sheet. The good news is that properties with these tanks are rare, but they exist, and dismantling and cleaning up oil tanks can be costly. 

Here are some of the risks of buried oil tanks, as well as some tips to protect yourself from expensive cleanup costs in the case that oil leaks from the tank or oil contamination are found on your property.

 

Risks of Buried Oil Tanks

The risks of an underground oil tank vary from environmental and legal to financial and health. First, if your oil tank leaks, the cost of cleaning up contaminated soil and water can amount to thousands of dollars, and the insurance may only cover a portion of these costs, increasing your risk.

Second, if your leak affects a neighbor’s yard or a nearby business or government agency, you could face lawsuits that exponentially increase your financial burden.

The environmental impact of a leaking subway oil reservoir should also not be ignored. If the leak extends from the ground to the groundwater, the groundwater can become contaminated and unusable for irrigation. If the leak reaches surface water, this danger extends to nearby residents and surrounding wildlife.

Even if the leak does not get into surface water, the health effects of concentrated oil vapors can range from headaches and drowsiness to more severe conditions if exposure is prolonged.

To protect yourself from these unfortunate consequences and others, read on and learn how to discover an oil tank on your property and ensure it will not be a burden.

 

Homes Using Oil Heat with an Underground Oil Tank

If you are a homeowner and you have an active oil heating tank (meaning your current heating system runs on oil), you should look into getting it covered by insurance. That is because oil tanks and the network of pipes leading from the tank to your home are all susceptible to leaks, making them significant financial and environmental liabilities. 

In Washington State, you can register your tank through the Pollution Liability Insurance Agency (PLIA), which offers free insurance to anyone in the state who registers with the program.

If you plan to buy a property with active oil heat, be sure the current owner has registered the tank. If they have not, you will need to register the tank as soon as you get the property.

As a general rule, the longer the coverage history, the better; this allows the insurance program less opportunity to claim a pre-existing condition if a claim is submitted.

 

Homes with Inactive Oil Tanks

The last four decades have seen a dramatic shift away from oil in favor of natural gas as the fuel used to heat houses. The reason for this shift is two-fold: oil is more expensive than natural gas, and oil prices are volatile and subject to spikes.

Keep in mind that natural gas is a relatively new product. Natural gas began arriving in our homes in the Seattle area in the 1960s. Therefore, most homes built before the 1960s likely had oil heat at one time, even if they now have natural gas.

 

You could put these older natural-gas-powered homes into two categories:

Old house with an abandoned oil tank

In my experience, most oil tanks have been dismantled. That is where a professional contractor empties the tank and either cleans and refills the tank or removes it.

However, beware of property with active natural gas heating and an abandoned oil tank because the PLIA insurance program would not cover it.

In addition, if the heating system was running on natural gas and oil contamination was found at that location, the owner would be responsible for cleanup.

Buying a House with a Buried Oil Tank

If you are worried that the property has an abandoned underground oil tank that may leak or will leak in the future, you will want to have the property evaluated by a contractor.

Try to have the seller decommission the tank before you take possession of the property; this way, if problems arise in decommissioning, you will not own the property when this occurs.

If you see no evidence of a buried oil tank outside, but you find evidence inside, do not just assume the tank has been dismantled. Ask the seller for a copy of the decommissioning statement and add this document to the title.

In the event of losing the information, there is a permanent record of the decommissioning of the oil tank. When you sell the house, this statement should be available to pass on to the new owners.

 

Dismantling: Should I Remove My Oil Tank or Have It Filled?

If you have determined that your property has an underground oil tank, whether active or inactive, you have several options for proceeding. The process of decommissioning refers to permanently closing a tank by either capping it, filling it with material like foam or digging it up and removing it from the ground completely. 

Each of these options has variables to consider. However, filling the tank with polyurethane foam may be the best option. It presents no health risks, is relatively lightweight if you decide to obliterate the tank, and has the strength to ensure that the tank’s structural integrity will remain intact.

Regardless of which option you choose, you must want a reputable oil tank removal professional. A shoddy decommissioning job puts you at risk for leaks and further liabilities in the future.

 

How to Tell If You Have an Abandoned Oil Tank

On the exterior, look for the presence of BOTH a gas meter AND an oil tank fill valve or breather pipe. If the buried oil tank has been dismantled, the vent pipe and fill valve will usually be removed or cut off, so there will be no signs of an oil tank on the house exterior. The presence of BOTH a gas meter and an oil tank indicates the tank might be abandoned.

On the inside of the house, go to where the furnace is installed and look for small copper lines. They often come in a set, and the copper tubes are clamped at the ends. That indicates that the house was once heated using oil and may have a buried oil tank.

Please note: these guidelines and principles will vary regionally. In addition, this article is limited in scope and does not cover some of the more complicated scenarios that can come with oil tanks and soil testing. Be sure to seek the advice of local experts in your area when buying a house.

I hope this helps explain some commonly asked questions about oil tanks. Remember: happy homebuyers are informed homebuyers. Good luck house hunting!

 

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