Don't Get Greased by Underground Oil Tanks

by Thomas Kraeutler

What is the latest environmental hot button? Underground oil storage tanks. And some homeowners in New Jersey have found themselves in the same category as toxic waste dumps when it comes to leaky oil tanks. Some major insurance companies are avoiding new policies like a hot potato when they find out the home has an underground oil tank.

So what's a homeowner to do? Convert to gas or electric? Hardly. Important tools such as service contracts and testing help protect homeowners as follows:

Protection Policies - Oil tank service contracts are the newest saving grace for oil tanks. Promoted by the NJ Association of Fuel Merchants, they are inexpensive warranties that give homeowners up to $100,000 of coverage for clean up and repair costs should a tank fail while in service. To sign up, contact your local oil heat dealer or call the Fuel Merchants association at (973) 467-1400 for a list of firms which carry the program.

Beware, however, because these service contracts aren't a panacea. Although underwritten by a major insurance provider, they ARE NOT an insurance policy and are not regulated by state insurance oversight guidelines. Also, the policy won't pay if the tank is discovered as part of a conversion to gas heat. The tank must be "in service" to qualify for coverage and customers must stay with their fuel company for 12 months after they pay for any cleanup. Despite these facts however, the service contract is still well worth the small expense. Home sellers should get such a service contract before any buyer is involved because it makes some buyers rest easier.

Getting Tested - The only way to find out if your tank is leaking is by testing. There are several methods and they're not cheap. However, if your tank is older, you may want to make the investment for peace of mind. Here are the most common types of tests:

Soil Vapor Test - Several holes are driven into the soil surrounding the tank. A very sensitive instrument then draws soil gas out of the holes. The gas is measured for the presence of petroleum hydrocarbons. High levels can mean your tank is leaking.

Vacuum Test - This fairly new test is popular for denser soils. It is done by creating a vacuum inside the tank and watching for a pressure change, which may indicate a leak. This test will also check for water leaks, which could indicate a hole in the tank.

Tracer Gas Test - A non-toxic tracer gas is injected into the tank. After 7 - 14 days, soil vapor is drawn from the area around the tank and sent to a lab for an analysis. If tracer gas is detected in these samples, the tank is leaking.

Precision Test - The tank is filled with oil and a computerized instrument is attached to the oil fill pipe. The computer tracks changes in temperature and volume inside the tank. This test takes several hours but produces a quick, sometimes "on-site" report and is therefore popular for the real estate transactions. The major drawback is having to fill the tank, especially if it is leaking.

The type of test chosen depends on many factors and this decision is best left up to an experienced tester.

Tom Kraeutler is a hands-on home improvement broadcast journalist and the kind of guy homeowners want to call at midnight when their basement floods. He earned his home improvement stripes as a professional home inspector, amassing over 20 years experience learning how houses are put together, and how they fall apart! Tom appears regularly on CNN, MSNBC, The History Channel, HGTV and the DIY Network. He's a columnist for House Beautiful and do! Magazine and his work has been featured in Smart Money, Reader's Digest and in hundreds of daily newspapers across the nation.