What you Need to Know About Underground Fuel Oil Tank Leaks?

There are a high number of older houses in the Northeast that have buried fuel oil tanks. "Until the 1960’s people were generally un-aware of the risks to the environment and a lot of oil tanks went into the ground," said Stuart Lieberman, a former NJ deputy attorney general who now practices real estate and environmental law.


Today, the risk of soil contamination from an underground tank is well known. What is also well known is the high cost of cleanup associated with oil tank leaks.


Since cleanups can be in the tens of thousands of dollars and may not be covered by your homeowners insurance, it is important to educate yourself on underground fuel oil tank leaks!  


1. What is an oil tank leak?


A leak refers to the escape of petroleum from an oil tank. This usually starts out as a very small pinhole in the tank which causes the contents to leak into the surrounding soil. 


A leak can also occur in faulty or corroded fuel lines. When this occurs, a soil sample will be tested. If contamination is not extensive, the lines can be replaced.


All fuel oil tanks (above and underground) can experience a leak. Above ground tanks can be easily examined for flaws by visual inspection and can be repaired before oil escapes; in comparison to buried oil tanks which cannot be visually inspected without digging it up. This leaves the possibilty of a leak to occur without your knowledge.


2. Why do buried oil tanks leak?


Oil tanks are made with bare steel. This steel goes through a natural corrosion process when exposed to minerals found in soil. This process is slow but inevitable.  


If your tank is over 10-15 years old, there is a high chance it’s undergoing the corrosion process, consider replacing your tank.


3. How do I know if my tank has leaks?


With underground oil tanks, there is no easy way to detect leaks without digging it up. But there are some signs you can look for when it comes to oil tank leaks.


Some signs are – increased home heating costs (which is not the optimal way to determine a leak since other factors affect increased home heating costs), oil sheen on groundwater, stained spots or oil smells on your property, oil smells in your house, dead vegetation near or above the tank.


If your tank is 10 – 15 years old there is a high chance that it has developed small pinholes which are the cause of leaks.


If you are experiencing these signs, it’s more than likely there is a leak.


4. How do I test for a oil leak?


Contact your fuel oil company to help determine if your oil tank has leaks. A tank test can be done to test how tight the storage structure is. They will also test the fuel lines since faulty or corroded lines can cause oil to seep into the ground.


According to tank-removal companies, leaks occur in 30 – 50 percent of the cases.  


5. There is a leak in my tank, now what?


If a leak is detected, be prepared to have the tank removed from the ground. Your fuel oil company or a certified contractor will remove your tank and inspect for signs of the oil leak into the surrounding soil.  


Assuming no contamination is found, this is generally a straightforward affordable job, running homeowners between $1,500 – $2,500.


*At this point, it would be in your best interest to replace your tank with an above ground tank and NOT rebury another tank in the ground. Another option is converting your heating systems to run on clean, affordable propane*   


Soil samples will be taken from around the tank. The samples can determine how far the oil may have spread in the ground. If soil contamination is spotted, regardless of the size, the state Department of Environmental Conservation will be informed and a report will be made of the fuel spill. 


The DEC recommends that anyone with knowledge, report the discovery of any contamination or a release to the NYS Spill Hotline (1-800-457-7362) within 2 hours of discovery.


For additional information, review the NY DEC Spill Reporting & Initial Notification Requirements.


6. What if contamination is found?



Be sure to take cleanup actions right away. The problem could be minor and relatively simple to correct or it could be a major contamination. Addressing the problem now will prevent higher cost and damage later.


The state advises homeowners to find a cleanup contractor on the Department of Environmental Protection’s list of certified companies, which can be found on the department website.




New York State DEC Spill 
Response & Remediation FAQ




According to the Environmental Protection Agency, the cost of cleanup depends on a variety of factors, including the extent of contamination and state cleanup standards. If only a small amount of soils needs to be removed or treated, it could be $10,000.   However, the average cleanup is estimated to cost $130,000


Once the cleanup is done, the contractor sends a report to the DEP. If the DEP is satisfied, it issues a "no further action" letter stating the property has met cleanup requirements.


7. Who is responsible for the cost of the cleanup?


If there is contamination, the homeowner will be instructed to contact their insurance company. The homeowners insurance policy may cover the cost to remediate the tank. An adjuster will be sent to your location to examine the property and review the contractor’s findings. 


The insurance company will determine if the policy covers this event. A "pollution exclusion" in your policy may cover the remediation.  


The homeowner is usually responsible for the cleanup cost. Homeowner insurance policies generally don’t cover the damage done by leaking tanks, although tank insurance is available with restrictions.  




Be Proactive and Remove that Buried Fuel Oil Tank BEFORE There’s a Problem!




If you have an underground fuel oil tank, know what your homeowners insurance policy states when it comes to oil tank leaks and contamination.  


These environmental time bombs can quickly partner with a financial nightmare!  No person wants to be responsible for contamination to our soil or water, on top of being held liable to pay a possible $130,000 for the cleanup.


With today’s knowledge of soil and water contamination caused by oil tank leaks, it’s in the homeowners best interest to take that tank out of the ground and replace it with an above ground tank or convert to clean, affordable propane gas! Contact CES @ 800-874-1975 or complete the form below.


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