You may be noticing some large,
deep holes in front yards around town and wondering what's going on.
Well, don't panic. It's not some strange burial ritual, but rather a
sign that many residents in Montclair and other New Jersey towns are
taking advantage of financial incentives offered by the state for
removing old, underground oil tanks before they start to leak because
of rust and old age.
Leaking underground heating oil tanks are a growing potential environmental problem for millions of homes in New Jersey and throughout the Northeast, because oil seeping from a tank can pollute the ground around your house and your neighbors' houses, and work its way into the water table, contaminating the drinking water supply.
New Jersey has recognized the environmental threat and it's offering financial aid to homeowners to get those tanks out of the ground, hopefully before environmental damage occurs. That's important because an ounce of prevention in this case is worth a pound of cure.
More than 6 million homes in the Northeast use heating oil, according to the U.S. Energy Department. It isn't known how many of those homes have their tanks underground, instead of, for example, in a basement. The number is undoubtedly in the millions, however, and for many homeowners, an underground tank can be a ticking time bomb.
While removal of a tank and installation of a new one in, say, a basement, can cost in the neighborhood of $2,000, that cost can jump to $15,000 and beyond if the tank is leaking. So, even if your underground tank is still doing its job, you may want to consider removing it now to save yourself a lot of heartache.
Underground tanks are becoming increasingly vulnerable to leaks because many were installed in the 1940s or 1950s when homeowners converted their coal boilers to oil, or when houses were built in the post-war construction boom. Manufacturers at the time weren't particularly concerned about the quality of the metal used for the tanks. Many installed in the late 1940s in New Jersey, for example, were assembled from WWII ship scrap metal, according to Terry Doran of Fuel Tank Maintenance Service in Carlstadt, N.J. They're starting to reach the end of their useful life.
10 Permits a Week
Bob McLoughlin, construction official and electrical sub-cod inspector for Montclair, said that the town is issuing about 10 permits per week for tank removal. While tank removal is typically higher just before the heating oil season begins in the Northeast, McLoughlin said that 10 per week is a particularly high number and that it's high because the state program.
The New Jersey Economic Development Authority (NJ EDA), handles issues regarding removal of non-leaking underground oil tanks. (I haven't looked into other states, but the best bet is probably to go on your state EPA Web site.) If you find out that your underground tank is leaking, you are still eligible for financial assistance, but you need to apply for that assistance first at the New Jersey Department of Environmental Protection (NJ DEP).
You can get as much as $1,200 for closure and removal of a non-leaking underground tank and as much as $3,000 for replacement with a new, above-ground tank. (Businesses looking for financial help can get it too, but it comes in the form of an interest free loan instead of a grant.)
Leaking tanks are a much bigger
deal. Jeanette Cleary of NJ DEP said that the average homeowner's
cost (prior to reimbursement) to remove a leaking tank is $12,000 to
$15,000, but that it can reach as high as $100,000 if the oil reaches
the water table. Homeowners with a leaking tank first have to apply
in writing to their insurance company to see whether any costs are
covered by their homeowner's policy or, if they're lucky, by a
separate tank-insurance policy. Then, they have to present a copy of
their written request to the state DEP. The state will pick up any
expenses not covered by insurance, according to Cleary.
One sure way to find out if your tank is leaking is to have the ground around the tank tested. But this isn't cheap, and it comes out of your pocket. My neighbor had her ground tested for about $700.
Eligibility
If you want state aid to remove your old tank, the first thing you have to do is find out if you're eligible. To do this you go to the most frequently asked questions part of the NJ EDA Web site. To receive state aid you have to have a taxable income not greater than $250,000 and a net worth not greater than $500,000, excluding the value of your primary residence and your pensions (401Ks and IRAs). Details of eligibility can be viewed on the frequently asked questions page.
Once you determine that you're eligible and that you want to go ahead with the excavation, you need to go to their list of certified contractors, found on the NJ EDA Web site. You must use one of these contractors if you want to get state reimbursement for the job.
Reimbursement is the operative word. Homeowners should know that they must make the initial investment in tank removal, and clean-up , if that's the case, and then apply for a grant to cover the costs.
Hidden Costs
But people should know that there are many hidden costs when it comes to oil-tank removal. Terry Doran of Fuel Tank Maintenance Service, the company that removed my neighbor's tank, said that the initial out-of-pocket expense for the homeowner was typically $1,500 to $2,000 if the tank is under dirt (excluding ground tests).
The cost can vary a lot depending on what's in the tank. For example, it typically costs around 75 cents per gallon to dispose of sludge/water in your tank. Expenses that are included in the cost of tank removal are town permits, which can be $50 to $10, digging out the old tank, disposing of the tank, and basic back-filling of the excavation spot. I saw my friend's former tank site once it was backfilled, and it clearly still needed a lot of landscaping, which can run into the thousands of dollars.
Lower Home Value
All of these tank problems can seriously affect the money you get for your house when it comes time to sell or the money you pay for a house when it comes time to buy.
One of my neighbors had to have a tank removed from her old house before she could sell it. A few years earlier they discovered that they had a corroded feeder pipe that ran from their underground oil tank to their furnace and they had it replaced. But what they didn't realize was that the underground oil tank was corroding too.
When they put their house on the market, they failed inspection because their soil was contaminated. Luckily, their tank sat on bedrock, and the oil leak never reached their water table. They also had tank insurance, but the ordeal still cost them dearly. It was around $2,000 out of their wallet to replace their Belgian block trim, patch their driveway, and plant grass seed.
Lost Bids
But, worst of all, they lost two of the three bids they had on their house. And they were handsome, above-asking-price bids. Their third bidder stuck around, but they ended up getting considerably less money for the house than they would have if the oil tank problem hadn't surfaced.
One of my other neighbors also had an oil tank nightmare to tell. About a year ago, before they moved to our block, they bid on a house a few streets away only to find out that oil was leaking from the property's underground oil tank and that the oil had not only reached several other yards, but had seeped into the water table.
Once the oil reaches the water table and can potentially affect drinking water it's a much bigger and much costlier problem. They understandably chose to withdraw their bid, and consequently ended up paying what everyone on the block considers too much for the house they now live in.
This was most unfortunate for them, but also for the rest of us because it skewed the estimated value of our homes, not a good thing, especially in a down market when you may be ready to challenge the appraised value to your house.
No Deadline
So, if you are a New Jersey homeowner with an underground oil tank, whether you're planning to sell that home or stay put for a long time, you should seriously consider having the old tank removed.
The state says the reimbursement program currently has no deadline, but it still seems prudent to tackle the problem of an underground tank now, while the money is there. Sure, it will be a headache, but that headache could turn into a nasty migraine the longer you wait.
My neighbors had to have a tank removed from the old house before they can sell. A few years ago, they discovered the supply pipe corrosion led his oil tank in the basement of your furnace and replacement there.
Posted by: בריכות ים בניית בריכת שחיה | November 28, 2011 at 12:18 PM
I recently had my oil tank removed. It had leaked. We do not qualify for the NJ grants. So far, this has cost us close to $23,000. That does not include replacing our driveway or any landscaping. It's all out of pocket. The Oil Tank company nickles and dimes the customer for everything, plus there was a lot of time wasted just waiting around for the dump truck to return, making it a 2 day job, instead of 1 day. Now, we're trying to get the groundwater test done...another $2,550! Ridiculous but once they have you, what can you do? They have to file the reports to the DEP so you have to pay.
Posted by: Shocked Couple from North Jersey | February 22, 2011 at 07:44 AM