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 potential 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 accumulation 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).
Fuel Oil Regulations and Codes
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. The handling and storage of fuel oil is governed under the Technical Standards and Safety Act - Ontario Regulation 213/01 ("Fuel Oil Regulation"), and administered under the Ontario Installation Code for Oil Burning Equipment I (Based on CSA B139, with Ontario Amendments), Edition/2006 ("Ontario Fuel Oil Code").
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 above ground 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".
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.
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:
Schedule for Upgrading Existing Underground Tank Systems:
Deadline to Remove or Upgrade*
Age of Tank
25 years and more, or unknown October 1, 2006
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 theTSSA. 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
Aboveground Fuel Oil Tanks
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.
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=D03032E1DD95416D9CEE00F9844949CC):
•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).