Money pits: Removing an old oil tank can seem like throwing cash away

As my wife, Lynn, and I stared out our bedroom window at a 15-foot-deep hole in our torn-apart back yard, we wondered how our $8,000 sewer repair had spawned a separate $25,000 oil-tank removal.

An abandoned home heating-oil tank became a great danger — to our finances, not our safety. And we're not unique. Tens of thousands of homeowners in Seattle and throughout urban areas in the state could face the same money pit in coming years as they renovate yards or sell their homes.

Although you can't avoid the costs if you have an oil tank that's gone bad, you can manage them by taking care of the problem in pieces. You have various options that depend on whether you're planning to sell your house soon — or not for years — and whether the leak has penetrated beyond your property or into the groundwater.

Our debacle started simply enough: Part of our sewer line had given up the ghost, and a 50-foot segment needed replacement. Because we'd recently also discovered an abandoned oil tank underneath the sewer line, we decided to have it removed at the same time.

Over decades, the tank had rusted away. The oil seeped through the soil, down more than 10 feet in a slow-moving plume that had fortunately not hit groundwater.

To properly solve the problem, we had to have every bit of petroleum-laden soil dug out, disposed of and filled in. We could have waited to deal with the soil, but because of all the work happening at the same time, we bit the bullet.

Our Montlake bungalow's back yard was dismantled, 90 tons of soil was removed, and a procession of dump trucks, backhoes and concrete mixers tore up the narrow access alley.

Whichever previous homeowner had stopped using oil to warm our little home had left the underground tank full of oil when they took it out of service. And all the contractors and government employees I've spoken to said our story was very familiar.

Lurking liability

Most older homes in Seattle had oil tanks installed 50 to 60 years ago, according to Phil Suetens, owner of Filco Co., a tank-decommissioning service.

Many of these tanks were taken out of service in the 1970s when oil prices rose and natural gas became an option. Fire code at the time didn't require removal or decommissioning, although prudent homeowners had the tanks emptied and cleaned.

How to know if a tank is lurking in your yard? If you purchased your house in the last several years, look at item 7F on the disclosure form provided during the closing process (often called Form 17 for historical reasons). Current law requires an answer to whether any fuel tanks are on the property, although that answer can be "don't know."

If you're buying a house, know that you (or a bank, home inspector or real-estate agent) can ask that the seller determine if there's a tank (and leakage) as a condition of purchase. Tests can provide a definite "yes" if contamination is found, but not a definite "no" even with extensive boring. Filco's Suetens said an in-depth site assessment can cost $1,500 to $4,000.

You can at least confirm if a tank was removed by contacting the local fire department or fire marshal's office, which issues and maintains reports on individual oil-tank decommissionings. (The Seattle Fire Department can provide that information for free by calling their permit section at 206-386-1025.)

If there is even a hint that a buried tank may exist, but no proof, consider this:

You could walk away at this point, no wiser, and still able to check "don't know" on that disclosure form when you sell the house. But if there is an oil tank and it has leaked, the problem could be worse in the future as the oil spreads through the soil. You might be forced to deal with it while trying to close the sale of your house. (And in the process, you could lose long-established plants and trees, and walls might need to be removed and reassembled, as in our case.)

John Demco of Demco Law Firm, which specializes in environmental and real-estate transactions, summarized it neatly: "A prudent seller deals with the problem ahead of time so they're not dealing with it afterwards." A homeowner who removes a tank and contaminated soil is "not going to be looking over their shoulder to see if someone's looking back at them" after the house is sold, Demco said.

Nonetheless, the next step could cost anywhere from a few hundred to $100,000 with little chance of knowing in advance where the bill stops accumulating. Take a deep breath before proceeding.

Plunging into a tank

To find the tank on your property, hire a tank locator service; the local fire department or marshal may be able to provide you with a list of such services, although they can't recommend one. If there is a tank, the service should be able to determine how much oil or water is in the tank, and whether it's already been decommissioned and not properly reported.

Once you know there's a tank, you're obliged to deal with it. "The fire code requires that any underground tank that's been out of service for a year or more must be properly decommissioned," said Lynn Kilpatrick, a spokesperson for the Seattle Fire Department.

Kilpatrick said that a tank could be removed entirely, filled with an inert material "such as polyurethane, sand or a lean concrete slurry," or, the least desirable alternative, pumped and rinsed and left underground. If the tank is left empty, "you would need to disconnect all the vent lines" and cap the fill pipe, she said.

A tank can be pumped out, rinsed and cleaned for a few hundred dollars. When the tank later rusts out, which is inevitable, the ground could collapse around it.

Removing the tank is the most costly option, running nearly $1,000 for the most basic excavation, lifting, hauling and disposal. However, if a leak or contaminated soil is discovered, the costs mount quickly.

Filco's Suetens said an average removal costs between $7,000 and $15,000. He and several other experts said that they had encountered residential removals that topped $100,000.

Removing contamination

Now we're at your next decision. Despite the requirement that a discovered tank be decommissioned, no state or federal law requires contamination that's entirely on your property to be removed or cleaned up. But remember, you must disclose the presence of contamination in item 7E of Form 17 when you sell your home.

Removing contaminated soil could tear up your property and plantings, and even with testing beforehand, it's impossible to know the final weight of the material trucked away and the total labor and equipment required to carry out the job. (Bioremediation is a possibility, too: Deep holes can be drilled and oil-eating microbes dropped in, says Filco's Suetens, but it's still an expensive option that might require some soil removal later.)

