Residential Fuel Oil Spills: A Messy Business

Residential fuel oil spills are a high-risk situation for all parties involved: the homeowner, fuel oil supplier, manufacturer of the oil tank, and seller of the fuel burning equipment, to name but a few. Residential oil spills create a major disturbance in the home owner’s life and can prove extremely costly. According to the IBC, the cost of cleanup after an oil spill is between $250,000 and $500,000, but it can even exceed $1,000,000. And of course, oil spills pose a significant threat to the environment.

When there is a leak from an oil tank installation, time is of the essence. There’s a very short window of opportunity in which to document the site and the condition of the installation, and to collect all of the necessary information, so it’s critical to have a sound strategy in place. Because of the complexity of the claims, oil spills often involve many stakeholders, which increases the possibility that the scene and evidence may be compromised. In such a situation, the chances for a successful subrogation action against the responsible parties could be seriously jeopardized. From the moment you are notified of an oil spill, you have to act quickly to gather all of the appropriate experts to assist you on this claim, including a Forensic Engineer. 

What is a Residential Fuel Oil Spill?

In short, a release of heating oil into the environment. This includes any kind of spill or leak from an oil storage tank, oil delivery line or other part of an oil heating system, such as the in-line filter and shut off valve. However, we will leave oil leaks from burners and furnaces for a future article.

Common Causes of Residential Fuel Oil Spills

There are a number of causes that can lead to an oil spill, including:  

  • Bottom wall perforation due to internal corrosion 
  • Installation deficiencies (incorrect slope, improper foundation, improperly secured tank)
  • Improper, or lack of, annual maintenance
  • Manufacturing defects (bad welds, protrusions around the outlet port)
  • Freezing of water in the in-line fuel filter or fuel supply line
  • Vent whistle malfunction (indoor installations)
  • Corrosion of supporting legs or saddles; tank collapse
  • Cross-threading of the in-line fuel filter
  • Pinched gasket of the in-line fuel filter
  • External corrosion
  • Vehicular impact
  • Objects dropped, or people stepping on the in-line filter, shut off valve, or supply line
  • Corrosion and wall perforation of abandoned underground fuel oil storage tanks

Consequences of Residential Fuel Oil Spills

Similar to the causes of oil spills, the consequences are numerous and varied, with some being more common than others. The most pressing and far-reaching is environmental contamination. Once oil seeps into the soil it can contaminate groundwater and eventually spread to other water sources, including creeks and lakes. 

Another serious concern is property damage – applicable to both outdoor and indoor tanks. As fuel oil leaks out of the tank, it can contaminate materials it comes into contact with, such as wood, concrete, and drywall – all materials used in residential homes. In extreme situations, where the oil has contaminated the soil under the foundation, the entire house may need to be demolished, and the soil underneath may have to undergo remediation. 

In the case of indoor installations, the leaked oil will also soak into fabrics and textiles it comes into contact with, rendering them a complete loss. Worse still, fuel oil vapour can spread throughout the home, causing adverse health effects to the people exposed to it.  In one such instance, a homeowner was hospitalized with severe respiratory issues after spending the night capturing leaking oil from his indoor fuel oil tank.         

There are, of course, also more unusual consequences. For example, a case where oil spilled from an above-ground fuel oil storage tank and contaminated a nearby cemetery. In order to commence remediation, an archeologist was needed and a massive search had to be conducted to locate the descendants of the deceased. But regardless of the cause and consequences, for home insurers, any oil spill recovery is a complicated and lengthy procedure.

What to Do After a Residential Oil Spill

Oil spills are complex investigations involving a large number of parties (homeowners, insurance companies, adjusters, TSSA inspectors, fuel oil suppliers, remediation companies, engineers, and most likely, lawyers). Therefore, it’s important to have a plan in place so you know exactly what to do from the outset.

