Understanding Aboveground & Underground (Buried) Fuel Oil Tanks

Property owners have a legal responsibility to maintain fuel oil storage tanks and to

clean up any leaks or spills that may occur, whether the fuel oil tanks are situated

underground, in a basement or aboveground. Fuel oil leaks and spills can cause

significant environmental damage and the costs to clean up contaminated soil and

groundwater on the property and its surroundings can be extensive.

This legal responsibility and potential for legal liability has resulted in increased

insurance claims made by property owners with underground fuel oil tanks. This

has caused an increase in homeowners' insurance concerns, including the potential

for denial of coverage.

The most commonly used tanks for fuel oil are steel containers that hold about

1,000 litres of fuel. The problem with many metal fuel oil tanks is that they rust

from the inside out as a result of condensation accumulating inside the tank over

several years. It is difficult to tell if a tank is leaking and underground fuel oil

tanks present a particular concern because of the inability to determine their

condition (they are difficult to inspect) combined with the probability that they will

leak (the older the tank; the stronger the likelihood that it will leak).

Ontario has strict regulations and codes governing the handling and storage of fuel

oil that require registration of all existing underground fuel oil tanks and dictate

their removal or upgrading according to a phased in four year schedule based on

the age of the tank.

All underground fuel tank systems that have not been used for two or more years

(and no longer intended to be used), must be removed, no matter what the age.

Furthermore, all underground tanks over 5,000 litres are required to be leak tested

annually (at least monthly, when level 2 or level 1 leak detection is used). All

existing aboveground and underground fuel oil tank systems are required to

undergo annual maintenance (maintenance should also be in accordance with

manufacturer's instructions) and to have a comprehensive inspection at least once

every ten years.

Safety Act - Ontario Regulation 213/01 ("Fuel Oil Regulation"), and administered

The Fuel Oil Regulation defines two types of fuel oil storage tanks and a tank

system:

Aboveground tank - "means a tank that is installed at or above grade level within a

building or within a secondary containment, but does not include a tank that is in

direct contact with backfill material". Free standing fuel oil tanks in basements

that are not in direct contact with backfill material are considered, by the TSSA, as

aboveground tanks.

Underground tank - "means a buried tank or partially buried tank that is in direct

contact with earth or backfill". The TSSA does not consider fuel oil tanks that are

in basements to be underground tanks unless they are in direct contact with backfill

material.

Tank system - "means an aboveground or underground tank, and includes all

piping, valves, fittings, pumps and other equipment associated with the tank".

Registration of Underground Fuel Oil Tanks

Under the Fuel Oil Regulation fuel oil distributors cannot supply fuel oil to an

underground tank unless the tank is registered with the TSSA. This requirement

has been in effect since May 1, 2002. There is no charge for registering an

underground fuel oil tank and the application form (Application for an Ontario

Registration to Operate/Install and Underground Fuel Oil Tank, Form No. 09143)

is available by calling the TSSA 416-734-3300 or toll free at 1-877-682-8772 or

online through the TSSA at http://www.tssa.org/regulated/fuels/fuelsForms.asp.

Once the application form is processed, the applicant will receive a registration

number from the TSSA. The registration number can then be provided to the fuel

oil distributor, to ensure an uninterrupted supply of fuel oil.

Deadlines for Removal or Upgrade of Underground Fuel Oil Tank Systems

The requirements for removal or upgrade of underground fuel oil tank systems are

set under the Ontario Fuel Oil Code.

Removal - All existing single-wall steel underground tank systems that are 25

years old and more as of October 1, 2001, or of unknown age, and not cathodically

protected, are required to be withdrawn from service and removed.

All underground fuel tank systems that have not been used for two or more years

(and no longer intended to be used), must be removed, no matter what the age.

However, where removal of the tank is not feasible an application for Variance

may be made to the TSSA (see Application for Variance for Underground Fuel Oil

Tank on page 5).

Removal or upgrade - There are specific dates set by the Ontario Fuel Oil Code

when underground fuel oil tank systems are required to be removed or upgraded

based on the age of the tank, and outlined below:

   20-24   years                                            --                                             October 1, 2007

   10-19   years                                            --                                             October 1, 2008

     0-9     years                                             --                                             October 1, 2009

* Upgrade includes adding approved leak detection, corrosion protection, spill containment, and overfill protection

device.

Requirements for Removal of Underground Fuel Oil Tank Systems

Property owners are responsible for the costs of removing their underground fuel

oil tank. The removal must be performed by a TSSA registered fuel oil contractor

holding a Petroleum Equipment Mechanic 2 (PM-2) license. The TSSA must be

notified once the underground tank has been removed and the property owner must

have an environmental assessment report completed by a Professional Engineer, a

Professional Geoscientist, a Professional Agrologist, or a Chartered Chemist.

If a leak of fuel oil is confirmed, the Spills Action Centre of the Ministry of the

Environment must be notified of the leak and the property owner is responsible for

the cost of the required clean up of contamination.

