Oil Change

HEATING OIL STORAGE: REGULATION VS. NON REGULATION

Microbial Influenced Corrosion (MIC) appears to be affecting domestic oil storage tanks more frequently than in the past. Currently, there is speculation that the new Ultra Low Sulphur Diesel (ULSD) fuel, which is a cleaner-burning fuel, is more prone to causing internal tank corrosion failures. On the one hand, we improve the air quality using USLD fuel. On the other, we may be increasing the potential of ground contamination should a tank corrode through and ULSD fuel leaks into the environment.

Some hypothesize the removal of sulphur in the fuel is somehow allowing MIC to become more prevalent in heating oil tanks. It is suggested that non-ULDS fuel, with its high sulphur content, created a less attractive environment for MIC to grow. It is important to note water has to be present in the tank bottom for MIC to live and grow.

Others argue that the higher MIC failures re- cently experienced are a result of the tank replacement process, during which MIC and other contaminants from the old tank are pumped into the new steel tank. Tiny blemishes in the new tank’s internal mill scale coating allow the corrosive material from the old tank to instantly attack this unprotected surface. The result is a premature pinhole failure on the bottom of a new steel tank without warning. Neither theory has been proven, although the trend of an increasing number of tank failures in Ontario recently provides evidence this phenomenon is worth further study. The MIC problem associated with ULSD is only the latest issue to plague the oil storage system, which continues to be a major concern for insurance companies and remains an Achilles heel for the oil heat industry.

REGULATING OIL STORAGE

For many, the solution to the problem lies with government regulations. However, when we review the provinces with regulations, the anticipated reduction in incidents associated with the legislation appears elusive. This has caused some provinces to delay enforcement of existing legislation; those considering new legislation have put proposals on the back burner. I asked one provincial official why the relevant province hadn’t considered implementing legislation to enforce tank replacement and to insure the in- stallers were licensed. The response was:

‘We do not have the technical expertise in the heating oil business to legislate changes to the storage system. The oil industry is in a much better position to regulate itself.

Legislation would require policing and administrative costs, taxing stretched resources.

Financial decisions requiring homeowners to spend money on a heating oil system has become a political issue in some regulated provinces.

Other provinces with regulation are not seeing anticipated reduction in incidents.

BACKGROUND: GOVERNMENT REGULATION

P. E. I. introduced legislation in June 2001 that requires all storage systems to be inspected, upgraded and registered. The regulations allow only licensed installers to install storage systems; there is a maximum lifetime limit for storage tanks. The regulation has been tweaked over the years to add things like a guard over the outside valve, and a deadline extension during the times when it was evident too many systems had not been inspected. However, as of 2008, all systems on PEI have been inspected and tagged. If they don’t have a tag on the fill pipe they are not allowed to receive oil.

In Newfoundland, the 2002 legislation has become as elusive as a codfish. Initial legislation requiring tank inspection to be completed by trained inspectors, each requiring Cdn$2 million worth of errors and omissions insurance, died a very quick death. It became apparent no inspector could afford the annual insurance premium, estimated to be in the tens of thousands of dollars, thus this requirement was quickly dropped in 2003. Now inspectors do not require insurance. The next portion of the April 2002 legislation to be relaxed was the March 2007 deadline for the initial inspection and upgrade. As soon as the deadline for inspections approaches, it becomes apparent not enough systems have been inspected, thereby resulting in a further extension. This has happened many times; now it appears this part of legislation will not be enforced.

TSSA in Ontario has requirements similar to PEI. It, too, has had to modify its deadline for inspections a number of times. It has even flip-flopped on a few requirements.

IS GOVERNMENT REGULATION THE ANSWER?

For years, the Insurance Bureau of Canada has called for government regulation in provinces where regulations do not exist. Obviously this would move the burden of policing the industry from the insurance companies over to the government. In making this argument more convincing, it would be better if the bureau had data that demonstrated the implementation of regulations had the beneficial effect of reducing leaks and spills (i. e. as compared to data obtained from non-regulated provinces). Unfortunately provinces without regulations do not keep detailed spill and leak statistics, making it hard to draw such a comparison.

P. E. I. LEAK AND SPILL RESULTS

Table 1 below is the published leak and spill data available from the Department of Environment in P. E. I. The results indicate the regulations, now in their eighth year, are not yielding the desired outcome, which is to reduce the number of leaks. For the purpose of this summary, I have included totals, averages, leak ratios (annual percent) and inverse ratios. (Please see Table 1.)

As indicated in the table, only a modest reduction in incidents has been achieved since the introduction of regulations in the past two years, and the incident rate has been climbing. Does that mean these regulations are a failure? I would argue that they are not. Still, this data suggests improvements needs to be made and that governments don’t have all the answers. In P. E. I., all homes have now been inspected, upgraded and tagged. However, incidents continue to happen a rate of 0.317% annually (1 in every 316 homes). Keep in mind that P. E. I. has stricter reporting rules than all other provinces; thus, the spill numbers will be higher than what insurance companies or other governments will show. All spill incidents need reporting in P. E. I., not just those requiring a major cleanup.

