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Heating Oil Storage Tanks

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Subject: Heating Oil Storage Tanks

Issue: 50   Date: July 21, 2001

There appears to be a lot of misunderstanding and confusion about oil tanks. The North Carolina Petroleum Marketers Association has a new brochure for Realtors (hot off of the press) dealing with this subject. I am reproducing the text of the brochure here with their permission. As you read this, please be aware that they are making every effort to put this issue in a positive light. At the end I will advise how you can get copies of this brochure for your clients, who you should contact if you have questions and add a few comments of my own.
North Carolina Petroleum Marketers Association
"Fueling North Carolina's Future"
This brochure has been designed to help answer the most common questions that homebuyers have about heating oil storage tanks, from regulations concerning thank abandonment to replacement options to tank protection.
A heating oil storage tank is a safe and convenient way to store an adequate supply of fuel to warm a home or heat water.
Unlike natural gas, there is no danger of an explosion in the event of a fuel leak.
With an oil tank, homeowners pay only for the fuel they receive. They never receive estimated fuel bills or pay extra fees.
There are two types of residential oil storage tanks:
An aboveground storage tank is a tank located in a basement, crawl space or outside the house.
An underground storage thank is a tank that's buried beneath a lawn.
The size of a tank is indicated on a heating oil company's delivery ticket. The most common tank size is 275 gallons. Other typical sizes are 280, 550 and 1,000 gallons.
The chance of a home oil tank leaking is very low.
According to a study conducted by ENVIRON, an engineering consulting company, "The frequency of releases from all underground storage tanks containing home heating oil is well below 1%.
Because heating oil tanks are not considered a threat to the environment, there are no federal or state laws that require the removal of a properly functioning and active residential heating oil tank.
The life expectancies of buried oil tanks vary, depending on the materials used in building the tank, how the tank was installed and the composition of the surrounding soil. Most tanks last for decades without problems. Properly installed and maintained, today's average heating oil tank can last for as long as 50 years.
The most popular option is to replace a buried tank with an above ground tank, typically installed in the crawl space and vented to the outside. These tanks are normally smaller (275 gallons) and can be customized for hard-to-fit places. Aboveground tanks can also be installed outside the home and hidden in a tank enclosure.
An alternative is to replace an old, bare steel, buried tank with a modern underground tank. Modern tanks are made from corrosion-resistant materials such as fiberglass, and they have a stronger wall construction than older tanks, providing further protection against leaks.
If a homeowner decides to replace an underground tank with an aboveground tank, the buried tank must be either removed or legally abandoned.
Although not required by law, the removal of an inactive tank is recommended by the North Carolina Department of Environment & Natural Resources. If this is not possible, the tank should be emptied, cleaned and then filled with an inert material, such as sand, slurry or foam. This is done as a safety measure because a tank that is not in use tends to deteriorate quickly, which could result in its collapse.
Before proceeding with any tank abandonment, homeowners should contact the local fire inspector to ask about local codes that may affect the abandonment or removal of an underground tank. Ordinances vary from town to town.
The best resource to contact is a local heating oil company, who can check the tank to see if it has been abandoned properly. No digging is necessary.
Make sure the fill cap and vent cap are secured.
Look for any leaks from the tank fittings, valves filters, gauge or piping.
Check for any signs of oil by the sump pump pit and floor drains.
Inspect for any signs of spills around the tank area, fill pipe or vent lines.
Check to see if there is an oil smell in the crawl space or basement.
Make sure the tank vent is not clogged or restricted by ice, snow or insect nests.
 Every homeowner with an underground oil storage tank is protected by the North Carolina Leaking Petroleum Underground Storage Tank Fund (Non-Commercial) that covers the cost - up to $1 million - for the assessment and environmental cleanup costs associated with tank leaks. There is no fee for this coverage.
Some restrictions apply. Please contact the Department of Environment & Natural Resources in your area for complete details.
Petroleum Marketers Association
7300 Glenwood Avenue, Raleigh, NC 27612
Phone: (919) 782-4411
For Further Information Contact:
Realtor Hotline
(800) 242-9882
Department of Environment & Natural Resources
UST Section
Main Office
1937 Mail Service Center
Raleigh, NC 27669-1637
(919) 733-8486
Regional Offices
585 Waughtown St.
Winston-Salem, NC 27107
(336) 771-4600
The End of NCPMA Brochure
If you would like copies of this brochure for your clients, (THEY WERE CREATED FOR YOU) send a request to The North Carolina Petroleum Marketers Association via e-mail at (Willie S. Feather) or fax a request at (919) 782-4414. If you have questions contact or recommend your client's contact the DENR Winston-Salem office at (336) 771-4600.
Please allow me to add some personal insight on this issue.
  1. The North Carolina Leaking Petroleum Underground Storage Tank Fund covers assesment and clean-up NOT REMOVAL of the tank.
  2. Existing underground oil tanks which were not installed under the current regulations are made of material, generally steel, which is not corrosion-resistant and will deteriorate with time. The question is not will it leak, but when will it leak. The longer it has been is the ground the more likely it has or will leak soon. 
  3. Your buyer should insist that the active tank be tested to determine if it is currently leaking. Your seller should do this before marketing the home and provide certification of tank integrity. 
  4. If the tank is very old and in use, even if it passes the test, there should be a test for contamination below the tank. This involves auguring a hole and taking a soil sample below the bottom level of the tank. If there is contamination, the tank should be removed and the contaminated soil removed. The Tank Fund may help with this cost, it will not pay it all.  
  5. If the tank is no longer in use, it should be removed and the soil tested for contamination and contaminated soil removed. If contaminated, the Tank Fund may help with this cost it will not pay it all.
  6. If removal is difficult for whatever reason, the soil should be tested  below the level of the tank using an auger. If contamination is found the tank should be removed irrelevant of the difficulty and the contaminated soil removed. The Tank Fund may help with this cost, it will not pay all of the cost. If there is no contamination, the tank should be emptied, cleaned, and filled with sand, slurry or foam to stabilize the tank against future collapse.
  7. Clearly and bluntly advise your client that failure to deal with this issue could be an expensive mistake. A recent removal in Winston-Salem was reported by the Winston-Salem Journal to have cost the owner over $3,000 on top of what the "Tank Fund" paid for assesment and removal of the contaminated soil.     
As a real estate professional don't make the mistake of suggesting to your client that there is not a problem and that they should not be concerned about underground oil storage tanks. The risk is real and failure to deal with it properly may cause you to stand before a judge and/or jury in the future. Cover your back, make the issue clear and let the client decide how to deal with this issue. G et a disclaimer signed if they fail to follow the recommendation set forth above.
Thought for the week
The real art of conversation is not only to say the right thing at the right time,
but also to leave unsaid the wrong thing at the most tempting moment.

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