• A list of TSSA registered fuel oil contractors located in various

municipalities can be found at:

http://www.tssa.org/regulated/fuels/heating/heatingcontractors/default.asp

• To find a PM-2 Contractor in a specific municipality, contact the Ontario

Petroleum Contractors' Association (OPCA) at www.opcaonline.org or

Phone: (705) 735-9437 or Toll Free: 1-866-360-6722

• To report a spill contact Spills Action Centre of the Ministry of the

Environment at Phone: 416-325-3000 or Toll Free: 1-800-268-6060

Requirements for Upgrading Underground Fuel Oil Tank Systems

Some underground fuel oil tank systems may require an entirely new system in

order to conform to the Ontario Fuel Oil Code; others may only need specific

upgrades to the corrosion protection, overfill protection, spill containments, added

leak detection, etc.

Underground fuel oil tank systems that are not removed must be upgraded with

approved overfill protection, corrosion protection, spill containment and leak

detection. Prior to upgrading, an underground steel tank must be subjected to a

precision leak test.

Application for Variance for Underground Fuel Oil Tank

The TSSA will consider an application for "Variance for abandonment of an

underground fuel tank in place" where removal of an underground tank is not

feasible due to certain circumstances, such as a structural consideration. An

example of a structural consideration is where an underground tank is situated such

that its removal would cause collapse of a retaining wall of a house. However, the

TSSA does not consider an underground tank situated beneath a driveway, back

yard, front lawn, or garage, etc. to be a structural consideration.

The Variance application process normally takes several weeks because it involves

extensive review and research by the TSSA in order to determine whether the tank

must be removed or it can remain in place, with conditions. The process begins

with completion of the Variance Application (Application for a Variance/

Deviation, Form No. 09533) and submission of the application fee and an

environmental assessment report to the Environmental Services office of the

TSSA. Further information, including the Variance Application form,

"Environmental Info Sheet" and fee information can be found at

http://www.tssa.org/regulated/fuels/environment/fuelsEnviron04.asp .

There are no age limit considerations specified in the code or regulation

requirements to dictate the replacement of aboveground tanks, provided the tank is

not leaking.

An existing aboveground tank is considered, by the TSSA, as "approved" provided

the tank was installed in accordance with the Ontario Fuel Oil Code that was

applicable at the time of installation.

If an aboveground tank is not being used, the tank and all associated piping of fluid

content must be emptied and vapour-free; but it does not have to be removed

unless the tank is of a capacity greater than 2,500 litres and unused for more than 3

years. If an aboveground fuel oil tank is removed, the TSSA must be notified; an

assessment report must be completed setting out the extent of any fuel that has

escaped to the surrounding environment; and any contamination must be cleaned

up.

Maintenance - All existing aboveground and underground fuel oil storage tank

systems are required to undergo annual maintenance (unless otherwise specified by

manufacturer's instructions), performed by a TSSA certified oil burner technician

(OBT); otherwise fuel oil distributors cannot supply fuel oil. Such services include

visually inspecting the tank system for leaks and testing and servicing the oil

burning equipment to ensure it is operating properly. It is the property owner's

responsibility to arrange for an inspection.

Leak test - When level 2 or level 1 leak detection is used, a leak test shall be

conducted at least monthly.

Comprehensive inspection - All existing fuel oil storage tanks (aboveground and

underground) and associated appliances (furnace, boiler, water heater, etc.) are

required to undergo a comprehensive inspection by a TSSA certified oil burner

technician at least once every 10 years, otherwise fuel oil distributors cannot

supply fuel oil.

Furthermore, a fuel oil distributor is required to prepare a report of each inspection

made and retain the report until the next inspection and report are completed.

Due to the large number of inspections that were required to be completed by fuel

oil distributors, the TSSA approved the following deadlines for comprehensive

inspections (from page 2 of the TSSA Update (Fuels Safety Edition) Spring 2006

http://www.tssa.org/CorpLibrary/ArticleFile.asp?Instance=136&ID=D03032E1DD

95416D9CEE00F9844949CC):

• May 1, 2004 - all fuel oil distributors required all new customers to undergo

an immediate comprehensive inspection

• May 1, 2006 - certain groups of fuel oil distributors required existing

customers to undergo a comprehensive inspection

• May 1, 2007 - all systems that previously underwent a basic inspection are

required to undergo a follow up comprehensive inspection by May 1, 2007.

If "unacceptable conditions" are found and there is an "immediate hazard", the fuel

oil distributor is required to immediately cease supplying fuel oil and to take such

steps as are reasonable in the circumstances to shut off the supply of oil to the tank

facility, system or appliance.

If "unacceptable conditions" are found and they do not pose an "immediate

hazard", the fuel oil distributor may supply fuel oil provided that the owner of the

property takes corrective actions, up to 90 days of receiving notice, to conform to

the Code (Section 24 of the Fuel Oil Regulation). However, due to the high

number of "unacceptable conditions" being found and the resulting backlog in

correcting such conditions, the TSSA extended the 90 day time period to 365 days

provided that a variance has been granted to extend the deadline - (TSSA

Advisory, ref. no. FS-05505, dated November 8, 2005 -

http://www.tssa.org/viewNews.asp?ID=61).