P. E. I.’S IMPORTANT CONTRIBUTION

P. E. I.’s use of regulation to reduce leaks and spills may have fallen short of expectations in one way. But in another, it has succeeded in creating statistical data. No other province in Canada has taken the initiative to gather data on failures so painstakingly as P. E. I. The data allows us to focus on solutions in the areas where real problems exist. Here are some very important tips: Outside Storage Tanks

The most obvious place to start is the outside storage tank. Based on the data, a single-wall, steel outside storage tank clearly represents the worst possible choice for oil storage. At an annual corrosion failure rate of 1 in 490, the outside steel tank represents the highest rate of failure for any oil storage related equipment. The new B139 code slated for 2010 addresses this issue: it would require outside tanks to be double-bottom with interstitial monitoring or nonmetallic. Ironically, the inside-located storage tank (steel or other type), which has a failure rate of 1 in every 2,400 installations, is the best performing piece of equipment of the oil storage system.

I have yet to find sufficient data to determine acceptable life for an outside steel tank. It will depend on a number of factors. Certainly an end-tap, 14-gauge tank located outside is a concern. Some insurance companies require replacement after 10 years. My data suggests this type of tank should be replaced in less time than that. Keep in mind that all outside tanks will have water form in the bottom from time to time, unless it continuously drains. It is unavoidable due the condensation process. Those suggesting this can be removed are not being realistic: it is a known fact that condensation can be a daily event when the conditions are right. Inside tanks don’t typically suffer from condensation issues because the temperature is constant.

Outside Supply Line

The next most obvious choice for upgrade is the outside supply line. End or bottom outlet supply lines located outside are the second most likely place you will get a catastrophic failure leading to an environmental incident. The homeowner should be strongly advised against putting a tank outside at all times. However, if it has to go outside, I suggest installing a top outlet single-line system with an anti-siphon valve and a dearator (air eliminating device). This way, the tank does not leak if the line gets cut or the valve breaks. A two-line burner supply system is not advisable because it will generate additional condensation in the outside tank. Two-line systems are banned in many countries in Europe.

Inside Storage Systems

When dealing with a storage system inside the home, solutions to reduce incidents of leaks are not obvious. This is when having good data becomes extremely important. As stated above, the inside storage tank is actually the best-performing piece of equipment. Incident rates from overfill and piping leaks are 1-in-757 and 1-in-754, respectively. Keep in mind that piping leaks include problems with filters, connections and the line itself. When we look at major incidents identified in Table 2 (those that

are not quickly detected) — which in P. E. I. are classified as spills and leaks over five litres — the incident rate for inside tanks drops to 1 failure in every 4,260 installations for inside tanks.

Based on this data, it doesn’t make sense to have a policy to replace an inside tank after 10 or 15 years. Just the process of replacing a tank can be disastrous. For example, incidents in Nova Scotia from installations accounted for more than 5% of the incidents from 2002-05. If homeowners decide they want the replacement tank outdoors, they have just created more risk of a major spill for themselves or their insurance company by a factor of three times, as compared with the risk associated with the old inside storage system. It is far better to keep the tank indoors for 25 years provided that the tank, filter and burner connections are equipped with a leak containment tray and alarm system. This system can be added anytime. It protects the home from corrosion, connection and overfill leaks.

LEAK DETECTION FOR INSIDE STORAGE SYSTEMS

Leak detection is simple to install. Essentially the tank, filter and burner areas are protected with specially designed, oil-resistant containment trays, which are embossed to make sure any leaked heating oil is quickly channelled to an audible alarm. It acts much like a smoke detector, in the sense that an alarm will sound when oil is present. The alarms are either battery-operated or wired into a security system. The oil line connecting the tank to the burner is typically sleeved (double-walled), ending over either containment tray. Most oil systems have this double-wall protection already (orange, plastic-coated line).The cost of installing a leak detection system is only 1/10th the cost of a tank replacement; it thus provides a higher risk reduction return on investment. With leak detection, the frequency of failure will be reduced considerably. The failure rate with leak detection is estimated to be one incident in 8,000 annually — 24 times better than the current system performance. Keep in mind that leak detection systems are not available for outside tanks. Environmental conditions prevent its use outdoors. Fire departments have endorsed the use of leak detection systems because they reduce the risk leaked heating oil will migrate under the heat source and flash.

OPTIONS FOR PROTECTION

Government regulations associated with home oil storage are having mixed results. Governments run the risk of homeowner apathy if they fail to get the regulation right. From my experience, homeowners are reluctant to spend money on an oil storage system after it has been inspected and tagged for another 15 years, despite the fact the initial regulation lacked sufficient data. Changes to regulations are not easy to implement and the political delays and fallout is always a consideration.

I would suggest the CSA B139 Code should be more responsive to the environmental issues associated with the oil heat system. This is the technical manual for installations of oil burning equipment. These incidents tend to be corrosion-, mechanical-or technical-related failures. Like the NFPA 31 code (The U. S. National Fire Prevention

Association Oil Burning Equipment Installation Code), these codes were initially designed to protect homeowners from fires. Environmental issues seem to have evolved, and now preventing environmental damage seems to be as important as preventing fires. However, there seems to be a gap in the mandate of these codes to address environmental issues. Unfortunately, changes to codes take a long time (typically every five years), thus can the insurance industry stand by patiently and wait?

It has been proven that insurance-driven financial incentives have been a motivating factor behind many home-related improvements. If insurance companies underwrite the risk, would it not make sense for insurers to suggest changes that homeowners can make to reduce risk using the incentive of an insurance discount? This would be much more dynamic and responsive to current issues and equipment improvements than the route via codes and/or regulations. Fortunately, we now have valuable data that can guide these risk reduction discount programs. Based on my analysis, the oil storage system can move to safer ground. The data suggests all current incidents can be reduced by 95% if suggestions above are considered.