Top Reasons To Remove an Underground Oil Tank

Many reasons may inform the removal of an underground oil tank from any premise. These reasons vary from peace of mind, environmental protection, property transfer, regulatory authority requirements, and bylaws.

Whichever the reason, there exist stipulated guidelines that precede the removal of underground oil tanks. They should be adhered to for safety and cost implications.

Failure to do that may result in hazardous results and hefty fines by relevant regulatory bodies. Financial institutions also consider due processes before funding underground oil tanks projects.

Reasons To Remove an Underground Oil Tank

The following are some of the top reasons for underground oil tank removal:

Property Transactions

During the selling of a home, many oil tanks are removed. The realtor will usually request removal when a home is up for sale. This is mainly because if the property has an oil tank on it, it is more likely to be impossible to sell until the oil tank is removed.

It would also be tough to locate a lender or a house insurance company willing to insure the property without removing the oil tank. Many builders avoid purchasing homes with oil tanks because of the unknown hazards of buying a property with an oil tank.

The presence of an oil tank on any site may cause concern among builders. Finally, they will be taking on the risk of removing the oil tank, and as a result, they may want significant price reductions in the listing.

Because most builders’ purpose is to generate a profit, estimating how much profit they will gain or potentially lose can be difficult if they do not know how much risk they are taking.

Complying with local government regulations

There are various reasons why a property owner would remove an Underground Storage Tank from their land, one of which is to comply with city environmental codes. Many individuals still don’t know whether an oil tank is located on their property or if they even have one, making it difficult for communities to enforce this bylaw. Depending on where the property is located, a professional may be required to remove the buried oil tank.

Any attempt to remove it on one’s results in legal problems. An oil tank removal service can help adequately remove the tank, obtain the necessary licenses, and ensure local laws and regulations.

Health and Safety

Oil tanks can be hazardous to one’s health and safety. Although it is uncommon to hear about household explosions or people becoming ill due to their oil tanks, it is possible that one could be affected in specific conditions.

If, for example, fuel oil has infiltrated the basement over time, one may be exposed to fumes regularly. Second, if the primary water supply is well water, it may leach into the water system.

When an underground oil storage tank is the source of a fire or explosion on the land, it poses a safety issue. These incidents appear to be uncommon, yet they can happen under the right circumstances. Additionally, as the oil tank erodes over time, it may collapse.

This, however, is exceedingly doubtful.

Home Insurance Applications

If there is an underground oil tank on the property, getting home insurance approval can be challenging, like getting a mortgage.

Many insurance companies require their customers to remove their oil tanks before submitting their renewal application, even during their home insurance policy renewal process.

Oil tank insurance is available from some insurance firms. However, these policies can be rather costly.

Preparing for a renovation

Before conducting any renovations or demolition, it’s good to determine if the property has an oil tank. If an oil tank is located on the property, it should be removed before any renovations begin.

This could save money and lessen the risk of the oil tank being damaged during construction. Failure to remove the tank promptly might have huge and costly financial implications for the property developer, especially in unforeseen plans.

For example, the property owner might have repurposed the land for residence and built an apartment. Later on, if the developer considers adding a facility such as a swimming pool, it may be challenging considering there maybe have to be costly replanning of the whole property and applying for newer and more expensive licenses.

Mortgage Applications

Most financial institutions now request their mortgage applicants’ oil tank removal or detection certificates. As a result, finding a financial institution that will approve or renew a mortgage application without the oil tank removed can be challenging.

Being Proactive

Some homeowners prefer to remove their oil tank ahead of time for peace of mind.

By doing so, you will avoid dealing with additional stress in the future when selling your home—running into issues when renewing your mortgage or insurance policies—paying annual fees to the city, having your renovation options limited, and thinking about what lies beneath the ground and if your oil tank is leaking.

This is often an underrated factor yet affects many property owners who may not live on a property they purchased and developed based on these underlying fears.

Reducing, preventing, or mitigating potential leakage from the oil tank.

Many corporations used to estimate the life expectancy of their oil tanks to be around 20-25 years when they were sold years ago.

It is preferable to remove the storage tank as soon as possible with that in mind. The risk of oil spillage can have devastating effects on the environment, especially if water bodies are around.

Boreholes and wells are likely to be highly affected in the eventuality oil leaks and spill onto the water table, thus contaminating an otherwise water used for many other purposes.

High Maintenance Cost

Oil tank maintenance can be both costly and time-consuming. If the tank is underground, technicians will have to rip out grass and concrete, which will increase the expense to the corporation.

For instance, having and maintaining of underground oil tank requires necessary licenses from the municipality.

Some unnecessary maintenance-related costs can be prohibitive, especially if the facility is not viable or profitable anymore. Removing the underground oil tank may make more sense to save high running costs.

More cost-Effective methods

Businesses that replace their oil tanks with gas furnaces will have more energy-efficient systems in the long run. Gas furnaces have an efficiency rating of 89 percent to 98 percent, whereas oil tanks have 80 percent to 90 percent.

Although the difference may appear insignificant, every percentage counts regarding the company’s companies and associated overhead expenditures. These differences could have substantial financial ramifications if not factored in.

For instance, if a switch to gas furnaces is done and runs for a decade, the profit margins resulting from the new and more effective storage methods would be huge. Therefore, it makes perfect sense to remove the underground oil tank in such a case.


Before removing an underground oil tank, one must consider many factors. The list of factors provided is hardly exhaustive.

There exist more qualitative reasons why there may be a reason to remove an underground oil storage tank. If the tank, for instance, does not serve any other purpose, there is no reason why it still should exist in the first place.

However, there are instances where the tank may be located in areas that make no difference whether it is extracted or not. Therefore, it might be more cost-effective, leaving it untouched as other areas purposed for development are focused on.

It should also be noted that different areas have differing legislation governing the removal of underground oil storage. That, too, should be considered. Laws and bylaws keep getting updated too.

Keeping oneself abreast with newer legislations and statutory legislation may go a long way in guiding one’s decisions while contemplating the removal of underground water storage.

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