The soil itself is disposed at a rate of from $25 to $35 per ton depending on quantity, according to Larry Baker, the soil remediation operations manager for Rinker Materials in Everett. If a contractor uses Rinker's trucks for hauling, Baker said the time is charged at $85 per hour for which the meter ticks during transit and waiting on site.

Individual tank decommissioning services set their own rates. Although no operator wanted to go on the record with prices, the contractor we used charges roughly $170 per ton, which included hauling, backhoe rental, labor and truck time. Two to three laborers might be required, or even more, depending on the area being excavated. The first several tons can be charged at a higher rate to cover setup, and small jobs might incur minimum fees.

We initially had to have part of a fence removed, and later a railroad-tie wall disassembled to get at all of the contaminated soil. Because we had a sewer contractor on site and the sewer line crossed the oil tank area, the sewer contractor was responsible for taking down the fence, and we arranged a lower fee from the tank decommissioner by having the sewer contractor handle excavation as well.

Unfortunately, this meant we had four to six workers, two to three from each firm, on site for a few days, which cost us several thousand dollars extra in labor.

But it also meant the work happened faster and we didn't rack up additional expensive sewer-line repairs — and incidentally didn't lose the use of our facilities during the 10 days or so the work lasted.

Testing and reporting

A licensed tank decommissioner should take samples and have them tested before declaring a job complete. Various regulations govern acceptable levels of pollutants, and a contractor must be certain that the soil or other materials removed reflects the full extent of the contamination and that the remaining soil tests below those limits.

You'll want to get copies of those tests, preferably before the hole is filled, as well as the final report that the contractor is required by code to file with the local fire district.

The licensed tank decommissioner is also responsible for tracking the extent of the pollution, and a homeowner needs to send the contractor's tests and reports with a cover letter explaining the work to the Department of Ecology in any of the following situations: the contamination extends beyond one's property or into the groundwater, fuel has pooled at the surface, vapors can be detected in buildings, or there is "extensive soil contamination."

What's "extensive?" Department of Ecology representatives said that is determined case by case, so it's better to call and ask. King, Kitsap, Snohomish and several other nearby counties are served by the Northwest Region office at 425-649-7000 or 3190 160th Ave S.E., Bellevue.

If the oil has leaked into surface waters, such as creeks or lakes, you must immediately contact the Emergency Management Division at 800-258-5990.

The aftermath

Once the soil's been removed and tested as clean as standards required — ours tested below 50 parts per million — it's time to fill the hole.

Depending on the type of soil and the depth of the hole, a contractor might choose pea gravel or concrete slurry; fresh soil alone would compact and possibly collapse. We used a slurry, which has the advantage of being dense enough to prevent subsidence, but loose enough to later be removed with a spade. On top, you place a few feet of topsoil.

Even before the hole gets filled, you'll need to make sure you're maintaining the paper trail.

The Model Toxics Control Act allows later homeowners to sue earlier ones in the chain of ownership, even decades later. Not a happy prospect, but John Demco notes that one way to avoid later problems is to document and disclose as fully as possible.

"The more you can disclose and give them backup documentation, the better off you are." If you're unsure about what to include, Mike Layton of Demco had simple advice: "If you have to ask, you know the answer: You should disclose."

Demco added that he'd never seen a suit in which too much information was the basis for someone's complaint. Demco said that if the homeowner provides details, "and the purchaser buys the house and the purchaser now has a problem with that area — guess what, you've got a defense."

Everyone advised keeping copies of all reports, lab results, bills and other details indefinitely — not just until the sale of the house.

Our aftermath

In the process of removing our retaining wall, it turned out that the railroad ties had rotted through. The rotted wood, old concrete and other detritus were hauled away, and we have a semblance of order.

I hate to think that as a result of this article, thousands of people who never thought about an oil tank suddenly realize with a sickening lurch that not only do they have one, but they may have to stare into the depths of their financial well-being to have it taken care of as we did.

Fortunately, the hole we climbed into had a bottom. We did the right thing, and given that we've seen the innards of our back yard, we believe we have no more surprises in store. Knock on wood.

Glenn Fleishman writes about technology for The Seattle Times and other publications.

Heading off high expenses for tanks still in use

If you have a tank in active use and want to avoid some of the potential future expense, the state of Washington offers free reinsurance, which covers expenses that your homeowner's insurance doesn't for removal, remediation and landscape repair.

The Pollution Liability Insurance Agency added home heating-oil tanks to its purview in 1995 as part of an effort to help ensure that cleanups of accidental oil releases happen and to mitigate the costs of homeowners.

The agency's director, Roger Dovel, said more than 58,000 homes in the state are covered by the insurance, which is paid through a 0.6-cent fee on each gallon of home heating oil sold. "To be covered, all you have to do is send in a simple form," Dovel said. The insurance covers up to $60,000 of remediation costs, as well as up to $1,500 to restore landscaping.

Dovel recommends that homeowners think about their tanks like other parts of their homes. "After 20 years, most homeowners think about replacing their roof. It's not leaking, but it shows wear," he said. "Even though it's out of sight, even though their oil tank may not be leaking, by spending roughly $1,000, you could prevent a lot of future problems."

Dovel said homeowners should consider new tanks that cost slightly more but encase steel in fiberglass, ensuring that even when the metal part of the tank degrades, no oil can leak out.

— Glenn Fleishman