Buying a House with an Oil Tank: 3 Ways to Protect Your Investment
Let’s get right to the point of what you need to know about underground oil tanks: how to protect yourself, your savings and your investment.
You have probably been told that you need to test the tank before buying a home to make sure there’s not an issue. So now you’re looking around to find out who does this testing and how much it costs.
When choosing a company to perform testing, the company should perform a full evaluation of the current state of the tank. This should include tank testing, soil field screening and corrosion testing. Even if a tank has no detectable leaks, the tank itself may be in a weakened state, leaving it susceptible to leaking in the very near future. Also, a tank may be sitting in a previously contaminated pit if the installation was not performed as per your state’s requirements.
If a thorough inspection isn’t performed, you could close on the property in 90 days, move in and life is fantastic. Two months later, you have an active spill occurring, it has reached the water table and gotten into your new next door neighbor’s well. Contractors are telling you that you could be spending $120,000 or more to clean it up. No kidding!
Below is an excerpt from a DEP study on cleanup costs that shows:
- Most cleanups completed in four months or less: $20,000 or less.
- Typical cleanup cost range: $20,000 to $50,000.
- Average cleanup costs involving both soil and groundwater: $90,000.
On the high end, DEP survey results showed some cleanup costs exceeded $300,000.
Oh, but that can’t happen, because you put homeowner’s insurance on the property, right? This is my first piece of advice to you:
1. Purchase your insurance policy with pollution coverage if they provide this option
Most, if not all insurance companies put a “Pollution Exclusion” in the policy. It will look something like the following, taken from an actual policy:
“We do not insure: loss or damage caused by contamination or pollution, or the release, discharge or dispersal of contaminants or pollutants.”
Unfortunately, many homeowner insurance companies will not even write a policy if there is an underground tank on the property.
Need help with tank or soil testing for your home?
So, what are you supposed to do now? Protect yourself by getting the advice on the testing you need based on your specific circumstance! Testing is not a “one size fits all” service. Your needs may be completely opposite from the guy buying the house across the street with the identical tank. Think about these things…
- What are you planning on doing with the tank once you buy the home?
- When will you do it?
- What protection will you have between now and then? And after then?
You may be saying, “Ah, it’s no big deal and the horror stories are exaggerated. I’m leaving the tank right where it is.” That is a perfectly acceptable answer but you may want to perform one particular test which will protect you and your investment.
On the other hand if you are saying, “I am yanking that thing right out of the ground two months after I move in!” you will want to look at a completely different type of test to protect yourself.
In short, talk to someone knowledgeable about your specific situation and plans. Don’t let just any company test your tank because they can provide the “best price” and advertise the “best service”, when they never even asked you what you are planning on doing. It just doesn’t make sense.
Think about your plans, realize future problems can be avoided and find out how to be protected in any case.
What is the single most important thing that will protect me from issues related to my underground oil tank?
As the Director of ATS Environmental, I am asked this question often. Well, we’re going to be talking about the options you have depending on what best suits your specific needs.
There are two options I think you should definitely know about that are directly related to protecting you: tank integrity testing and soil sample analysis.
2. Tank Integrity Testing and Soil Sample Analysis
- Tank integrity testing is a more thorough evaluation of the current condition of the tank and associated piping.
- Soil testing more thoroughly tests the soil surrounding the perimeter of the oil tank.
You CAN do it right the first time, just make sure you choose a reputable company that will guide you through the process. The best firms will probe to find out what is best for you.
My point is this:
If you want to protect your investment, you need a company that will help and advise you as to what you need.
If you are planning on moving into your new home and leaving the tank in place, then you want to perform tank integrity testing that includes corrosion testing of the tank and field screening of the soil. This will tell you the following:
- Whether the tank is “tight” and not leaking from any portion (piping included).
- How fast the tank is corroding or rusting and if the tank is in a “weakened” state.
- If there is any major soil contamination detected around the perimeter of the tank from the existing tank or even prior tanks that were in that same “tank pit” or location.
That’s exactly what our testing does. Not one or the other but all three tests. Also, our testing is approved by all of the national tank insurance companies.
If you’re worried by all the reports and contamination stories and are planning on removing the tank immediately, it would be wiser to perform soil analysis around the tank.
Soil testing consists of taking samples below the perimeter of the tank. Oil will typically plume as it leaks from a hole in a tank. This plume spreads horizontally as well as vertically.
Taking samples of the soil from the perimeter bottom depth of the tank will tell you:
- If the tank is leaking into the surrounding soil
- If there is any significant or minimal contamination
- If you can remove the tank without any major expense
My suggestion is to decide what you are really going to do with that tank once you own the property. Once you make that decision, the rest is really a no-brainer.
Need help with tank or soil testing for your home?
3. Ensure that you are protected by the testing you have chosen, no matter who is performing it for you
If you have opted for having the tank inspected by means of a tank test, it is critical that you verify the company will perform the following for you at a minimum:
a) Field screen the soil using a Photo Ionization Detector (aka a PID meter).
This will give you an idea if there is any hydrocarbon contamination in the soil around the tank.
You may be thinking that there is no need for this step because the tank test will tell you if there is leakage. What you may not know is that tank testing equipment cannot detect small leaks. In fact, tank testing equipment is only certified to detect leaks that are great than .1 gallons per hour, and that level only has to be detected 95% of the time for DEP certification.
So a tank that is leaking at .05 gph or roughly 1 gallon per day can easily pass a tank test and the company that tested it is not liable in any way shape or form. However, simply using a PID meter to screen the soil in conjunction with the tank test will drastically reduce if not eliminate this possibility from becoming a reality.
Make sure your company is checking this for you!
b) Perform corrosion testing between the tank and the soil.
All tanks deteriorate. That is a simple fact. Some tanks will deteriorate faster than others. Corrosion testing will give you a level of deterioration that will tell how good or how bad the condition of the tank metal is.
- If the levels are moderate, you may want to plan to remove the tank sooner than planned.
- If the levels are unacceptable, it may not even be safe to perform a tank test at all. Heavily corroded tanks are weak, if you apply any type of pressure or vacuum to a tank in this state, you can easily damage it, creating a leak.
As long as these two critical steps are performed prior to actual tank test, you are getting the comprehensive service that you need. If they are not, or you are not sure what the actual test consists of, please call your testing firm and verify the services.
It has been said that people do not always choose what is best for them; they choose what they are comfortable with. When it comes to protecting your investment, be certain that you know you are getting what is best for you.
At ATS Environmental, we are always looking out for the interests of our clients. Being good at what we do is not our measure of success; being chosen to do it consistently is.