How Much Does it Cost to Decommission an Oil Tank?

Updated 08/2024.
If you’re planning to sell your Portland home, you may need to address potential home hazards before putting it on the market, and one is your heated oil tank. If you have an older home, chances are, it has or had one, whether it’s in use or not.
Delaying or ignoring the potential hazard issue may be tempting, but it is best not to. In Oregon, sellers must disclose the presence of an oil tank—current or past—to potential buyers, even if it’s been decommissioned. With the growing concern about oil tanks contaminating soil, even decommissioned tanks, buyers often have them tested during inspection periods. You may then be required to undergo a certified decommissioning.
Even if the legal obligation wasn’t in place or you aren’t selling your home, decommissioning is worth consideration for safety reasons. So, what are the requirements for testing, addressing issues, and decommissioning a heating oil tank? How much does decommissioning cost? This article covers all you need to know.
Quick History of Oil Heating Oil Tanks
Heating oil tanks store oil for home heating systems. The oil is burned to create heat that is then distributed through the home’s system.
In the 1930s, homes began replacing coal and wood heating systems with oil. The tanks can be inside or outside the home and buried or exposed, though according to the DEQ, most homes in the area built before 1970 had underground storage tanks. Since then, the number of homes in Portland with oil heating systems has been declining in favor of electric and natural gas, though some aboveground systems are still in the market.
What are Heating Oil Tanks Made Of?
Tanks built before 1970 were typically made of uncoated steel, which made them more susceptible to corrosion and leaking. Today, heating oil tanks are made of fiberglass or a blend of plastic interior and coated steel exterior.
The Dangers of Heating Oil Tanks
Oil tanks can leak over time, even when emptied, leading to environmental hazards. Emptied tanks can cause soil and groundwater contamination, and non-decommissioned tanks can be a fire risk, especially relevant in recent years due to the high number of fires in Oregon and the Pacific Northwest. Though heating oil isn’t explosive in liquid form, it is when heated to 140 degrees and vaporized. When the vapor is exposed to sparks and oxygen, the combustibility increases. The vapor can be caused by a failed pressure relief valve, which creates a high-pressure leak that can flow to a fire source and lead to an explosion.
Legal Requirements for Existing Home Owners
To sell a home with a heated oil tank, you may need a certification letter from the Department of Environmental Quality (DEQ) and/or a new site assessment. This can apply even to those who have had their oil tanks previously decommissioned but have yet to be certified through Oregon DEQ. If the previously decommissioned oil tank fails a modern soil sample test, a second decommission can be required. The DEQ recommends soil re-testing for any properties with oil tanks decommissioned before 2009.
Testing and decommissioning are voluntary during home ownership but often involuntary after a buyer’s home inspection. Discovered leaking oil tanks will set the Oregon DEQ into motion, and the homeowner will become responsible for certified decommissioning. Since buyers often do soil tests during inspection periods to spot issues caused by heated oil tanks, soil contamination may also be discovered. It typically rests on the sellers to remedy the problem before the sale is finalized. Every soil contamination is reported to the Oregon DEQ by law.
What Does it Mean to Decommission an Oil Tank?
Decommissioning involves emptying the heating oil tank, cleaning it out, and either removing it or filling it with inert material (like slurry). Cleanup is also part of the decommissioning process if soil contamination is discovered after testing.
A decommission can be completed by the homeowner (we don’t recommend it) or a contractor and must be certified by a licensed service provider, after which a test for contamination must be done on the soil.
When complete, documentation is submitted to the DEQ for a $104 fee (as of 2024), which will issue the confirmation letter.
Why is it Important to Decommission a Portland Heating Oil Tank?
By law, Oregon home sellers must disclose a current or past oil tank to potential buyers, even if it’s been decommissioned. Owners may also be required to address the issues.
Buyers have also become more vigilant about oil tanks, likely due to the Environmental Protection Agency‘s (EPA) reclassification of carcinogenic chemicals in heating oil, like naphthalene and ethylbenzene. It’s best for homeowners to be prepared.
Since the DEQ recommends soil re-testing for any properties with oil tanks decommissioned before 2009, buyers may want to see a recertification before finalizing a home purchase, even though Oregon doesn’t require it by law.
What Does It Cost to Decommission a Heating Oil Tank in Portland?
Pricing involves the removal of the tank and any soil contamination. The overall cost depends on various factors, such as removing contaminated soil which I cover in a moment, but the good news is that in most cases, a professional can perform a risk assessment in compliance with Oregon law without removing soil. A risk assessment and oil tank decommission is typically around $5,000. This number is based on my long-standing experience (licensed since 2003, over 2,000 home sales). Also, your home insurance may help, which I will cover in a bit. Regardless, it’s important to know how it can increase, sometimes much higher.
Let’s take a look at the tank and soil contamination costs individually.
Oil Tank Decommissioning Costs
In terms of the tank itself (removing connecting pipes and filling the tank with an inert material), an aboveground oil tank usually runs anywhere from $1,000 to $2,000, with an underground tank running between $4,000 to $15,000. But as I mentioned earlier, if you’re just looking to decommission the oil tank and there is no contaminated soil to remove, the cost can be well under $4,000.
One important factor here is size. Some underground oil tanks can be quite large, requiring more materials. On average, for a 550-gallon or smaller tank, you could be looking at anywhere between $1,000 and $2,000, and the price goes up from there. Keep in mind that these fees are for a non-leaking tank. If your tank is leaking, you’ll need to contend with cleanup fees, which we’ll cover in a moment.