It is paramount to know that in Ontario, the handling and storage of fuel oil is governed under the Technical Standards and Safety Act – Ontario Regulation 213/01 (Fuel Oil Regulation) – and currently administered under the CSA B139-15 Ontario Installation Code for Oil Burning Equipment by the Canadian Standards Association. Under provincial regulations, a person becoming aware of an oil spill must immediately report that spill to Ontario’s Spills Action Centre (staffed 24/7; Toll-free: 1-800-268-6060).

If there is an immediate need to disturb the evidence beyond closing the shut off valve, installing a spill tray, placing absorbent material under the tank, or plugging the vent pipe, Ontario’s Spills Action Centre needs to be informed that this is an emergency situation and an immediate telephone call should be made to the TSSA Fuel Safety Program (1-877-682-TSSA (8772)). Under no circumstances should the scene be altered before a TSSA inspector attends the site and provides approval for removing the evidence.

Hire a Forensic Engineer

Your next step should be to bring in a Forensic Engineer who specializes in oil spills to attend the scene, ideally before the site condition has been changed by the cleanup crew. In the meantime, ask the engineer’s advice on what to document and what to preserve. From a legal point of view, it is paramount to obtain all relevant documents associated with the fuel oil installation from the homeowner. This includes, but is not limited to, correspondence with the oil tank seller, invoice for the purchase of the tank, installation certificate, inspection certificate(s), correspondence with the fuel oil supplier, and receipts for oil deliveries.

Take Lots of Photos

Until the TSSA inspector has attended and released the site/evidence, no one can tamper with or discard evidence, move or change the position of the tank. However, taking photos is not considered tampering with the evidence, and you should take as many as possible. Ask the homeowner to take photos before you attend the site, and once you arrive, make sure to capture the location of the tank and surrounding environment, as well as close-ups of the leak location, fittings, pipes, legs, underside, foundation and manufacturer label. A picture is worth a thousand words, and in cases where the tank has been removed before an engineer is assigned to the claim, those pictures can also be worth a lot of money. 

You never know what will be relevant to the investigation down the road. For instance, a nearby flowerbed could explain external corrosion of the tank; an improper foundation could explain why the tank tipped over; lack of protection from falling ice could explain why the shut off valve was cracked; and lack of protection from vehicular movement (if required) could explain why the tank was damaged when the area was snow plowed.

While it’s obviously important to identify the cause of the failure, it can be even more important to identify any code violations that were present in the oil tank installation at the time of the loss. This can lead to liability against parties who should have seen the deficiencies and taken the appropriate steps to either correct them or condemn the installation. After all, a tank taken out of service can’t leak.

Maintain Chain of Custody

It is very unlikely that the fuel oil installation (fuel oil tank) will be examined on site by all parties involved, so it’s critical that you maintain chain of custody. Once the site is released by the TSSA, and following preliminary site examination, the tank will eventually be removed and sent to an off-site location, or independent laboratory, for any future joint destructive examination. It is recommended that the chain of custody document clearly indicate the date, the manufacturer and serial number of the fuel oil tank, as well as the names of people and companies who handled the tank after the incident. This is to expel any debate around spoliation of evidence that may arise in the future.

Subrogation Strategy

Your goal is to make sure that every dollar you spend on an oil spill claim is recoverable. Although there are many parties involved in an oil spill, it is important to know that one significant driving gear in the complex subrogation machine, and one that can help you by providing an unbiased opinion, is a qualified Forensic Engineer. 

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About the author:

Dinu Matei, M.Sc., P.Eng., Consulting Forensic Engineer

Dinu is a licensed professional engineer and designated consulting engineer, specializing in metallurgical, materials and mechanical failure analysis. With more than 20 years of industry experience, Dinu has been involved in over 1,000 failure investigations of various metallic and non-metallic components, 23 projects leading to the development of new materials and processes, and is a qualified expert witness in Manitoba civil court.

Dinu can be reached by email at dmatei@origin-and-cause.com, or by phone at 416-300-2865.