Size | Fees for a Non-Leaking Tank |
550 gallons or smaller | $1,000 to $2,000 |
1,000 to 1,499 gallons | $1,600 to $2,500 |
1,500 to 1,999 gallons | $2,200 to $2,700 |
2,000 to 2,999 gallons | $2,400 to $2,900 |
3,000 gallons and up | $3,000+ |
These prices, of course, don’t take into consideration other factors, like the presence of a soil leak or the fees paid to the HOT (Heating Oil Tank) Program fees. These fees include:
- Clean Decommissioning: $104/project
- Cleanup Report (Soil matrix) (Simple): $260
- Cleanup Report (Generic Remedy) (Intermediate): $364
- Cleanup Report (Risk-based) (Complex): $468
Other factors affecting your tank price include:
- The type of the tank: (indoor, outdoor, buried, or above ground)
- Difficulty of extracting the tank
- If the tank has leftover oil. The oil must be disposed of appropriately.
Oil Cleanup Costs
If cleanup is required for decommissioning, the cost will vary depending on how severe the contamination is. Sites with higher degrees of contamination may require soil removal and disposal. If groundwater has been contaminated, more testing and risk assessment need to be done.
Properties with high levels of contamination can range from $5,000 to $15,000, with some reaching over $20,000 for the most complicated cleanups.
Can Insurance Help?
Some home insurance policies will cover cleanup costs, but most will not. Be sure to check your homeowner’s insurance policy or call your insurance agent before paying. If you have an active oil furnace with an underground tank, it may be possible to purchase extra oil tank insurance in case it leaks in the future.
How Decommissioning an Oil Tank Works
Now that you have a better idea of the cost of decommissioning an oil tank let’s take a look at what actually goes on during the process. There are different procedures for aboveground tanks and below-ground tanks.
Procedures for an Aboveground Tank
This process is fairly simple. Since these tanks are less prone to leaks and spills, most of the decommissioning process involves safely disconnecting the tank from existing pipes and removing the tank from the property to dispose of it through the proper channels. In the case of a leaking pipe, soil removal and testing may be necessary to ensure no contamination is left behind.
Procedures for a Below-Ground Tank
There are two options for decommissioning a below-ground oil tank: (1) total removal of the oil tank and (2) filling the disconnected oil tank with an inert substance. In both cases, soil contamination remediation is usually necessary, as a leaking or old oil tank can contaminate the nearby soil.
Most oil tank decommissioning services do this remediation at the same time as the tank removal since they are already digging up the tank itself. However, if you’re leaving the tank buried (such as when removal would be too costly or the tank may be prone to damage if moved), you’ll need to have soil remediation done separately, along with the soil testing that entails.
If you’re leaving behind the oil tank, you will need to complete the proper forms for a decommissioned oil tank with the Portland government and fill the tank with an inert substance, such as sand. Leaving an oil tank underground, even an empty one, can pose contamination risks from fumes and toxic substances. This is why anyone decommissioning a below-ground oil tank is required to fill the tank itself for the safety of the surrounding soil and your home.
Can I Decommission an Oil Tank Myself – DIY?
While the Portland government does allow it, we don’t recommend it. Instead, we recommend working with a licensed oil tank decommissioning expert for the best results. There are strict guidelines put in place for the safety of everyone involved, and if there is a significant chemical spill or other hazardous materials, you will likely need to work with an expert for cleanup regardless of if you carried out the decommissioning on your own.
Where to Get Information about Decommissioned Tanks in Portland
If you own a property with a decommissioned oil tank, double-checking its history and gathering as much information as possible will help you prepare for potential buyers’ questions.
Learn Whether a Property Has an Oil Tank
For homes in the city of Portland only, you can find oil tank records on portlandmaps.com by following the steps below. Remember that finding no oil tank permit does not necessarily mean one doesn’t exist. Also, the images are old and blurry, making them difficult to read.
- Type the property address in the upper right-hand corner of the search bar.
- On the right-hand side of the screen, scroll down and click “Permits & Zoning,” followed by “Permits.”
- Scroll down to the section called “Underground Storage Tanks.” (Note: If you don’t see this section, the property is in an area where permits are unavailable or there are no permits.)
- Click on the blue hyperlinked numbers in the “ID” column, and you’ll get an image of the permit you can download. The permit will show you where the oil tank is on the property.
Learn Whether an Oil Tank Has Been Decommissioned and Recorded
For this information, you will need to visit the DEQ website.
- Enter the property address and click “Lookup.”
- Click on the blue hyperlinked number in the “Log Number” column. From here, you will learn (1) if the tank has had any known leaks, (2) who was in charge of the cleanup, and (3) if it has been decommissioned. (You will see a “Closure Letter” at the bottom. If you don’t see one, the tank probably wasn’t decommissioned.)
Do an Oil Tank Scan
You can also hire a professional to come to your property and do an oil tank scan to see if you have one on your property. If they find one, they will typically recommend testing the soil around it.
Have Questions About Decommissioned Oil Tanks on Your Property?
If you’re wondering about your potential liability, or if you simply want to know more about your home’s current market value, get in touch with our top 1% seller’s agents at 503-714-1111 or chat with the bot on our site. We’ve been successfully helping people sell homes in the Portland metro area for more than 20 years and would be happy to assist you in any way we can.